Garrick’s mergers and acquisitions team arrived Monday morning to ramp up for the Wylde Medical Informatics takeover. Milada was confident that a deal was in the offing. The accountants from KPMG had already rented the suite next door. Milada directed the troops from her command post in the conference room at Loveridge & Associates. She was the coach taking her college squad into the final four.
They were at that point in the game when things were getting interesting. They’d been running up and down the court for forty minutes, the score was all tied up, and if something important was going to happen, it was going to happen now. Seconds left, a three-point shot arcing high over the basket.
The constant press of the players was for Milada a necessary evil. She preferred to work alone, to reach out through the proxy of her aides, Jane in New York and Karen Talbot here at Loveridge. Even Garrick, as relaxed on the floor of the New York Stock Exchange as she was in her empty West Seventy-Second Street brownstone, preferred to retreat at the end of the day to his subterranean cell, to his solitary self.
Den dwellers like the lycanthropes mystified her. The behavior ran in the genes, she supposed—that primeval affection for the group, that inherent desire to belong that made homo lupus ultimately more human than homo lamia, despite the more monstrous and undisguisable nature of their metamorphosis. Wolves lived in packs, far from the madding crowd. She lived alone, but alone among many. It amounted to more than the simple utilitarianism of keeping her food close at hand; that incalculable need to maintain the illusion of her humanness kept her at once insulated from the teeming city, yet cheek by jowl with the peopled world.
Karen sidled up to her. “Mr. Burke is on the phone.”
Milada plucked the receiver off its cradle. “Good morning, Garrick.”
“Milly, turn on CNBC.”
The television was set into a bookcase behind a pair of cabinet doors. Karen found the remote. She clicked through the channels, finally landing on CNBC.
Milada said, “Quiet, please!”
The room immediately shushed. On the screen, CNBC news anchor Bill Griffeth was saying, “The run up in WMI stock over the most recent quarter has been widely attributed to substantial positions taken in your company by DEI.”
The camera switched to his guest, a white-haired man with sunburned cheeks and heavy jowls. He leaned slightly forward in his chair. His tweed sports jacket scrunched up at the back of his neck. A polished agate bolo tie fastened a plain white shirt at the collar. “Darren Wylde, Chairman & CEO, Wylde Medical Informatics,” read the graphic scrolling along the bottom of the screen. The photograph in the annual report was kinder to him. But then, this was the face of a man who didn’t care what he looked like.
Darren Wylde said, “We’re aware of that.”
“Then you’re also aware that over the past decade DEI has pursued a strategy of buying into small high-tech companies, replacing the boards, and taking them private.”
A twitch of annoyance flicked across the man’s face, that of a bull bothered by a horse fly. He swiveled his chair around so that he was looking into the camera. His eyes were as sharply defined as his worn features were not. “We’re not interested in market valuations. Let the speculators and day traders worry about that. Our corporate goals haven’t changed. I have every intention of keeping this company true to the principles it was founded upon.”
“Are you saying you have no interest in negotiating a takeover bid from DEI?”
“I’m saying we’re not going to be swayed by outside influences. As far as I’m concerned, there’s only one way of running this company. And as long as I’m in charge, it’s my way.”
Garrick whistled softly at the other end of the line. “I admire that attitude. Home, home on the range, and get along little dogies. Maybe you and the old man should just have it out with six-shooters at a dozen paces.”
On the television screen, Bill Griffeth was thanking Mr. Wylde and announcing his next guest. Milada said, “So who do you think he was addressing there at the end?”
“You don’t think he was talking to you?”
“No. I think that little performance was about mustering the troops. I suspect discontent in the ranks.”
“At these price levels, I’d be dying to cash out too. How do you want to play this?”
“Give me half an hour. I’ll call you back. In the meantime, check the most recent 144 filings. See what insider trading has been going on.” She said to Karen, “Get me the stockholder list. Oh, and clear the room, please.”
Karen shooed everybody out of the room with the temperament of a schoolmarm calling recess. She returned with the folder Milada had requested, looking concerned. She didn’t quite understand the game, but no doubt she sensed that the other team had scored an important point. She waited until Milada had paced back from the curtained window before asking, “Is this bad?”
“The interview with Wylde? Maybe, maybe not. It depends. Have you ever seen King Lear?”
“You mean, like Shakespeare?”
“The best analysis of how not to run a family business ever written. It starts with Lear, president and CEO of his clan. The old man wants to retire. He comes up with this great idea of dividing the company equally among his three daughters. The youngest, Cordelia, immediately sees where this is headed and objects. So he disowns her. But once Goneril and Regan get their hands on the goods, Dad is sent packing as well. From that point on, it’s a bloody game of king-of-the-hill.”
“Is that what’s happening here?”
“Combined, his kids and relations are the majority holders, and he has not picked a successor. It must keep him awake at night. Having an overvalued stock makes it that much tougher. All those dollar signs dancing in their eyes. But stock is not money. The only thing you can buy with it is more pieces of paper. There is no cash in the bank. Still, we act as if it is money. And when it goes away, oh, does it hurt.”
A secretary came into the conference room and handed Milada a fax. It was from Garrick, a copy of an SEC 144 report listing the insider trader declarations. Milada scanned down the list and nodded. “The friends and relatives are cashing in. Now we shall make them eager to sell out, regardless of what Mr. Wylde wants or doesn’t want. That’s what his little performance on the telly was about: dressing down the kith and kin. But we shall see how much sharper than a serpent’s tooth are a child’s greed and ingratitude.” She dialed Garrick and hit the speaker button.
“What say ye, Milly?”
“I say dump the stock. Hold as much of our current positions as you can, but kill the support levels, kick the legs out from under.”
“Oh, boy,” chortled Garrick, and Milada could imagine that mischievous grin dimpling his cheeks.
“The rumor is that we’re reconsidering our stake in the company. The interview prompted a reevaluation.”
“The cover story isn’t a problem. How far, how fast?”
“Let’s finish it off with a flourish, but keep the cat from bouncing too high.”
After Garrick hung up, Karen asked, “Cat bouncing?”
“Even a dead cat will bounce when it hits the sidewalk. Bargain hunters buy up an oversold stock hoping to stake out a position based on momentum alone.”
“That doesn’t sound very nice.”
“It’s not nice at all. But that’s the way this game is played.”
“Mr. Burke seemed very happy about it.”
“Ever since Garrick got stung in the South Sea Company fiasco, he’s made it something of a divine mission to punish speculators. When the day traders bid up a stock he’s trying to corner, he takes it personally.”
Karen was satisfied with the answer. She didn’t know enough to know that when the stock bottomed and the margin calls kicked in, otherwise decent and well-meaning people with their car payments due and second mortgages on the line and tuition checks in the mail wouldn’t be able to cover those calls and were going lose a lot of money they could not afford to lose.
As Garrick liked to say, Serves them right. When a market-maker was working a stock with a stratospheric price-to-earnings ratio, the amateurs should stand aside. The rain falls on the just and unjust and especially on the reckless and the greedy and the stupid. It wasn’t Garrick’s or her problem. Obsessing about the short-term suffering only guaranteed long-term pain.
“Karen,” Milada said.
Karen stopped at the door. Milada busied herself at her laptop. She didn’t look up. “If that accountant friend of yours is holding Wylde stock, he might want to consider some sell options.”
Karen looked blankly at her for a moment. “Okay,” she said.
Milada swore to herself, but not harshly. Knowing Karen, though, it would come to no harm. Karen was not Jane. Jane knew everything. Jane knew that the South Sea Company failed in 1721, the apocalyptic financial scandal of the time. That was why Jane was so important to her. Jane was a person she could tell things to.
In the end, that was what Milada needed human beings for. Once every generation, she must find a confessor and bury her secrets in the vault of a mortal soul.