When Milada arrived at Loveridge & Associates on Friday morning, a thin nine-by-twelve envelope was waiting for her. The envelope label said “Lightning Express Couriers,” a local messenger service. The return address said “Wylde Medical Informatics.” She placed it unopened in her attaché case and continued down the hallway to the conference room to watch the final act of the little Off Broadway melodrama she and Garrick had orchestrated.
WMI had been losing steam all week on the New York Stock Exchange. Today was the day Garrick intended to deliver the coup d’état. The show would close with a bang.
And yet she found herself somehow sad—or perhaps regretful—about what they were about to do. Garrick, her Henry Higgins, had taken this flower girl of a security and turned it into a grand duchess. But the gulf between the company’s valuation and its fundamentals had become unbridgeable. The girl was loveable because everybody loved her. Now the midnight hour approached, and it was time for the horse-drawn carriage to turn back into a pumpkin.
The girl’s jealous suitors, when the object of their affection had lost favor in the others’ eyes, would regret they ever knew her. And thus would they miss the deeper qualities the modest lass possessed. So it was not schadenfreude that prompted a small smile of reassurance on Milada’s part.
Garrick’s strategy was a simple one: he would come to a sudden realization, throw up his hands in disgust, and stalk off the trading floor—or rather, do their digital equivalents. But he’d been practicing for several centuries and had gotten adept at throwing financial temper tantrums when it suited the goals of DEI.
The NYSE was bullish that morning, but Garrick treated WMI like the scariest of bears. The more experienced market makers soon took notice. They were bearing down on a sizeable iceberg, and three-quarters of it was buried beneath dark, cold water. They took a hard look at its PE and started to sell.
Every time the stock hit a support level, Garrick rotated his orders to sell at market, a move interpreted in the pits as a move of pure desperation. The Damoclean sword fell. Day traders used to treading in shallow waters at once found themselves in the deep end of the ocean. The price and volume curves took off in a V-formation.
At two-thirty New York time, the stampede seemed to ease. The charts leveled off. In the boardroom at Loveridge & Associates, Milada brought up the real-time price/volume graphs on her laptop. She smiled to herself. The stock had hit an air pocket. Sell volume had outstripped buy volume. There were no bids, the worst possible thing that could happen to a stock. The market makers, day traders, elves and technicians, the portfolio managers, anybody with a position in the company—including a great many people who had no idea what the company did but had bought heavily in the run-up—perched in front of their NASDAQ Level II screens and held their collective breath.
They could only hold their breath so long. They all gasped together. WMI dropped like a rock. A thrown rock, to be sure, gliding down in a gentle curve, sinking slowly at first and then accelerating under the growing grip of gravity. Now the margin calls started kicking in, and the real carnage began.
Wylde bounced to the top of the most-active charts, a foreboding achievement for a small-cap stock. When the markets closed at four-thirty Eastern Daylight Time, it had bottomed out at 11 and recovered to 12.125.
Milada waited for the West Coast satellite feed of the Nightly Business Report to call Garrick. WMI led both the NASDAQ Actives and Big Movers charts. As the graphics flashed on the screen, the anchor provided commentary with the manner of a sports announcer running through the box scores: “Wylde Medical Informatics lost two-thirds of its value this week, dropping from forty to a tick over twelve. The sell-off is widely attributed to comments made late last week by CEO Darren Wylde, rejecting a possible takeover bid by DEI, one of Wall Street’s consistently underrated high-tech investment firms.”
Garrick was at dinner when he answered the phone. She could hear in the background the chime of silverware on fine china, the reverent, dignified commotion of waiters and busboys at work. La Grenouille on Fifty-Second, she guessed.
“Hi, Milly,” said Garrick. He said to his dining companion, “It’s Milly.”
“Hi, Milly,” said Jane.
Garrick said, “You enjoy our little performance today?”
“I’ve been watching the Wall Street wrap-up. You could have been a tad more subtle, Garrick.”
“I tried, I tried. But that’s what makes this economy such a wonderful thing. You get to go bankrupt with such speed and expedition. No helpless flopping about. I’d hate to be that Wylde chap right now. His board is going to have him for breakfast, lunch, and dinner.”
“Especially when you consider that the board consists mostly of his kids.”
“You can be mean, Milly.”
“What is our position in the company?”
“I bought in heavily at the end, moved us to just over half of outstanding.”
“What about capital gains?”
“Did my best to break even.”
“Good. I don’t want you getting arrested on me.”
“Hey, not a worry, Milly. The Feds love me. I never make money except when I’m supposed to. Where do we go from here?”
“Twelve is a generous market valuation. The stock should lose a few more points on momentum next week. But that’s where we’ll start the negotiations.”
“Let me speak to Jane.”
Garrick passed the phone across the table. Jane said, “Hello, Milly.”
“Jane, when’s the last time we asked for a meeting with Mr. Wylde?”
“Last Wednesday, if memory serves.”
“So he knows where to find us.”
“He certainly does. Anything else?”
“What’s Zoë been up to?”
“Hasn’t gotten herself into trouble. Recently.”
“Good. How about Frank?”
“Still jazzed about this green energy thing he’s got going with Alan Ridgeway. Ethanol and fuel cells are where it’s at these days.”
“Is he serious about that? A little learning is indeed a dangerous thing.” Milada sighed. “And Alan Ridgeway? What’s in it for him? God, I thought it was all talk, another one of Frank’s phases. At any rate, make sure Muriel signs off on the books before anybody at the SEC starts asking for them.”
“Sure, as soon as she can find the books. Oh, Garrick wants to say something.”
She handed back the phone. Garrick said, “It’s been a good day, Milly. Go get yourself something to eat.”
Milada laughed. “I had a very interesting repast this past weekend.”
“You must tell me all about it.”
“I’ll think it over.”
“You do know how to keep a man intrigued.”
“You’ll have to settle for Jane in the meantime.”
“I’m intriguing her right and left.”
She heard Jane laugh. A pang of loneliness struck hard at Milada’s heart. In that moment she wished more than anything she were back in New York, sharing the table with Jane and Garrick, her two best friends in the world.
“Take care, Garrick.”
Milada hung up the phone, took off the headset, and hit the intercom button. “Karen, call Executive Ground Transport and have Steven sent over. Hold my calls. I’m done for the day.”