by Jack Fuller
There were a few stagey complaints about the night being young, but chairs began to scrape and silver to rattle on china. Rosten stood, his arm still up against Harms’s.
“Eight thirty sharp in the war room, right, Tommy?” Joyce said. “Everybody straight to bed. His own bed.”
“Tight lines,” said Chase.
“Isn’t it loops?” said Sebold.
The team pushed back from the table but did not rise until Joyce did.
“When they’re gone, we can sneak a nightcap,” Harms said, locking Rosten behind the table as the others filed out.
“You know me,” he said, “the dull, worker-bee type.”
“It seems to be doing the job for you.”
“Maybe we’d better let them clean the table.”
“De facto chief operating officer,” she said. “It’s only a matter of time before he makes it official.”
“Will I have a say?”
“You have a quiet authority,” she said. “I didn’t get your game at first. Not seeming to want it is why you’ll get it.”
“Sometimes not wanting something is not wanting it,” he said.
“She lives in Manhattan, doesn’t she?” Harms said. “The one who didn’t want you.”
He took a sip of water. The waiter saw this and offered more wine, which Rosten declined.
“You can do better,” Harms said.
With that, she began to move. He followed her to the coat check, where she handled the tip. On the street she stepped forward and scored a taxi within a minute. She could have done it without even putting out her hand.
The team was on deck early the next morning. Harms had Gunderman calling in every fifteen minutes from the auditorium to report on the other firms’ presentations. He made a special call when he spotted Nyström in the crowd.
“Listen up,” Harms said over the clatter in the salon. When it was silent, she spoke into the BlackBerry so everybody could hear her.
“Where is he? No, I mean where in the room exactly?” she said. After a few seconds she held the BlackBerry off to the side and announced, “He’s in the anteroom near the elevators.” She put the BlackBerry back to her ear. “Can we slip into the Green Room without passing him? Great. If he moves, let me know.”
She put the device down on the table in front of her.
“Time to call an audible, Brian,” she said. “Do you want to notice Niko or not?”
Joyce showed no effects of the night before. His eyes were clear, his suit and tie crisp but not fussy, his bearing just what an investor would want it to be.
“Let’s just play the bubble line past the hole,” said Joyce.
For Rosten this might as well have been one of Ezra Pound’s obscurities about the condottieri.
“Let’s get moving,” said Harms.
“We’ll wait five minutes,” said Joyce.
“That’s cutting it close,” said Rosten.
“A little suspense is good,” said Harms, lowering herself back into her place, a flush growing above the V of her neckline. Rosten’s eyes were drawn to it. He had to look away.
Finally Joyce stood, signaling that it was time. As it turned out, they did not encounter Nyström along the way. The first time Rosten saw him was from the dais after opening the Bible and buttoning his suit coat to keep from showing too much shirt. Nyström was not looking their way. He was talking with someone Rosten had never seen before.
The dais was small. Rosten always worried about falling off the back of the platform. The consensus was that the hosts arranged it that way to keep presenters on edge. They used to say that UBS stood for “You Be Shaky.” In addition to Joyce, Rosten, and Sebold, Dirk Lowenstein of UBS squeezed in. He always wore the same thin tie to these events, the only time anyone ever saw him in a tie of any kind. His jacket looked as though he had bought it in high school. He was one of the highest-paid analysts in the sector.
In contrast with the dais, the auditorium seating gave people room to sprawl. Wide-bottomed, plush chairs surrendered to the varied angles and weights of the custodians of wealth who inhabited them. They rose, row after row, which assured perfect sight lines for all, regardless of total assets under management.
Day and Domes always drew a crowd. The biggest player in its primary market, D&D may have meant Dull and Duller to the high-flying hedge funds, but everyone knew that if it ever started to use its muscle, the earth would move.
Joyce kicked the presentation off with a tour d’horizon. The audience leaned forward to see what he saw, not next quarter or next year but five or six years out, by which time Joyce said the data sector would be barely recognizable.
“There will be enormous wealth creation,” he said. “There will be disruption and consolidation. And Day and Domes will be at the center of the action.”
Rosten’s recitation of the numbers felt like a footnote. This is up a little from our previous guidance, that a little down. He moved through his slides quickly, flicking a page of the Bible from time to time but never looking at it.
The first question was always Lowenstein’s.
“You sound like you have something in your sights, Brian,” he said.
Rosten looked out into the crowd and found Nyström standing in the back.
“It won’t be long before things start shaking loose, Dirk,” Joyce said. “In the Navy we would have called it a target-rich environment.” Rosten closed his eyes. When he opened them, Nyström had not reacted. “When it happens, it will happen fast, but anyone who tells you today that he knows what will move and what won’t is just laying down a smokescreen.”
While Joyce was speaking, Nyström nodded to the man next to him, and they turned toward the exit. Some people in the audience watched them go, but that could have just been because of Nyström’s attire—black T-shirt under a tailored gray suit, bright red handkerchief puffed up in his breast pocket. He wore his clothes the way he wore his umlaut.
The next several questions came to Rosten, who consulted the Bible for effect but handled them from memory.
“You need to be a tightrope walker who stumbles once every performance,” Harms had told him once. “Wobbling tricks them into thinking you’re for real.”
When he was done, Harms caught his eye from her place in the middle of the audience. She raised her thumb at the V of her neckline and winked. Rosten brought his eyes up well over her head.
All around her the young geniuses were dressed as if they were slumming in the skyboxes at a Knicks game. They were not the real money, of course, nor even the money’s keepers. They were money’s scouts. They made what any normal person would think of as a bundle, but every one of them yearned to graduate to the Asset Class. In that socioeconomic category they would suffer no more tedious investor conferences, no more predictable, catered Chateaubriand lunches and tchotchkes from Tiffany, no more worries about whether the bonus would make it a six- or seven-figure Christmas.
The women in the crowd probably weren’t wired any differently, but you would not guess that from looking at them. They all seemed to be wearing a substantial part of their income: Perfect suits. Cashmere. Silk. Dresses tight and short but never over the invisible line. Gold and gems cladding fingers and necks with sympathetic magic. Harms more than held her own.
The questions continued, focusing more and more tightly on the next quarter, which took Rosten back to a safer place. What was the guidance on revenue? Database growth? Full-time equivalents? The interest-rate assumption for pension expense calculations? When someone asked about the trend of costs in database security, Rosten was ready to dull it to death, but Joyce jumped in.
“They are not diverging from costs generally,” he said, “but I assure you that Day and Domes does whatever it takes to guarantee the integrity of its data.”
Sebold might have wanted a little less of a drumroll, but the questioner did not ask whether anything had happened, and Joyce did not say that nothing had.
Lowenstein finally called time.<
br />
“Stimulating, as always, gentlemen,” he said, as he did to every group.
Four chairs moved back as one. Four men slid out sideways, like parishioners leaving the pews. A knot of people crowded up to the dais, some old familiars, some new faces.
“What’s the margin of error around your Q3 revenue projections?”
Plus or minus your age.
“It’s in the same range as the uncertainty around GDP growth projections,” Rosten said.
“Which is? Ballpark, I mean.”
The young man’s badge said he was from Credit Suisse First Boston. “If I were you, I would use the number my bank uses,” Rosten said.
“Can I call that an endorsement?”
Suddenly Harms was at Rosten’s side, taking his arm. He started to pull back, but then he saw that she had Joyce’s, too. Once she got them to the hallway reserved for presenters, she said, “Well done, men.” Rosten felt a little squeeze of his biceps before she released him.
“What’s the stock doing?” Joyce said.
She stopped to ping her BlackBerry, and Joyce kept striding ahead.
“Down a quarter,” she said when she caught up.
“Not exactly a rave,” said Rosten.
“Don’t mind Tommy,” Joyce said. “He is religiously opposed to exuberance. What’s your take, Sandy?”
“We flashed the possibility of an acquisition, and the market held,” she said. “All systems are go.”
“You saw that Niko left during your answer to the first question,” said Rosten. “He was talking away during the whole formal presentation.”
“He already knew the numbers,” said Joyce.
“Was I at least in good voice?” said Rosten.
“Your loop was so tight it would strangle a mayfly, Tommy,” said Joyce.
“Didn’t you see my thumbs-up?” said Harms.
“I did,” said Rosten. “Yes, I certainly did.”
2
A negotiation is about knowing more about the other party than the other party knows about you. With a publicly held company you can go to its Security and Exchange Commission filings, plug the information into the standard models, and make a good approximation of how your offer will look to your target. But beyond the numbers lies that vast fog that investment bankers call “the social issues.” What does the CEO yearn for? What does he fear? These things Excel does not compute. No matter how exquisite the modeling, it could not simulate Niko Nyström. To do this required human intelligence, HUMINT, Fisherman’s game.
What they had on Nyström was sketchy, but Rosten turned it into a story: The man had been only two years past his Wharton MBA when he had launched Gnomon as the market for dot-com stocks inflated. The press releases at the time called him twenty-five, but he had been on the Booz Allen roster for six years before Wharton. Nyström would have had a reason beyond vanity to lie about his age. When he launched, the media called him an old story. His business model was not pure digital. In Silicon Valley they were asking, “Does Niko even get it?” For a man with a dream, this kind of buzz must have been a dentist’s drill.
But when the pretty, electric-blue, dot.com balloon burst, Niko’s numbers stayed airborne. What saved him was the fact that his business served both the new economy and the old. Suddenly this made him a visionary. He had seen that you needed to build your castle with both bits and bricks. “The Perfect Hedge,” Business Week called Gnomon. “Back to the Future” read the headline in The Economist.
Vindicated, Nyström did not have any obvious motivation to sell his company. On paper his net worth was advancing toward a billion. He was still young, whatever his real age, and he was already on the Davos list. He had Gunderman’s mind and Harms’s presence, and he carried himself like a lead singer—complete with a corps of groupies. As for intellectual challenge, the analytical tools Gnomon was pioneering offered plenty to engage his inner geek.
Rosten booked time with Joyce to talk him through all this, but Joyce had no patience for it. “If I wanted touchy-feely, I’d have called Alexa,” he said. All he wanted from Rosten was one plus one. Day and Domes’s data plus Gnomon’s tools. That equaled at least three, didn’t it? One and a half for Niko, one and a half for Joyce. If the total was five, two and three-quarters for Joyce and two and a quarter for Niko, which should be enough, even for a rock star, right?
Joyce had put together a subset of senior management to confer about the deal. The Admin News Network promptly dubbed this the Secret Committee. The group had already privately blessed the five. Rosten’s team had pushed the numbers harder and eked out six, a fact that Joyce shared only with Sabby Chandrahari. He let two weeks pass after All Things Data before making a call to Nyström, who said it was time for another sit-down.
“How did he sound?” asked Sebold.
“Relaxed,” said Joyce.
“He’s up three points to less than a point for us,” said Rosten. “I’d be relaxed, too.” Because of the larger spread in the prices, now one plus one probably had to equal six and a half.
Joyce flew off to Palo Alto. When he returned, he reported to the Secret Committee that things had proceeded further and faster than he had anticipated.
“Let’s talk social issues,” Nyström had said straightaway.
“It might be a little early,” Joyce had said. “A lot of social issues can be resolved with dollars.”
“First we have to get past Go.”
“What are you thinking?” said Joyce. “Socially, I mean.”
You usually wanted to be the one to set initial conditions to put psychological anchoring to work for you. And yet Joyce had let Nyström make the first move.
“D&D is so much larger than Gnomon that I assume you will want to head up the combined company, at least for a time,” said Nyström.
“He anchored way out beyond the harbor,” Joyce told the Secret Committee.
“How many years?” said Rosten.
“It wasn’t the moment to get down to details,” said Joyce. “We spent the rest of the meeting filling in circles. Us. Them. We. Frankly, you all went into the Venn diagram, not that I have any intention of paying a premium price for Gnomon then putting its people in charge.”
“How about body language?” said Sebold.
“He was a gymnast,” said Joyce. “When he landed, he did not move.”
“Next steps?” Rosten said.
“Schedule a conference call with the board,” said Joyce.
The numbers endured another round of torture. New scenarios were developed, outside-the-box synergies imagined. Rosten began to have dreams. In one of them Sagrada Familia in Barcelona came alive, its stone botany choking off one of the spires like a strangler fig. In another the spreadsheets turned into Monet paintings of a haystack: different angles of vision, different characters of light, increasing opacity of the cataracts.
By the time of the board call, Rosten was back in the daylight world, and his team had tidied up the numbers and buffed all the assumptions. The haystack looked like spun gold.
“Nyström did not let me take the conversation to price,” Joyce told the directors, who were represented at the table in Joyce’s conference room by a gunmetal disk that spoke like some space alien. The Secret Committee members had assumed their accustomed seats, with the two satellite microphones pulled close to Joyce and Rosten.
“I am sure that you have considered the probability that Nyström led with social issues to discover your intentions,” said Sabby Chandrahari. “When he told you what he thought you wanted to hear, it may have confirmed his fears. Perhaps he did not go to price because the last thing he wanted was an offer. My question is: How hostile are you prepared to be?”
“Before getting adverse to Nyström, I need to know the board’s thoughts,” Joyce said.
This provoked a cavernous clearing of throats over the speaker—a great hibernating animal starting to stir—followed by the rumble of elbows moving closer to speakers from coast to coast.
> “Maybe we should talk about price ourselves,” said one of the directors.
“Have you established your limit?” said another.
“It is to some degree situational,” said Joyce.
“You mean it depends on how much steel rod Gnomon has up its ass,” said Lou Leavitt.
Joyce’s eyes flicked toward Rosten, who shrugged. You walked into the cul-de-sac, boss. Only you can walk out again.
“What I mean, of course,” said Joyce, “is that our number will become clearer as we close in on how much will be stock and how much cash, among other deal points. We also need to get a look under their kimono.”
“They won’t open the kimono to a rapist,” said Leavitt.
Unseen by the directors, Alexa Snow closed her eyes.
“We will have a deck out to you as soon as possible putting together all the intelligence we have gathered thus far,” said Joyce. “Don’t forget where our CFO used to work. He has ways.”
Rosten looked deep into the grain of the tabletop.
“I would be asking myself a different question,” said Sabby.
“You usually do,” said Leavitt.
“A hostile takeover attempt would put us under an X-ray,” Sabby said. “In fact it would be more like an MRI in three-millimeter slices. Are we prepared for that?”
“We should have a forensic audit done,” said Teddy Diamond. “Purely defensive, of course. I take it as a given that we have no reason to doubt our internal controls.”
“I hope the Audit Committee chairman’s confidence is duly noted in the minutes,” said Leavitt.
It was too bad Gunderman wasn’t here to witness Diamond going into a crouch, just as Rosten had said he would.
“I might think about it a little more broadly,” said Sabby. “Opposition research on ourselves. A tough, outside view. At least as tough as what we could expect Gnomon to undertake.”
“You mean A Team/B Team?” said Diamond.
“This has been a very useful discussion,” said Joyce. “Thank you.” It was lucky that facial expression did not register as sound. “To make sure we are all on the same page, let me sum up. I am hearing recommendations about preparing for a contentious acquisition, but I am not hearing opposition in principle.” He did not pause to give anyone a chance to make him hear something different. “When we send you the deck, we will also give you a plan for testing our armor.”