It's Not Luck - Eliyahu M. Goldratt [11]
“Don’t fool yourself,” he beams. “They pay attention to any number that is preceded by a dollar sign. They know exactly what they are doing. They will take the bite this year, they will improve the cash position of the company, and then next year—when they bring in some known hotshot as the new CEO—the shares will jump.”
I have to think about it, but one thing I can’t figure out. “Why are you so happy about it?” I ask aloud.
“Because now I can relax.” Seeing the puzzled look on my face, he continues. “Alex, I knew all along I wasn’t going to be the next CEO, but I was terrified that Hilton would be. If there is someone I really don’t want to work for, it’s Hilton. Any outsider is better. Now, because of his last maneuver, he’s lost Granby’s support and he definitely didn’t win Trumann’s or Doughty’s. He is doomed.”
The minute I return to my office, I ask Don to get me information about the purchases of our companies. We both analyze it. The situation is much worse than Bill said.
According to what we estimate, Pete’s company can be sold for a maximum of $20 million. It was purchased for $51.4 million. Stacey Kaufman’s company, Pressure-Steam, can currently be sold for no more than $30 million. We paid almost $80 million.
The worst of all is Bob Donovan’s company, I Cosmetics. Bearing in mind that even today it is slightly in the red, and taking an optimistic view of their assets, I don’t believe that we can sell it for more than $30 million. We paid $124 million. Yes, $124 million.
Now I understand why Granby wants the sales while he is still in control. He personally initiated and authorized the purchases. Almost $255 million. Not to mention the other $30 million or so thrown in since. For all this investment, since the purchases, we have accumulated total additional losses of $86 million. And now, for all this money, the maximum we are going to get back is only about $80 million. Talk about bad decisions!
“You see, Don,” I say to him, “that’s what happens when you read the market trend wrongly. Now I understand why everybody, including J. Bartholomew Granby III, is running for shelter. There is enough mud here to drown an elephant.”
“What will happen to us?”
“Don’t worry, Don. If push comes to shove, I’ll have no trouble finding you a good position. No problem at all. But let’s put our worries aside. We have something else to take care of right now.”
“And I thought that the big gambling was in Las Vegas or on Wall Street,” he says in astonishment.
“Yes, but let’s put it aside.” I tell him about my upcoming trip to Europe.
“Should I schedule a briefing meeting with the presidents of all the companies?” he asks.
“Good idea, but stagger the meetings. I want to spend half a day with each. Now, let’s figure out what paperwork I need for the trip.”
It takes us almost two hours to compose the long list of papers Don will have to prepare for me. On this trip I will not be traveling light—in any aspect.
5
“In two weeks,” I say as casually as I can, “I’m going to Europe.”
“Aaawsome!” Sharon jumps in her chair. “You have to bring me ‘Hard Rock Cafe’ shirts.”
“For how long?” Julie asks. She doesn’t look too happy.
“About one week,” I reply. “I have to meet some prospective buyers for the companies.”
“I see,” says Julie, looking even more unhappy.
“Daddy, what about my T-shirts?”
“Sharon, decide, coffee-shirts or tea-shirts?” I ask. Only to get a long lecture on these particular shirts. When I was a kid we treasured baseball cards. Now it’s funny T-shirts. I guess each generation of kids finds fascination in something useless to collect. The only difference is in the price. The shirts are outrageously expensive. I promise Sharon I’ll do my best—subject of course, to my schedule restrictions.
“And what about you?” I ask Dave. “What do you want?”
“I don’t need you to bring me anything,” he smiles. “I want something you already have.