Trading Reality (35 page)

I clicked on it:

It was unsigned.

I looked for the sender’s address. All e-mail over the Internet has an address. It was [email protected].

Uh?

I rang Rachel.

‘Are you OK? I heard you were attacked on Sunday?’

For a moment I was pleased to hear the concern in her voice. But I didn’t let it show. ‘Oh, it’s nothing,’ I said coolly. ‘Just a tap on the head. But can you come up and take a look at something? I’ve just received a weird message.’

She came right up. After a quick glance to make sure I was still in one piece, she avoided looking at me. I showed her the message.

‘Nasty,’ she said.

‘Who’s it from?’

She looked at the Internet address. ‘Someone in Finland.’

‘Finland?’

‘Yes. It’s almost certainly an anonymous server.’

‘What’s that?’

‘It’s a way of sending messages anonymously over the Internet. They’re supposed to be for people who want to contact support groups for things like AIDS or alcoholism, or for dissidents in oppressive regimes. But you can use them for virtually anything.’

‘But why would anyone in Finland want to kill me?’ I was confused.

‘The sender could come from anywhere in the world. It’s just the server that’s based in Finland.’

‘And presumably whoever runs it won’t tell us who sent this message.’

‘No. That’s the whole point.’

‘What about the police?’

‘I imagine even they would find it difficult. The people who run these services feel they’re defending a basic right.’

‘Well, I’m sure Kerr will try.’ Then I asked the question they, and I, were most interested in. ‘Who do you think it was? Doogie?’

‘I don’t know,’ said Rachel. She was still sullen.

‘The last one he sent was signed.’

‘Ah ha. But after what happened to you last night, he’d be foolish to send you another one with his name on it. He would certainly be capable of using this service. But then so would anyone who knew a bit about the Internet.’ She looked at her watch. ‘I’ve got to go now. There’s a lot on at the moment.’

As she closed the door behind her, I rested my sore head in my hands and thought.

Once again someone was pushing me around. Trying to get me to abandon Richard and his dream. And once again I wasn’t prepared to give up.

But this time was different. This time I had nearly been killed. This was getting much more serious.

Was it worth it?

It was very important to me that Richard’s life had not been in vain. So important that I would risk my own to ensure that his dream would be realised.

And maybe I was suffering from that innate overconfidence of the trader. The belief that in the end I could always outwit the market. Whoever this guy was, I believed I would get him before he got me.

David Baker came in to see me that afternoon to discuss a new contract. We walked over to the machine to get a couple of cups of coffee.

‘Are you still determined to hang on?’ he asked.

‘Yep,’ I said. ‘More determined than ever.’

‘Have you found any more cash?’

‘No. We’re going to have to do this from internal resources.’

‘We haven’t got any.’

‘Minor point, David,’ I smiled.

He looked grim. ‘We don’t have long now, Mark. Less than three weeks.’

‘Well, I’ll worry about that.’ I wondered why he hadn’t mentioned the attack. He must have known about it. Wouldn’t it be the natural thing to do? Maybe. But our relationship was hardly natural. ‘Now, what have you got for me?’

David pulled out some papers. ‘I think we’re finally getting somewhere with ARPA. It looks like they’re willing to sign up with us.’

‘Great!’ And it was good news. ARPA was the US Department of Defense’s Advanced Research Projects Agency. It was the chief source of largesse for small virtual reality companies, and hence an important customer. But it was difficult for us as a UK company to get contracts from them. David had done very well to get to this stage.

‘When will we get paid?’ For companies in the sort of cash-flow situation that we found ourselves in, the first question was always when? The second was how much?

‘Not till January one,’ said David. ‘If we’re still here, of course.’

I ignored the comment. I knew that the moment any of us ceased to act as though we were around for the long-term, it would all be over.

‘That’ll be a good start to next year,’ I said. ‘Now, let’s see what you’ve got here.’

The issues at stake were complex, and David and I worked on the deal for two hours. I was impressed by his grasp of the problems, and also pleased that he had decided to consult me. There was still no love lost between us, but if we could at least talk to each other on business issues, that was good for FairSystems.

We had just finalised the deal we would offer ARPA, when the phone rang. It was Scott Wagner. He was to the point.

‘I have some good news for you,’ he said. For a moment, I thought he might have decided to sponsor an equity issue after all, but it wasn’t that. ‘There’s been heavy trading in FairSystems stock early this morning. The price is up two to five dollars on good volume. This could be a good opportunity to sell.’

My relief to see the price moving up was tempered by suspicion. ‘We’ll see,’ I said. ‘Who’s behind this? Frank Hartman?’

‘I honestly don’t know,’ said Wagner.

I didn’t believe him. ‘OK, tell me if you see any more buying.’

‘And what about my client, the guy who wants to buy the whole company?’

‘We’ll see.’ I hung up.

David Baker looked at me enquiringly. I told him what was happening to the share price.

‘Wagner’s right,’ he said. ‘This is the time to sell.’

The phone rang again.

‘Hi, Mark, Carl Jenson. How are you doing?’ His voice boomed down the wires from Palo Alto.

‘Fine, Carl.’ I tensed, waiting for what he had to say.

‘Good. I’m calling out of courtesy to tell you something you should know. Today we’re filing a thirteen D with the SEC to inform them that we’ve built up a stake of over five per cent in FairSystems.’

My heart pounded. Was Jenson finally showing his hand?

‘Are you going to make a bid for the whole company?’

‘It’s a neat little company. I’d just like to own some shares, that’s all.’

I seized my opportunity. ‘So will you reconsider your decision to cancel the advance payments on Project Platform?’

‘Hey, Mark. I just called out of courtesy, you know? I don’t want to start renegotiating something we’ve already agreed. Bye.’ And with that he was gone.

I put the phone down, took a deep breath, and sat up straight in my chair.

That was it. FairSystems was in play.

‘In play’ is merchant banking jargon. It means that a company is vulnerable to takeover and a potential predator has publicly signalled his interest. It means that if anyone wants to buy the target company, they had better declare themselves. It is an apt term. Big companies and Wall Street arbitrageurs play with the target company’s stock price, and ultimately its future. It is very rare for a company in play to remain independent.

But that is what I was determined FairSystems would do.

I told David what Jenson had said. I called Rachel and Willie into my office, and told them too. I told them I was determined to keep FairSystems independent. Rachel nodded, Willie looked worried. David just smiled. That disconcerted me. It meant he didn’t think I stood a chance.

I called Sorenson in California. His secretary said he was actually in London on business, and gave me the number of the Hyde Park Hotel where he was staying. Fortunately, he was in when I called. I told him the news.

Sorenson took it in his stride. His deep American accent powered down the lines, unruffled, in control. ‘Good. This is just the opportunity we’ve been looking for. It will move the stock price up. Let’s tell Wagner Phillips to get a move on. If they can find us a buyer now, we can keep control of the process and find the best price and the best fit.’

It made sense, but I wouldn’t do it. I couldn’t stall Sorenson any longer.

‘No.’

There was a pause. When the line came to life again, Sorenson’s voice was still calm. ‘Why do you say no, Mark?’

‘Because I want to keep the company independent.’

‘I’d like that too,’ said Sorenson reasonably. ‘But it just can’t be done. There comes a time when you’ve got to punt. FairSystems will be history in three weeks unless we do something. At least this way we stay in the game. Really, Mark, we have no choice.’

‘My father and I can block a sale,’ I said. ‘I will not sell out.’ My voice was as firm as I could make it.

Sorenson sighed. ‘Is that your last word, Mark?’

I suddenly felt wary. Sorenson’s voice was not threatening, but nonetheless he was warning me not to cross him. ‘Yes,’ I said.

‘OK, I’ll call you tomorrow. I’m disappointed in you, Mark.’ He was gone.

I wondered what would happen next.

The answer was waiting on my desk the next morning.

It was a fax from Burns Stephens, FairSystems’ lawyers. It announced that an extraordinary general meeting was to be called the next Tuesday at the offices of Burns Stephens in Edinburgh. A motion to remove myself as managing director would be put forward. The letter said that it was in all the shareholders’ interests to sell the company as a priority, and I had declared myself completely opposed to this course of action. It was signed by Walter Sorenson as chairman, and the only other non-executive director, Nigel Young.

Attached to it was a form waiving the shareholders’ rights to twenty-one days’ notice of an EGM with an explanation that such a delay would not be in the best interests of the company, whatever the result of the meeting.

I called Willie and Rachel into my office, and asked Willie to bring the company’s articles of association.

I showed them the fax. Willie’s ever-present frown deepened.

‘Can he do this?’ asked Rachel.

I raised my eyebrows at Willie.

He burrowed through his papers. ‘I think he can. We had to change the articles of association when we did the Initial Public Offering last year. It gives the non-executive directors powers to call an extraordinary general meeting to remove executive directors if they believe those directors are acting against the interests of public shareholders.’ He stopped at a page, and scanned it quickly. ‘Yes, here it is.’

‘And what’s this waiver?’

‘Technically, there should be twenty-one days’ notice before an EGM is held. Here they’re asking for only six. But if enough shareholders object then they will have to wait the three weeks.’

I thought about that for a moment. Sorenson was right. If there was going to be uncertainty over the management of the company, the sooner it was resolved the better. ‘No, six days is fine,’ I said. ‘But what happens at the EGM?’

‘The motion is put to shareholders, and they vote. A simple majority will suffice for the motion to be carried. Most of them will vote by proxy, of course.’

‘So as long as I can count on just over fifty per cent of the vote, then I keep my job?’

‘That’s right,’ said Willie. ‘I’ve got a list of major shareholders. Shall I go and get it?’

I nodded, and Willie scurried out.

I looked at Rachel. ‘This is not going to be easy,’ I said.

She gave me a half smile. ‘I appreciate you trying.’

‘I want this company to remain independent as much as you do.’

Another half smile touched her lips.

I pointed to the publicly held figure of forty per cent. ‘What do we know about these?’

‘Not much more than when you asked me last time,’ said Willie. ‘Except, of course, that we know Jenson has five point seven per cent according to the thirteen D he filed yesterday. All the others are nominees.’

‘Frank Hartman chief among them,’ I muttered.

‘Who’s he?’ Willie asked.

‘An arbitrageur who’s been accumulating our stock.’

Willie grimaced.

‘Now, how does this stack up?’ I grabbed a piece of paper and wrote two columns: SALE and NO SALE.

I put Sorenson, Baker and all the publicly held stock in the SALE column. I was sure Wagner would recommend a sale to his clients, and I saw no reason why Jenson, or Hartman or whoever else owned the stock would think differently.

In the NO SALE column I put myself, Rachel, my father and Karen.

‘Put the employees there too,’ said Rachel.

‘Really?’

‘They’ll back you, you’ll see,’ she said.

‘OK.’ I wrote them in. ‘Willie?’

He was plunged into deep, deep confusion. ‘Ooh, I don’t know, Mark. I mean I’d like to support you. But Walter is right about the cash situation. It’s very risky not to sell. I don’t know.’

I looked at him and smiled. It was unrealistic to expect Willie to take the high-risk option, and he didn’t really owe me any personal loyalty. So I put him in the SALE column.