“Zack, I beg your pardon!” Levy interrupted. “You can’t blame Alex for the Database shareholders’ decision.”
“What the hell!” Zack jumped up and laughed derisively. “You’re all blind because she closed a few good transactions! But she just screwed up the year’s biggest deal in the technology sector!”
“That’s not true!” Michael Friedman objected. “She did the best she could. She made a solid offer. Database stock was to be acquired for forty dollars a share—”
“I don’t give a shit how good that damned offer was.” Zack cut him off harshly. “It wasn’t good enough. Why are we paying her all of this money if she can’t even keep an eye on the market properly?”
“That’s not fair, Zack,” John Kwai said. “Alex has closed a lot of good deals for us. We can’t condemn her just because one of them goes sour!”
“Come with me, Zack.” Levy threw an imploring look at his managing director. He was the only one who knew why Zack was overreacting like this. Since Alex had told them about the planned deal, MPM had established a large position in Whithers shares—causing their stock price to skyrocket accordingly. Levy guided the incensed man to an adjacent office and closed the door.
“We’re ruined, Vince!” Zack exclaimed in agitation. “Jack and I bought a shitload of Whithers stock for thirty-eight a share, fucking hell! We’ll never get rid of them at this price!”
“Calm down, Zack,” Levy said in a conciliatory tone. “We can handle a loss of a few dollars per share.”
“No, we can’t!” Sweat was running down Zack’s face. “I invested a fucking hundred million dollars!”
“Excuse me?” Levy went pale. “Are you crazy?”
“It was a sure thing! According to Weinberg’s forecast, the stock would have gone up thirty points after the announcement of the takeover.”
Zack’s body shook. His face flashed red and paled again.
“I financed the hundred million through LMI.”
“You’re joking.” Levy couldn’t believe his ears. “How could you do such a thing? We talked about buying for ten million, maybe fifteen—but one hundred million…That can’t be true!”
“I’m not joking, damn it!” Zack roared at him. “Fucking hell, I still can’t believe it!”
“We have to get rid of these shares immediately,” Levy said, struggling to stay calm. “Call our broker on the West Coast. The exchange is still open there. Tell him to sell at any price!”
Zack didn’t hesitate. While Zack was on the phone, Levy paced, looking panicked.
“Whithers is trading down to thirty-one at the Pacific Stock Exchange and thirty and seven-eighths on the OTC market,” Zack said in a sepulchral tone. “Koons will try to sell as much as possible, but it doesn’t look good.”
Levy shook his head with a sense of helplessness. Because of Zack’s greed, they were sitting on a pile of devalued stock that was on its way to hitting rock bottom.
“I have to talk to Vitali,” Levy murmured. “This is a catastrophe.”
“This is more than a catastrophe,” Zack said grimly as he dialed another number. “MPM is ruined.”
“How could you do this without discussing it with me in advance?”
Real horror scenarios played back like a film in Levy’s mind’s eye. He saw himself at the center of an SEC investigation, his name in the headlines, his firm on the brink of bankruptcy.
“Don’t freak out!” Zack snarled at him. “Maybe there’s a way to get us out of this mess unscathed.”
“What do you mean?”
“As of now, no one knows about the Database shareholders’ decision. I know a few people who would be thankful for a tip. I could sell the Whithers stock to them.”
“No!” Levy said sharply. “Under no circumstances will you do that! No employee of LMI will pass on insider information with one hundred million dollars on the line. If that got out, we’d be ruined. No one would do business with us again.”
Levy left the room and rushed into his office to call Vitali.
It was seven thirty when Sergio Vitali entered Levy’s office.
“What’s going on here?” The look on Zack and Levy’s frozen faces soured his mood. Zack had four telephones in front of him, and an ashtray overflowed next to them.
“The Whithers deal is off,” Levy said gloomily.
“So what?” Sergio looked back and forth between the two men.
“We were sure that the deal was sealed, so Zack bought one hundred million dollars’ worth of Whithers through MPM. The share price has already fallen thirteen dollars since news broke that Database is merging with Softland Corporation. The hundred million was financed by LMI. We’re done.”
Zack turned around. His face was pale, and his voice sounded strained.
“I just managed to sell another hundred and fifty thousand shares at thirty-one dollars, but that was it.”
“If Whithers opens below thirty dollars tomorrow, we’re ruined,” Levy said. “That will certainly happen. I even think they’ll halt trading in Whithers altogether. Not a single soul will want to buy Whithers stock.”
“How could this happen?” Sergio asked. He suddenly fully understood the consequences.
“That dumb bitch screwed it up,” Zack said.
“Who is he talking about?” Sergio looked at Levy.
“Alex Sontheim,” Levy replied, “but it’s not her fault. She prepared a good offer. Everything went well and the lawyers agreed, but then this white knight appeared and made a better offer. That’s business, it happens. It was unfortunate that Zack bought so much of it.”
“This is the second time in a very short time span.” Sergio turned toward Zack. “What was that other deal?”
Zack threw him an angry look.
“Syncrotron.” He clenched his teeth in anger.
“What can we do now?” Sergio asked. “It’s pointless to sit around and wait for the exchange to open in the morning.”
“There’s nothing more we can do.” Levy poured himself a double shot of whiskey. “We’re sitting on a pile of shares that no one will take off our hands. MPM needs to liquidate its position tomorrow and raise a hundred million dollars. LMI is financially solid, but we can’t write off such a large sum just like that.”
“Tell Lang to sell other shares…of something…what do I know!” Sergio suggested.
“We already considered all the scenarios.” Levy shook his head. “Even if MPM liquidates all of its assets, we have a maximum of fifty million. MPM will be in violation of capital requirements tomorrow morning, and therefore insolvent.”
“And what does that mean?” Sergio asked in irritation. “Can you please explain it to me in plain English?”
“It means,” Levy said in an annoyed voice, “that MPM is bankrupt.”
“Never has a company of mine gone bankrupt!” Sergio said, struggling to keep his voice down. “Get Alex here immediately, and also Friedman, Weinberg, and Fitzgerald.”
“We can’t do that,” Levy reminded him, “because they don’t know that MPM belongs to us. They didn’t understand why Zack was freaking out. For them it’s just a lucrative deal that slipped through our fingers.”
Sergio sat down and began deliberating feverishly. If that was the case, then it would inevitably become public who was behind MPM and SeaStarFriends. His name would be tied to a bankrupt company in all the newspapers. And not only that: if the press caught wind of the fact that he and Levy—as the president and a board member of LMI—were involved in insider trading through their own brokerage firm, they would be ruined. It would have unforeseeable consequences for all of his businesses. Sergio knew how sensitively his business partners reacted to negative headlines. If he were charged with serious violations of securities law, it would even be worse. He needed to prevent this at all costs.