Lenny had been called many things throughout his life. He was never the most popular kid in school, nor the best looking. He wasn’t a jock or a chess player. Lenny knew only two things: How to run a business and how to shred a business. He had been called a corporate raider, a shareholder’s advocate, and everything in between.<\/p>\n
He had worked as an accountant for a large auditing firm before they got into legal trouble and lost their license. He got out in time to save his own license and avoid paying any fines.<\/p>\n
Lenny hadn\u2019t been paid a lot working as an auditor or a senior auditor, but he did know how to read balance sheets and smell ripe fruit. He played a lot of penny stocks while working as an auditor because those were not on the verboten list of things to do. A few thousand dollars bought you millions of shares in those companies. Lenny was good at finding those with a chance of turning around. He managed to turn $10,000 into $10 million more than once.<\/p>\n
After leaving the audit firm Lenny could invest in stocks trading on the big exchanges. He used all of his audit contacts to get inside information and quarterly reports days before they went public. He formed an investment group so things were done through company accounts and paid himself a healthy salary. What really shocked him was when a couple of other wealthy individuals offered to invest in his company. Overnight he went from managing $50 million in assets to managing more than $500 million.<\/p>\n
This wasn\u2019t a large operation and it didn\u2019t advertise. He had a very nice office in a very nice office building away from the hustle of the city. There were five programmers, three analysts and a receptionist. Legal services were provided by a law firm kept on retainer. Lenny\u2019s data center wasn\u2019t a bunch of worthless PC\u2019s. He ran everything on a fault-tolerant OpenVMS cluster. He even had a hot site on another power grid out in another suburb. As tiny as Lenny\u2019s operation was, he spent well over $1 million per year on IT and data services because that is what made the money.<\/p>\n
On this particular day Lenny had received a data file from one of his informants. It was the quarterly report for First Global Bank in XML format. The report wouldn\u2019t come out for several days, but Lenny wanted to see what was going on. He loaded the data into one of the formatting programs and let it crunch the numbers. Something stunk with this report. First Global was going to beat analyst estimates by nearly a dollar per share, unless the analysts quickly upped their estimates. The analysts generally didn\u2019t miss sales or business increases, so this must have occurred from someone refusing to eat for three months.<\/p>\n
At any rate, this stock was going to hop big time, so Lenny keyed in the trading parameters of maximum price, total number of shares to be purchased, and chose an account list to spread the purchases across. Lenny always tried to purchase more than 5 percent of a company, but until he was ready to go public, he spread the purchase across many trading accounts so the SEC couldn\u2019t figure it out. Lenny had trading accounts spread across a hundred paper companies. Every one of his employees had set up a P.O. Box address for at least a dozen of these companies. Banking stocks had been trashed lately, and the entire stock market was looking for some good news from the financial sector. This was going to be good for a three to seven dollar bump in share price and Lenny wanted to take advantage of it. He keyed in the target sell price for each of the accounts doing the purchases and then chose the submit option.<\/p>\n
Most people thought Lenny\u2019s programmers spent their entire day thinking of new ways to analyze financial data. In truth they spent about three days per year doing that. The rest of the time they spent creating inventive ways to distribute purchases so Lenny wouldn\u2019t have to go public until after he owned 40 percent of a company instead of the 5 percent the SEC made you report.<\/p>\n
With the purchases submitted and waiting to happen, Lenny called in his three analysts and told them to start digging on this and find out where First Global slashed a dollar per share from its operations over a year ago. It shouldn\u2019t be a big task for them because there was a program on the system to kick those things out. He wanted them to find out the details, not just the place where the numbers differed. Lenny doubted the bank managed to trim a penny per share in a hundred locations, so there should be a dead fish lying on the bank for them to find.<\/p>\n
By this afternoon Lenny should have the company\u2019s credit maxed out purchasing 100 million shares of First Global Bank. Once the target was achieved he was going to have several trading floor workers put out the story that First Global Bank was going to beat analyst estimates and beat them big. The rumor sniffers would hear the rumor and see the trading volume. They would assume it all to be insider trading and jump on the band wagon. Stock would be up two dollars per share an hour later. If Lenny didn\u2019t have the rotting fish in his hands by then, he might have to get out rather than run a bigger play.<\/p>\n
You see, Lenny knew how to run a company and Lenny knew how to shred a company. You could make a profit running a company, but you always made a killing shredding a company. This company was looking like a perfect setup. Yes, he would make around seven dollars per share during the run-up with his little bit of insider knowledge, but that was nothing compared to the sixty dollars or so per share he could make by selling short after the run-up then shredding the company. All it took to start the shred was a few well-placed rumors based on facts. Before Lenny could make more than the initial bump, he had to hold the rotting fish in his hand.
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You are reading a special promotional version of \u201cInfinite Exposure\u201d containing only the first 18 chapters. This is the first book of the “Earth That Was” trilogy. You can obtain the entire trilogy in EPUB form from here:<\/p>\n