Monkey Business (24 page)

A road show is exactly what it sounds like. It’s a show that the bankers and the company take on the road to the investors.
The show is well rehearsed. There are directors,
producers, costumes, and props. Sometimes there are videos or product demonstrations. The road shows are a lot like the infomercials
on late-night TV that tell you how to get rich and be your own boss. A slide show is created to make the presentation more
user friendly. A finely scripted monologue is written for the company executives who are doing the presentation. The monologue
is synchronized with the slide presentation.

The whole show is rehearsed, over and over again. The bankers ask the company executives mock questions to make sure that
the company executives will be ready with any and all the answers. No stone is left unturned. Every detail is covered. Each
of the potential investors will get no more than an hour with the management team, so the bankers have to make sure that the
song and dance will go off flawlessly.

Meanwhile, as the show is being rehearsed, a whole cast of salespeople and professional travel planners in the investment
bank are scheduling the meetings with potential investors. The associate is their ringleader. The associate has to book plane
flights, hotel rooms, limousine pickup times, and dinner reservations. The associate is the pack mule. The associate has to
carry extra prospectuses, the slide-show presentation, and all the audiovisual equipment. The investment banking travel department
will help set up some of the details, but if there’s a fuckup it’s the associate’s fault and the associate’s responsibility
to fix it. Sometimes, if the road show schedule gets tight, a private jet gets chartered. That can take a major burden off
the associate’s back. A good associate, however, will have a backup jet available, ready and waiting just in case the first
one has a mechanical problem. Every base
must be covered—once, twice, three times. At times, associates feel not like they’re going on a road show to sell a deal to
investors but like they’re astronauts planning man’s first mission to Uranus. Meals are planned, backup meals are planned.
Hotel rooms, backup hotel rooms. Limousines and backup limousines.

The problems with travel, especially road show travel, get even worse when you have to go overseas. It’s not easy to be a
mule when you can’t understand the language. But that’s not the only problem. The time zones are all messed up, everybody
who’s French hates everything American, and the Germans eat sausage for every meal. Talk about your harrowing experiences:
try having a bratwurst at 7:30
A.M
.

Rolfe did a lot of international travel. Instead of spending time in California, the way he thought he was going to, he ended
up making a whole lot of random trips to Europe. He didn’t like them much. There was good reason why.

My first experience with international travel at DLJ was just a primer. It was a harbinger of much worse, and much uglier,
things to come. I popped my cherry on the European leg of a road show for a junk bond offering. A storm trooper in managing
director’s clothing called me up and barked into the phone: “Rolfe, you’re gonna cover Europe on this road show. Pack your
fuckin’ bags!” I was thrilled. I was going to Europe. I was the big man, heading over to the Continent to sell alternative
investment products to Europe’s landed aristocracy. It seemed
sexy. I was an international playboy. It was the ‘80s all over again.

It didn’t take long to shatter the illusion. I was midway through my first foray to the Old Country when I realized how much
international travel sucked. The time changes completely fucked me up. The institutional accounts in Europe were all grade
B—the bastard stepsons of their U.S. counterparts. Europe was just a backup in case we couldn’t rustle up enough demand back
home. I was a pitiful schmuck, baby-sitting a management team and peddling junk bonds to marginal European accounts. It was
exactly the kind of assignment that was custom made for an associate.

The European institutional investors were all based out of either London or Paris, so just about every road show DLJ did made
a stop in both cities. Typically, we’d take the management team on a red-eye out of New York that would get us into London
just as the day was starting. A limo would pick us up at the airport and we’d spend the morning visiting British asset managers,
all badly in need of dental work, who spent more time worrying about getting their tea “just so” than they did listening to
us make our pitch for the crap we were trying to sell. We’d then jump an early-afternoon plane to Paris, where we’d spend
the next few hours trying to sell the deal to small groups of gamey Frogs who made their Brit counterparts look like rocket
scientists.

After we’d finished up with our meetings in Paris, we’d jump a plane back to New York, which would get us back home just a
little over twenty-four hours after we’d left. That usually meant that we would arrive just in time for me to put in another
eight hours at work before I finally
made it home to get some sleep. That was how the international leg of the road shows usually worked. Same bullshit as back
home, but with even less sleep and funkier breath.

As it came to pass, though, the Paris-London road shows were just scrimmages in my international travelogue. They were warm-ups
for the big game, the game where I’d get my butt reamed out like a sclerotic vein undergoing balloon angioplasty.

The Big Kahuna turned out to be a due diligence trip I had to take for a co-managed IPO. It was for a company called Global
Wireless Assets (GWA). The deal looked soft and pretty from afar, and I wanted to take it to the dance. The closer I got,
though, the nastier it started to look. I turned to run, I tried to scream, but it was too late. I couldn’t turn back. I was
obligated to boogie.

GWA was a “story” stock. That meant that there were no fundamentals to support valuation. It was the kind of investment opportunity
that would have made Ben Graham, the father of value investing, turn over in his grave. The company had no earnings. It didn’t
have any cash flow. It’s assets consisted primarily of equity stakes in a bunch of wireless communications properties all
over the world. Its cash was heading out the door quicker than a greased pig in a Kansas City slaughterhouse, and it needed
to get to market fast before it went broke.

GWA’s business development director was running the capital-raising effort for the company. He was an ex-Goldman banker, which
automatically meant that Goldman was leading the deal. SBC Warburg had been added to the underwriting lineup as a co-manager
due to its significant European presence, and CIBC Wood Gundy
was on board as the Canadian representative. That left DLJ, the final leg of the underwriting stool. DLJ didn’t really belong,
but GWA management was worried that the money from the IPO might not be enough to tide them over. If that happened, they figured
that they’d need to issue some junk bonds. And if that happened, they wanted the DLJ franchise around so that they could jam
some of those junk bonds down the throats of the hungry DLJ customers.

GWA’s ownership interests were far-flung. The company had interests in telecommunications operations in Canada, Ireland, France,
Austria, Poland, Mexico, Pakistan, and Hong Kong. In order to underwrite the deal, tradition had it that the bankers needed
to see the company’s operations. That was so that we could represent to the potential investors that the deal wasn’t a complete
scam. The ironic thing was that they could have put any of us bankers in any room, anywhere, full of beeping metal boxes with
blinking lights and we would have given the thumbs up. We didn’t know any better. It was like asking Ray Charles to opine
on the authenticity of a Rembrandt.

Since the company was so hard up for money the deal was on a fast track. That meant that we were going to have to do our diligence
on the operations in record time. It was decided that we’d visit all the regions, with the exception of Pakistan and Hong
Kong, in the course of a one-week diligence marathon. We were going to have to pass up the curry and the chop suey for the
sake of expediency.

Monday, 8
A.M
.—We all met in Toronto on a Monday morning at GWA’s world headquarters. The one-hour,
350-mile trip from New York to Toronto was the first small step in our diligence marathon. I was the sole DLJ representative.
Co-managed deals generally didn’t merit the presence of anybody over the rank of associate on diligence trips and this one
was no different. I alone would bear full responsibility for DLJ’s potential legal exposure. I wasn’t sweating the details.
I viewed it as a boondoggle.

The day in Toronto had been planned as an overview of all the company’s operations. It was supposed to set the stage for the
coming week’s activities. We sat in a room with no windows, eating finger sandwiches and listening to the company’s business
development director run through his descriptive analysis of the various properties. He talked for six hours straight without
taking a break. I don’t even think that he took a sip of water. He had a glassy-eyed manservant who circled the room nonstop
handing out reams of paper that were covered with details and numerical analyses. By lunchtime of that first day I was already
thoroughly confused. I couldn’t get straight whether the paging operations were in Austria or Paris. By late afternoon I’d
completely given up. There was just too much stuff to remember.

At 5
P.M
. we got into some limos and headed out to the airport. We were short one seat, and I somehow managed to get elbowed up front
to sit with the driver. It was my first clue that the other underwriters viewed my presence as an annoyance. They viewed DLJ
as the unclean freak, and as the sole DLJ representative they looked upon me as the freak incarnate who was responsible for
taking fee dollars out of their pockets. That didn’t bother me so much. The limo driver was a good guy, and
on the way to the airport we talked about his new Lincoln Continental while the other bankers sucked up to the company guys
in the back. I could have sworn that I heard some slurping noises.

Monday, 7
P.M
.—Our British Airways flight departed Toronto International Airport bound for Dublin. The lady banker from Goldman was sitting
next to me. She wouldn’t even talk to me. She answered every question I asked her with a one-word reply. What a bitch. I took
the pair of earplugs out of the travel packet that the stewardess had given me, stuffed them up my nose, and pretended to
go to sleep. I knew that would bother her. Thirty-five hundred miles and six hours later, we touched down in Dublin.

Tuesday, 6
A.M
.—We lost five hours on the trip over, so we arrived as the sun was coming up. We were scheduled to stay at the St. Rugala
hotel and our meetings for the day had been scheduled in one of the hotel’s conference rooms. The St. Rugala hotel was a fancy
one. In Europe, that meant that it was in a really old building with small rooms and crappy plumbing, and that it cost a boatload
to stay there. Once we were checked in, we had a half hour to blow before our meetings with the management team from GWA’s
Irish operations were set to begin. That was just enough time for me to figure out that the hotel’s cable system had a free
soft-porn channel. Maybe that was what made it a luxury hotel, no extra charge for
porno. I called my voice mail back at the office. I had fourteen messages.

The meeting was a farce. We had traveled 3,500 miles to do diligence on the operations, and all we did was sit in a hotel
conference room and listen to a bunch of suits tell us about what a great business they were going to build. We could have
done it over the phone and saved the airfare. Company management viewed the Irish business as a major piece of the overall
value, but the operations hadn’t yet been built and the plans were for implementation of an untested technology. They didn’t
even have an antenna to show us. They had nothing.

By late afternoon I was dragging hard. I’d been up all night and my body couldn’t figure out what the hell was going on. For
lunch we’d been served cucumber sandwiches and flat orange drink that just hadn’t done the trick.

I figured that I could slip upstairs to my room for just a couple of minutes to lie down. I wouldn’t be gone long, and I wouldn’t
miss anything important in the diligence meeting. I’d pretend that I was leaving to make a phone call. I could close my eyes
for just thirty minutes. Nobody would even notice.

I left the conference room and made my way upstairs. The bed felt so good. I was so tired. I’ll just relax for a minute, I
told myself.

I woke up, rolled over, and looked at the clock. Fuck. My thirty-minute snooze had turned into a two-hour nap. I ran down
the stairs and back into the conference room where the diligence meeting was taking place. The other bankers were taking a
quick recess, working the phones to their offices back in New York and Toronto.
The SBC Warburg banker spotted me as I entered and made an exaggerated stage whisper, loud enough for everybody present to
hear. “Oh, and where have
you
been?”

“My apologies,” I replied, “one of my other deals blew up. I’ve been trying to salvage it.”

I didn’t realize that my hair was standing straight up in the air, my shirt was untucked, and that everybody in the room knew
I was lying.

I took a seat. The useless diligence dance continued, on into the night.

Wednesday, 5
A.M
.—After four hours of sleep, we got on the earliest possible flight headed to Paris. Another 190 miles. Another hour time
change. GWA operated a dispatch radio business in Paris. They owned a few big antennae that sat up on top of hills around
the city. Truckers and cab drivers bought radios from the company and used them to talk to each other through the antennae.
GWA had given up trying to convince the bankers that the business was a sexy one. Instead, they told us it would be a “solid
business.” In banker language that meant that it wasn’t a hot prospect and that it didn’t have any good marketing potential.