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Author's note: If you are looking for wall-to-wall sex, look elsewhere. 
This book is a romance with a business setting. Beyond that, the sex is 
comparable to - or less than - what one would find in almost any work of 
popular fiction.

Permission is granted to post on any free site, as long as the copyright 
statement is included. Please advise the author of any such postings.

Comments are welcome and encouraged. Please address me at 
morg105829@aol.com.

I hope you enjoy the book. My plan was to post a chapter each weekday; 
however, Eli has been having problems, so ASSM has not been posting 
daily. As a result, I am uploading the remaining chapters now.  This is 
chapter 12 of 16.

Six-Month Turnaround

Copyright 1992, 1998 by Morgan. All rights reserved.

Chapter 12

It was late July and a very hot summer day in Milwaukee when Cliff got a 
call from Steve Muller. Steve sounded excited and asked if he could come 
over to see him. Cliff told him to come anytime and a few moments later 
he came into the office followed by Sandy Donnell and Carlos Murphy. 
Carlos was their find of the year. He was a third- generation 
Argentinean, educated in the States. Despite its spelling, his last name 
was pronounced Mur-pee; Carlos told of his grandmother, a native-born 
Argentine, who never spoke a word of Spanish in her life. And, he 
claimed, never understood what she called "that heathen tongue," 
referring, of course, to Spanish. Carlos was from a town in Argentina 
named Murphy, as well. Steve was never sure if they found Carlos or he 
found them. He was only twenty-six years old and had earned his MBA from 
Babson College. He had joined the company to lead its drive to increase 
export sales, and had just returned from his first sales trip to South 
America.

One look at their faces told Cliff the trip had been a success. He 
whispered something to Sandy who grinned and left the office. "Carlos, 
how did it go?"

"Well, Boss, they loved our special Latin American program!" The young 
man grinned broadly as he said it. The special Latin American program 
consisted of the most elementary things: translating the packaging 
materials and instructions into Spanish, preparing normal export 
documentation, and accepting export letter-of-credit financing. Murphy 
Manufacturing had never done any of those things before. Moreover, as 
far as anyone in the company knew, Carlos's trip was the first time 
anyone from Murphy had ever visited Latin America on business.

"I only went to Mexico and Venezuela on this trip. It was the funniest 
thing I have ever seen. My first stop was Mexico City. I had a couple of 
names and telephone numbers of companies that had bought from us in the 
past on our usual export terms. I called the first name on the list." 
The "customary terms" had been cash in advance, with buyer taking 
delivery at the Murphy shipping dock. Any special export arrangements 
were the buyer's problem. The only thing Murphy did was provide 
heavier-than-normal crating, and even that had been provided with great 
reluctance. "At any rate, I introduced myself and asked for an 
appointment. I thought the guy was going to faint when I said I was down 
from Milwaukee and actually spoke Spanish. Anyway, he wouldn't hear of 
me coming out to see him. He came dashing down to meet me at my hotel. I 
guess he made a call or two before he left his office, though. I wasn't 
off the phone five minutes when it started to ring. Other auto supply 
people heard I was in town. Anyway, the first guy, Sr. Gonzalez, arrives 
at the hotel, and I meet him in the bar.

"Cliff, I never got out of the damned bar. And I didn't even pay for a 
drink. Incidentally, you know what impressed them the most? The fact 
that Murphy Manufacturing had an export sales manager, and was actually 
interested in supplying them on a consistent basis. Their history with 
us - and a bunch of other American auto parts companies, apparently - is 
we only sell them if, as and when we have a little extra capacity. 
They're typically turned off more than they're on. Anyway, here's what I 
got." He took a stack of signed orders out of his briefcase.

Sandy noted that every one had a letter of credit attached. She said, 
"These are prepaid orders, if I understand this stuff. Moreover, every 
one of the LC's is on an American bank. As I understand it, we ship the 
stuff. When it's received in Mexico, the LC is released and we have our 
cash. Right?"

"Right! Then I went to Caracas, and the same thing happened, only more 
so. They have more money and more big US-built cars. We haven't totaled 
it all, but it could total almost as much as the first Kaga order!"

Just then there was a knock at the door, and Sandy got up. She returned 
to Cliff's desk with a brown paper bag that had been handed to her. Then 
she took out a cold six-pack of beer and opened cans for everyone. "This 
calls for a celebration! It's hot, this is a manufacturing company - we 
get our hands dirty - so beer's in order. Cheers, Carlos, and 
congratulations!"

That afternoon, Sandy buzzed to say there was a Kelly Cameron to see 
them from Snyder Securities in Chicago.

"Oh, shit!" Cliff said, "I completely forgot, and the tone of your voice 
says I never men tioned it to you, either. Cameron is a securities 
analyst. I think he's the only one who follows Murphy. I was supposed to 
see him in April but I ducked. I guess we have to see him. Do you have 
time to put on your treasurer's suit?"

"Sure. I'll ask Betty to go bring up Cameron, and I'll join you in a few 
minutes."

Betty Ames was looking beautiful when she showed Kelly Cameron into the 
office. Cliff was surprised to find that Kelly was a girl, and his 
surprise showed on his face. The young woman appeared to be under thirty 
and was very attractive. She was five feet four, with short, dark hair. 
She smiled and introduced herself. "I apologize for the 
misrepresentation, although it really isn't. My name really is Kelly. My 
interest is manufacturing companies, particularly automotive-related 
ones. A lot of your colleagues in the industry don't like dealing with 
women, so I guess I go out of my way not to mention that I'm female." 
When Sandy entered the office and introduced herself, Kelly looked at 
her closely. "Miss Donnell, you're the Murphy family of Murphy 
Manufacturing, aren't you?"

Sandy was startled, but decided the meeting was essentially on the 
record. Lying to an analyst wasn't smart and could possibly cause 
problems with the SEC. "Yes, I guess I am, if you mean the family stock 
is mine. It is... or will be in a couple of months."

Cameron took a seat and started right in. "Mr. Fitzpatrick, Murphy 
hasn't been going anywhere to speak of. I estimate your current sales 
are in the range of $500 to $600 million. For the last few years - too 
many years - the company has been earning about 1 percent on sales, net. 
That generates five to six dollars in earnings per share on the one 
million shares outstanding. With no growth and uninspired profits the 
market has been giving you a multiple of about five. The trading range 
for the last few years has been $20 to $30 per share.

"I recently received a tip there are major problems here and came to 
find out. First, I will tell you what I have heard, and then you can 
comment. Number one: You have been cut off as a supplier to Magna 
Motors. That was reported on the broad tape. It's about half your valve 
and ring business, maybe more. I would estimate the loss at about $200 
million a year in sales. Number two: You have sold off a whole bunch of 
your auto parts stores. I would guess maybe two-thirds of them. That's 
another drop in sales of about $65 million or so. Add those together, 
Mr. Fitzpatrick, and Murphy has lost about 50 percent of its sales give 
or take a bit. I'm looking for your profits to drop like a stone. How am 
I doing? Oops! One more thing: the word around is George Simpson of Ajax 
hates your guts and wants to destroy you. Comment?"

"With no flattery intended, I'm impressed. You obviously know the 
business you follow, and not all of your colleagues do. Let me take your 
comments in order. First, the history is obviously correct: the level of 
sales, profits, number of shares, and so forth. With respect to Magna, 
you are also unfortunately correct. We lost the business because of poor 
quality." Kelly's eyebrows rose on his admission. "However, I have a 
letter I would like to show you. We have been named the first mainline 
American supplier to Kaga Motors' plant in Michigan. I have a letter 
here from the managing director in Tokyo I will share with you. In fact, 
I'll give you a copy if you promise not to show it to anyone until I can 
get express permission from Japan to give it to you." He took out the 
letter from his file and gave it to her.

She read it and let out a low whistle. "Mr. Fitzpatrick..."

Cliff interrupted. "Please call me Cliff. We're very informal here, and 
I tend to do a double-take and look for my father when someone says, 
'Mister Fitzpatrick.' Will you?"

"Sure, and please call me Kelly. I don't think I'm letting down the bars 
too much. Anyway Cliff, if I understand this letter correctly, although 
you lost the Magna business on quality, that's the very basis on which 
you got the Kaga business. And with all due respect to our friends in 
Troy, Kaga would throw out what Magna terms 'commercially- acceptable 
quality' as totally unacceptable. What happened?"

Sandy entered the conversation. "Cliff Fitzpatrick happened. He junked a 
ton of old, unsalable product. There's a significant asset write-down I 
guess you didn't hear about, also. It's a write-off of finished goods 
inventory. He found that two of our ten production machines were 
incapable of producing parts within required tolerances and three others 
weren't a whole lot better. We had far more people inspecting than we 
had making. We don't any longer. We have had a huge employee layoff and 
almost took a strike that would have buried the company. Cliff persuaded 
the workers they could produce product every bit as good as the 
Japanese. The rest of the letter speaks for itself."

Cliff smiled at the two young women. "As usual, Sandy fails to mention 
her critical role in all of this. She is the one who spoke to the 
workers. The union president was certain the people were going to walk 
out. Sandy spoke to them as the owner, and they believed her. They voted 
to stay. I think the letter from Kaga speaks for itself. Incidentally, 
that's half of the lost Magna volume now and growing. The latest word is 
the new ring our guy made is going to become Kaga's standard, so there 
will also be royalty income we have never seen before."

"Could I go down to the factory floor?" Kelly asked. "When I visited 
several years ago, I was strongly discouraged from doing so."

"Of course! We would be delighted. I hope you don't mind wearing a hard 
hat? Oh... there's something else. We've got coats for visitors, too." 
He looked at Sandy who went out and came back with a white coat with 
MURPHY in red capital letters across the back, and a neatly stitched 
badge saying Visitor on the breast. The hard hat was adjus table and 
from the way Kelly went to work to size it, this was a familiar process 
to her. She noticed that Cliff and Sandy had their own coats with 
"Fitzpatrick" and "Donnell" lettered on them. Kelly decided that Sandy 
looked very good in her coat with the red hat that matched the 
lettering. She was impressed with the coats, both in terms of Sandy's 
appearance and because it suggested they often visited the shop floor. 
When they reached the floor, she was dazzled. Every worker was also 
wearing a MURPHY coat. Obviously there were three colors - workers, 
supervisors, and managers. It was as smooth running as any manufacturing 
facility she had ever visited. The production machines looked brand new, 
and she could see where two new ones were being installed. There 
appeared to be substantial room for expansion.

Cliff pointed out a small quantity of Spanish-language packing 
materials, and then took her to the cafeteria. When they closed the 
door, the room was silent. Kelly noted that both Sandy and Cliff were 
greeted by first name by everyone. No one seemed at all impressed by the 
fact they were on the floor. Clearly, it was routine. They got coffee 
and took a table in the rear.

"We closed our dining room, so everyone eats here, now," Cliff told her.

"This is the nicest looking plant cafeteria I've ever seen!" Kelly said. 
Sandy noticed that the girl looked hungry.

"Kelly," she said,"do I detect skip-lunch-diet hunger pangs? If we don't 
feed you, you look like you'll eat the table, and I'm not sure it's paid 
for yet."

The girl grinned and accepted the invitation. They went through the line 
again, because Sandy and Cliff hadn't eaten either. When they returned 
to their table, Kelly was even more impressed. "Who runs this place for 
you?" she asked.

"We run it ourselves," Cliff said. "We have an outstanding manager, 
Janet Simmons, who's been with us for years. Incidentally, I showed you 
the Spanish-language packaging. I'm going to tell you a competitive 
confidence. We have a new export sales manager who just returned from 
South America. He only returned this morning, and we're still totaling 
the orders he brought back with him. It appears, however, that we have 
enough business - paid in full, with accompanying irrevocable letters of 
credit - to increase our total sales volume significantly in spite of 
the loss of Magna. I mentioned it's in confidence. The confidence 
doesn't extend to the income effects, but I would just as soon not 
advertise to our competition how good Latin American business can be."

When they returned to the office, Kelly said, "Cliff, I'm impressed. 
What you're telling me is you have more than covered the loss of the 
Magna business, and, I infer, although neither of you said anything, at 
substantially higher margins. There's been an asset write-down, but that 
was junk, anyway. Would I be way off base if I guessed your costs are 
way down, too? For example, I don't see the normal piles of scrap lying 
around. I would guess your raw-material utilization is very high, and 
your rejects are very low. I would estimate you may be looking at a 10 
percent pretax profit now. Would that be close?"

Sandy and Cliff looked at each other. Cliff shrugged and Sandy said, "If 
we think in terms of a reasonable range, I think you're in the ball 
park." Sandy continued, "Now, you mentioned our Stores Division. You're 
right, we did get rid of over two-thirds of our units. We got an 
excellent price for them, by and large. It seems they're worth a lot 
more to some other people than they were to us. The result is we plowed 
some of the money back into our Southern Division which is all we have 
left. We moved the buying function down to Charlotte for the Division, 
changed our merchandise assortment, extended hours, and renovated all 
the stores. Within sixty days, our sales per unit have tripled with 
profits up much more. The result is, Kelly, we haven't lost any sales 
from Stores to speak of, and are looking for substantially higher 
numbers next year. Our profits are... very pleasant." Sandy finished her 
comments with a grin.

Kelly was listening carefully and was now wide-eyed. "What I'm hearing 
is that miracles have occurred here at Murphy. You will have sales 
roughly even with last year or better, but with much higher profits. If 
nothing at all happens next year, sales will be up substantially. 
Moreover, I saw the new machines being put in place. That looks like a 
20 percent capacity increase to me. By the way, you mentioned worn-out 
production equipment. That's the most un-worn-out stuff I have ever 
seen!"

Sandy grinned. "The folks at Micronics who built it just finished 
reconditioning the last machines. They tell us they're better than 
brand-new and our machinists agree. That's where some of the money 
went."

Cliff picked up the narrative. "Then, of course, we have the 
confidential activities of our brilliant treasurer, Sandy, who installed 
a new cash management system. I think it's all in now. She picked up 
about $75 million, so we are in better shape on the balance sheet than 
we've been in years. There's essentially no debt. The cash pickup paid 
for the modernization."

"One last question," Kelly said. "Where do you stand with Magna Motors 
right now? I will make an observation, and I'm not asking for comment. I 
think you are the low-cost producer in this industry right now. Based on 
the Kaga letter, I have to believe you couple that with the highest 
quality. When I was in business school, lowest costs and highest quality 
were a very tough combination to beat. That's my observation. Now back 
to the question. What about Magna? Do you think you'll get back in?"

Cliff answered. "Yes, Kelly, I do. But you know them far better than we 
do. They are very slow to move... in any direction. I believe we will 
get back in, but I couldn't guess when it will happen. Fair?"

"More than fair. Now one more question, completely off the record. When 
are you two going to get married?"

Sandy and Cliff both started to laugh. She answered, "Does it really 
show that much? Of course, I *do* worship the ground he walks on, but I 
didn't think it was so obvious. The answer is we haven't set a date. And 
this whole thing is very much off the record, please?"

Kelly grinned and nodded. "It certainly is. I'll be honest, though. I 
intend to send you a very nice wedding gift when you do because I am 
going to make an awful lot of money on Murphy stock. There's something 
else, though. I wasn't just being nosy. To a person like me who tries to 
figure out what makes a company tick, it's very important because I know 
you are *both* vital to the company. You are also great people. This has 
been the most enjoyable visit I have had in years, and it's going to be 
the most profitable one as well.

"Cliff and Sandy, do you follow the market closely?" They both shook 
their heads. Kelly grinned. "That's great, because if you did that, too, 
I would be in trouble." Her face became serious. "The reason I asked is 
because something strange is going on. It was the reason for my comments 
at the beginning. I'm here because of an anonymous tip. You both know 
what the short interest is, don't you? The extent to which shares of a 
company are being sold short?" They both nodded. "Well, the short 
interest in Murphy is big and getting bigger. I thought I had it all 
figured out, and was toying with the idea of joining the bears - the 
folks selling the stock short expecting its price to drop like a stone. 
You know, I think we're seeing a bear raid."

"I've heard of them," Sandy said, "but I never knew exactly how they 
worked. Money is made when a stock's price drops, but it never seemed 
like a lot of money. After all, if a stock trades at 50 and then the 
price falls to 40, all the short seller made was ten points. There's a 
lot more room on the upside."

Kelly smiled at the question and explained, "You're numbers are correct, 
Sandy, but you're overlooking something. Big money is made because the 
deal involves massive leverage. Let's take a guy with $1,000 and your 
example. If the guy bought the stock at 50 he would have 20 shares. 
Selling at 40, he loses $10 a share, or $200. To keep it simple, I'm 
ignoring transaction costs. Now take a short seller. What does he do? 
First, he sells 1,000 shares at 50. But he doesn't have 1,000 shares; he 
has none in the classic situation. What he does do is borrow the 1,000 
shares to deliver against his sale, paying interest on the borrowed 
shares. Now the stock price drops to 40. He buys 1,000 shares at 40 
using the $40,000 of the $50,000 he got when he sold the 1,000 shares. 
After returning the 1,000 shares he's just purchased to the owner of the 
borrowed shares, he's made $10,000 less the interest expense that he 
paid to borrow the shares in the first place. He's made a profit of 
nearly $10,000, on virtually no investment. His ROI is enormous." 
Looking at Sandy she asked, "Did you follow that?"

"I sure did," Sandy replied. "But what's a bear raid?"

"That occurs when an individual or a group starts selling lots of shares 
in a company short, betting the price will fall. First of all, the mere 
act of selling lots of shares serves to drive the price down, other 
things being equal. But couple that with the expectation of bad news 
about the company, and the share price can drop like a stone. Clearly, 
that's what the bears expect," Kelly explained. "But guess what? Based 
on what I just learned from you and Cliff, the raid is almost certain to 
fail. And you know something else? I'm buying. Could I use a phone 
outside, quick? Then I'll tell you more."

Kelly left the room, and Sandy looked at Cliff thoughtfully. "Now who do 
you suppose would be doing that?" she said. "It bothers me - although 
not for the usual reasons of ego. One of the finance department classics 
is a bit of doggerel, 'He who sells what isn't his'n pays the price or 
goes to prison.' It refers to short sellers. The bothersome thing is 
there is so little float in the stock. There are only one million shares 
out, and the family has more than 65 percent. It's a prescription for a 
classic squeeze on the shorts. They borrow the shares they sell against 
the prospect of a price decline. When the price drops, they buy the 
shares in to replace the shares they borrowed from the original owners 
at a lower price. However, what happens if the price rises - sharply? 
The short- sellers get killed: They have to buy the shares at a higher 
price, and lose their shirts! And I think that's what's about to happen 
as a result of Kelly's report. Honey, would you humor me if I do 
something dumb? Like losing a ton of money? It is mine, though."

He grinned at her and said, "Darling, I never mentioned it, but I bought 
10,000 shares of Murphy Manufacturing before I even started work here at 
prices that average about $22 a share. It represents just about every 
dollar I have been able to beg, borrow, or steal. We've never talked 
about money, but you must get a pretty nice income from your stock. Do 
you, or does it go somewhere else?"

"Mostly it comes to me. You can see I don't spend a lot. And we've been 
saving on entertainment by mostly spending weekends in bed! No, I'm 
okay. Cliff, one thing. Would you please humor me and ask Bill to 
beef-up security? I'm thinking of getting a big agency like Pinkerton to 
send some plain-clothes people in. What do you think?" Before she even 
finished, as soon as she mentioned the word security, Cliff was on the 
phone.

"Bill, it's Cliff. Here's the story: Someone is selling our stock short, 
and it's about to start moving up strongly. It's a classic situation for 
industrial sabotage. See about getting a big security team in for the 
next eight weeks. No, make it ten weeks. I want to be sure the extra 
coverage extends past October 1. And Bill, I want it to start right now! 
They may want a short-notice premium for a few days, but I don't care." 
He hung up the phone. "Is that enough humoring for you? I think you're 
absolutely right."

Kelly returned to the office with a big grin on her face. "I have a 
question. Has either of you sold any stock?" They both shook their 
heads. "How about buying?"

Sandy said, "Cliff bought 10,000 shares before he joined, and I have 
been buying off and on for years. I don't remember when the last 
transaction was. Is it important?"

"Not really. I just sent out a bulletin on the company, and on to 
Dow-Jones for the broad tape. My prediction is for earnings higher than 
last year's. Cliff, I took the liberty of using your name. I said you 
had announced today that Murphy had been designated the first American 
preferred supplier to Kaga Motors. The selection had been made on the 
basis of quality of product. I know you didn't announce it before, but 
technically you should have. Did you buy any stock, or did anyone else 
in the company buy between the Kaga letter and today?

"Actually, I don't think it matters because the price has been slowly 
drifting down. If they bought, they sure in hell didn't tell their 
friends. Or else their friends are as financially naive as you two!" She 
grinned broadly as she said the last words, but Cliff and Sandy were 
both chagrined. They knew about insider trading, but it had never 
occurred to them to make an announcement. Yet they both knew they should 
have.

"I'm sorry, Kelly, and thanks a lot. For that matter, I guess we should 
have announced the loss of the Magna business, too. That was certainly 
material."

"It was, but don't worry. Ajax did that for you. Anyway, there's no harm 
done. Incidental ly, I'm liquidating everything I own to go against the 
short sellers. I can see a classic squeeze coming. There won't be any 
shares to buy to cover their short position. I remember reading a case 
in Financial Markets on a flooring company. In fact, I think it was 
quite similar. Like Murphy, most of the stock was held by the family. I 
think it started with the shares trading around $10. When the squeeze 
hit, trading was suspended at about $25. When it reopened, it jumped to 
about $60 in thirty minutes or so and was suspended again. At that 
point, I think the two sides negotiated surrender terms. The shorts were 
wiped out." She smiled. "I have always remembered that story. It always 
seemed like a great way to make big money, so I'm going to try it with 
you. Do you mind?"

Sandy looked at Kelly thoughtfully. "You are a registered rep, aren't 
you? You can handle customer's accounts directly?"

Kelly nodded. "I sure am. I don't have many, though, but I am trying."

Sandy avoided Cliff's eyes. "Kelly, do me a favor? I propose to call my 
bank and ask them to send you $2 million to open an account in my name. 
Could you do that?"

Kelly's jaw dropped. "Sandy, you're saying you want to open an account 
with me at Snyder Securities for *$2 million*! Cash?"

Sandy grinned. "My, you're a fast learner! That's exactly what I said. 
Is that enough for an account with Snyder?"

"Enough? You're joking! Just a minute." She picked up the phone on 
Cliff's desk and called her office and asked to speak to her manager. 
She told him she was being given $2 million to open an account for 
Sandra M. Donnell, the Murphy Machinery heiress. There was silence from 
Kelly for a few minutes. Then she essentially repeated the story for 
someone else. Finally, she spoke again, "I'll ask her, sir. I don't 
think there's a problem. Just a minute." She turned to Sandy, "This is 
Jack Snyder, the managing partner of Snyder Securities. He would like to 
speak to you, if he may."

Kelly appeared very nervous as Sandy took the phone. "Hello, Mr. Snyder, 
this is Sandra Donnell." She listened with a smile on her face for a few 
moments, then said, "I only met Miss Cameron this afternoon, and I'm 
absolutely delighted to have had the opportunity. I invest money from 
time to time, and was most impressed with her knowl edge of our industry 
and my company." Kelly and Cliff laughed at the face she made when she 
said "my company." She continued, "Miss Cameron makes a great deal of 
sense to me. I was prepared to wire money to you now, but I will be 
happy to give her a check to bring back." There was a period of silence 
while Snyder was talking. She ended by saying, "Thank you, Jack. I look 
forward to meeting you in Chicago, soon."

She hung up the phone and looked at the others. "He welcomed me as a 
customer of the firm." She rummaged through her purse, took out her 
checkbook, wrote a check, and gave it to Kelly. The girl looked at it in 
awe. "My God! Two million dollars! I sweat more than that writing a 
check at the supermarket! Sandy, thank you! Now, who do I have to kill?"

"Kelly, there are only two strings: First, for now it's a treasury for 
you to use to buy into the bears' selling. The market is still open. Can 
we start right now? I don't want to move the price up. I just want to 
keep it from going down. The buying will come from others, and we may 
push it up to... what do you think? Thirty? Maybe thirty-five?"

Kelly just grinned and picked up the phone again. This time she asked 
for the trading desk. "Bill, it's Kelly. I have a good one for you. Buy 
Murphy Manufacturing on the Amex. We have two and a quarter million 
dollars to use. At today's prices that's about 90,000 shares. Just push, 
Bill. I don't want to see a down-tick. Regardless of the money you have 
placed, stop buying at thirty-two if it gets that high. If it does, put 
a buy in with the specialist for the balance of the money at thirty-two 
coming down. Okay? I think we're going to have some fun. And Bill, this 
is most important: Time-stamp the order right now! For you privately, 
this is insider money. An announcement went out about thirty minutes ago 
on the broad tape. It's essential that we are all covered on this. 
Buying came *after* the public announcement. Bill, I'm in Milwaukee 
imposing on some folks. Call me at this number if it starts to move, or 
if anything interesting seems to be happening. In any event, call me 
after the close and let me know what happened." She hung up the phone.

"Kelly," Sandy asked, "are you a beer drinker?"

"I sure am, but don't you have a bar?" She looked around. "No," she 
answered her own question, "Not in this place. This is the home of 
precision parts, and alcohol doesn't mix well with precision." Sandy 
left the office, and Kelly followed her out. "Sandy, I have a favor to 
ask? Could your secretary make a hotel reservation for me here in 
Milwaukee for tonight?"

Sandy laughed, and picked up the phone. She made a reservation for that 
night and guaranteed it to Murphy for late arrival. "Kelly, since you 
know everything else, you ought to know I am Cliff's executive 
assistant, otherwise known as his secretary. I would invite you to stay 
with me but Cliff and I... Well, things get a little rowdy once in a 
while."

"You're a very lucky girl, Sandra Donnell. I think you caught one of the 
live ones." Kelly looked at Sandy carefully, then grimaced. "What a 
stinking shame. I couldn't even give you a fight. My God! To have your 
looks and money on top! It's just not fair." Then she grinned and added, 
"On the other hand, maybe it's a good thing. You're a one-man woman, and 
it's obvious he's a one-woman man. So he's out of action, but so are 
you. I guess that's some consolation for a working girl. And besides, 
you two are going to make me rich!" The two girls shook hands, and went 
back to the office after Sandy made another call.

When they reentered the office and sat down, Cliff told Kelly about the 
increased security. He grinned at her. "I might as well tell you about 
it, since you're one of the family now. By the way, Sandy said two 
million, and I heard you tell Bill two and a quarter. Where's the rest 
of the money come from?"

Kelly blushed prettily. "That's mine. All I can say is that's every dime 
I've got... and then a few. You two have a hell of a business going 
here. There aren't too many oppor tunities in the Rust Belt."

A few minutes later there was a knock on the door. Sandy brought back 
another brown paper bag and opened three cans of beer. "Cheers!" she 
said. "Kelly, this is twice today. The first time was just before you 
came when we found out about the South American orders."

"Damn!" Kelly exclaimed, "I forgot to mention it earlier. I also added 
in the announcement that 'other full-price orders' had been received 
fully covering the lost Magna Motors business. Anyway - even though us 
investment types aren't supposed to drink beer - cheers! You know," she 
said with a grin, "I much prefer pizza and beer to white wine and Brie." 
Sandy and Cliff looked at each other, made a thumbs up sign, and 
laughed. They were still chatting when Cliff's private line rang. It was 
the number Kelly had given her trader.

Cliff answered the phone and passed it to her. "Hi, Bill, what's up?" 
She listened intently and nodded her head. She took out a pad and 
started writing down numbers as a big grin started spreading across her 
face. Finally she said, "Thanks, Bill. Keep me posted."

She hung up the phone and exclaimed, "Damn! It's moving. There's heavy 
action, with a lot of selling. Bill thinks it's more short selling. It's 
trading at twenty-seven now, up a point and a half. The important thing 
is, other people are starting to buy, too. We're going to win this one. 
I can feel it."

"What do we do now? Just wait?" Sandy asked.

"I guess so. Incidentally, you have invested about $200,000 at this 
point, Sandy. Why don't we fill out these dumb forms I need to open an 
account while we wait for the closing?" She took forms from her attaché 
case, and Cliff went down the hall to Steve Muller's office.

Betty Ames gave him a big smile as he walked in. Cliff noticed how 
beautiful and happy the woman was now that John Flood was gone. Steve 
was on the phone. He waved and gave Cliff a big grin. "Yes, sir, I'm 
sure he'd be happy to talk to you. In fact, he just walked into my 
office." He put the phone on hold and said to Cliff, "It's Jack Crowther 
of Magna. He said he just received a report on the broad tape - what's a 
broad tape? - of our contract with Kaga. I told him it was true. He 
wants to talk to you. Do you want to take it? Since I blew it by telling 
him you're here, I guess you have to."

Cliff took the instrument, and Steve punched the line button. "Hi, Jack! 
This is Cliff Fitzpatrick. What can we do for you?"

"I just saw on the Dow-Jones broad tape an announcement of your 
selection as the first American prime supplier to Kaga in Michigan. Is 
that true?"

"Yes, it is, Jack, I'm proud to say. We also developed a ring for them 
that seems to be on its way to becoming their new world standard. Of 
course, we get all the business on that we want and a royalty on the 
rest."

"But, Cliff!" Jack said, "I shouldn't say this, but their quality 
standards are light-years ahead of ours! And you *meet* them!?"

"No, Jack. We don't meet them, we exceed them! Based on information 
faxed to us today, we are now the top-quality supplier to Kaga USA. 
That, of course, is a field made up almost entirely of Japanese 
suppliers. I am delighted to tell you we are entering discussions at 
long distance about our ability to supply their domestic production. I 
don't expect much, honestly, but it's an honor to be considered. Then, 
of course, there is the very strong yen..."

Crowther had obviously been doing some fast thinking as Cliff spoke. 
When Cliff finished he said, "How soon could you ship trial quantities 
of rings and valves? I'm sure you still have the specs and everything."

"I'll have to check with our production people, Jack. How fast would you 
like to have them, when, and where?"

Crowther responded quickly, "Cliff, could you call me tomorrow with 
availability? I'll have the rest of the information for you then. And of 
course, I will need a price quote."

"We will be happy to quote, Jack. What quantities?" Crowther told him 
the quantities, and Steve saw Cliff's eyebrows raise. "Thanks, Jack. 
I'll call you in the morning." Cliff hung up the phone. "Steve, the 
*low* number he quoted for quantities was our old production number. The 
high number is *triple*!" The two men cheered and started dancing around 
the office. Betty came in to find out what had happened. When they told 
her, she joined the dance. Bill picked up the phone to call Bill 
Stevens. He asked Bill to get Max and join him in Steve's office. 
Moments later the two men arrived. As Cliff told him what had happened, 
Bill's eyes widened. When he told them the quantities, they both 
cheered.

Cliff said to Max, "I would like you to use our handy portable PA 
system, Max, and tell the guys what's happened. It's strictly your show. 
Without the quality those guys have been turning out, it couldn't have 
happened. Do you mind?"

"Mind? My God, this is the best news in weeks, and you want *me* to 
announce it? Not you or Sandy?"

"No, Max. This is yours. Bill, how soon could we add machines to double 
our capacity? And Max, I don't have to tell you this is a quality sell. 
Our quality can't slip... not the tiniest bit. What about people?"

Max beamed. "That's not a problem. Guaranteed. When can the machines be 
in?"

"Bill?" Cliff asked.

"I'll have to check with Micronics, but largely due to the way Sandy has 
been handling things, they honest-to-God love us! I don't know how long 
it will take, but I double-your- money-back guarantee you, no one - *no 
one* - could get them faster. What about the trial order? How soon, and 
how much?"

"I'll know tomorrow for sure, Bill. But you know Magna's trial 
quantities. What do you think?"

Bill looked at Max and held up five fingers. Max nodded. "I can have 
normal trial quantities in five days. The quality will blow them away. 
They have never seen stuff as good as they will be getting."

"Okay, guys. It's a deal. Bill, did you speak to Max about security? He 
and all the people need to know. Why don't you brief him, and he can add 
it to his speech?"

Bill quickly reviewed the short selling of Murphy stock and the fear 
that someone - about to lose a fortune - might stoop to industrial 
sabotage to prevent Murphy from performing on its contracts. He ended by 
saying, "Max, I think we have a real family here. The nice thing is 
everyone pretty well knows everyone else. You and your people will be 
alerted to the Pinkertons. You will know who they are. If anybody sees 
*anyone* he doesn't recognize - whether he's acting suspicious or not - 
we want the Pinkertons alerted."

Max laughed loudly. "What's that saying, 'Things that go around, come 
around?' The irony is wonderful. Pinkerton really grew as a company of 
strikebreakers one-hundred years ago or so. Now they are on our side. I 
think it's great! But you know what? I'm afraid it is one only a few of 
us old-timers will appreciate. Cliff, I'll do it! And, I don't need to 
tell you this, but I will anyway. It's our company, too."

Cliff went back to his office. Checking his watch he found it was nearly 
quitting time. Then he told the girls it was time to pack it in but 
didn't tell them about the talk with Crowther at Magna. As usual, they 
went out through the plant. His timing was perfect. Max was just about 
to start his speech, and Sandy stopped to listen.

They heard Max tell about the test order from Magna. "We got it, folks! 
We really got it! Now all we have to do is give them our usual product. 
Those turkeys will freak out when they see the quality we routinely ship 
to Kaga." He went on and ended by telling the workers about the chance 
of sabotage. He finished by saying, "Remember, those clowns are out to 
destroy *our jobs*! We know one another. You'll know the Pinkertons. 
Anyone else - and I mean *anyone else* - tell the Pinks. Any questions?"

There were a few, but the thing Cliff noticed immediately was they 
understood the threat to their jobs. The noises he heard were ugly. He 
wouldn't want to be a person found trying to tamper with the machines. 
They walked on out to the car, leaving Kelly's rental in the lot.

"Cliff," Sandy said sweetly, "You are a bastard. We hear we're back in 
at Magna - at up to triple the old volume - from our union president, 
for chrissakes! Just for that, you get the check tonight. We are 
celebrating with dinner and dancing. Kevin O'Rourke is joining us. I may 
- or may not - be speaking to you!"

Cliff just grinned and said nothing. They went to Kelly's hotel, and she 
checked in. He smiled at Sandy while they waited for her to wash up. 
Sandy tried to glare at him, but without great success. When Kelly 
returned to the car, Sandy was in his arms. "Golly, folks," Kelly said. 
"I hope I'm not interrupting anything."

Sandy stretched broadly and gave Cliff another kiss. "Nope. He wasn't 
very nice, so it's too early to go to bed with him. Are you all set? And 
are we corrupting your morals?"

"Corrupting, no. Jealous, yes. Let's go. Who is Kevin, by the way?"

"Kevin O'Rourke is a delightful guy. Of course, you'll have to talk to 
him in equations or hexadecimal language. I think that's what computers 
speak, isn't it Cliff?" Sandy asked. "Anyway, it's something like that. 
Maybe you can baffle him with some interesting regression equations on 
earnings growth or something," she finished airily.

"Sandra Donnell, I thought I liked you, but now the real you comes out. 
You are hateful! Just because you have captured a girl's dream is no 
reason to rub it in. I'll have to think about it for a while, but I'm 
pretty sure I am not speaking to you ever again. Or at least tonight. Or 
at least until we get to where we're going," Kelly said with the grin 
audible in her voice. When they arrived at another hotel, Kelly was 
surprised. "Why am I not staying here?" she asked.

"Because I thought as a young professional woman you would be interested 
in getting your rest. This place has rooms that are reputed to be noisy: 
the guests running from room to room and that sort of thing," Sandy 
replied.

"Now I *know* I hate you," Kelly said in a very flat voice. "You didn't 
mention that my hotel serves tea to maiden ladies at four-thirty every 
day. I missed it, by the way."

"Kelly, dear, I just wanted you to feel secure." Sandy replied.

Cliff was finding it was all he could do to try to keep a straight face 
as they went to the main dining room where a combo was playing. From the 
girls' banter, it was obvious they liked each other a great deal. Kevin 
was sitting at the table waiting for them, and he rose as they 
approached. Cliff heard Kelly say in a whisper to Sandy, "I don't care 
if he only speaks Gaelic! My God, where has he been all my life?" It 
hadn't occurred to Cliff that Kevin was also six feet three with 
brilliant blue eyes and very dark hair.

Kevin was introduced to Kelly and it was obvious he liked her 
immediately. "With a name like Kelly, there's got to be some Irish in 
your family, Miss Cameron," he said.

Kelly smiled at him warmly. "My mother's maiden name was Kelly. Indeed 
there is. I must get my interest in finance from my father who is a 
Scot, as I am sure you guessed."

The combo was playing, and Sandy and Cliff got up to allow the other two 
to become acquainted. Every time he held her in his arms on a dance 
floor Cliff was dazzled. She just seemed to float. He whispered in her 
ear, "A penny for your thoughts?"

"Darling, I am so happy, it's sinful. This was such a wonderful day! 
First, the South American orders, then Kelly, then Magna, and finally 
getting her together with Kevin. Would you care to bet they spend the 
night together? Unless Kevin's fifty times dumber than I think he is, of 
course. That girl is in love!" As she said it, she saw Kevin and Kelly 
on the dance floor together. Because of the height difference, even with 
high heels she scarcely reached above his chin. But the look on her face 
was one of rapture. "Mr. Fitzpatrick, you didn't respond. Do you care to 
lose some money? Ten dollars, perhaps?" She whispered up to his ear as 
she felt herself floating around the dance floor.

"Sandra Donnell, you are impossible! My meager fortune is tied up in 
this company, but you insist on having everything. If I end up working 
nights as a gigolo, just remember: it's all your fault!" he replied.

They went back to the table and their drinks. Kelly and Kevin joined 
them a few minutes later. Even Cliff, who was normally impervious to 
such things, could see the stars in both of their eyes. Without saying 
anything, he took out his wallet, folded up a ten-dollar bill and passed 
in under the table to Sandy. She took it and quietly smiled at him. 
"Thank you, dear," she whispered.

It was obvious Kelly had explained the short sale and its implications 
to Kevin. Cliff looked at the young analyst and said, "I assume that 
news of the Magna work will really cause problems for the short sellers. 
Am I right?"

"You certainly are," Kelly replied. "In the vernacular, they're in deep 
shit! As usual, the rule of the day is 'bulls make money, and bears make 
money, and pigs get slaughtered!' Nevertheless, I'm sorry we didn't buy 
even more than we did. By the way, Sandy, with all that garbage we were 
fooling with this afternoon, I forgot a basic question. I have been 
assuming you want the stock you buy in street name, that is, the 
registered owner will be Snyder Securities?"

Sandy let out a little yelp. "Good grief, yes! Absolutely! I have a 
feeling... Cliff, if I had to bet money, I would bet it's Ezra Stiles 
who's behind all this. Incidentally, Kelly, I will make arrangements to 
transfer all my holdings at the other broker to you tomorrow. There's 
just one thing: On September 30, I'll need something very official from 
Snyder Securities saying I am the beneficial owner of X–thousand shares 
of Murphy Manufac turing."

"Sandy, I have a question," Kevin asked. "How big a percentage of the 
company are you going to inherit?"

"About 66 percent. Why?" she answered.

"What's the percentage to change the bylaws of the corporation? To call 
a special election, or to change the term of directors?" Kevin 
continued.

"I can answer that!" Cliff interjected. "Before I became... familiar... 
with Sandy I read that stuff. It's two-thirds."

"That's sixty-six and two-thirds," Kelly said, excited now. "Sandy, you 
said you bought stock off and on in the past. How much do you have?"

"I'm not sure. About seventy- or eighty-thousand shares. Something 
between seventy and eighty, I'm sure. Why?"

"Bingo! We've won already," Kelly said elatedly, "And those turkeys 
don't know it. Your other shares are in street name, Sandy?" she asked.

"Yes, but I don't understand... Oh, yes I do! If it's only 70,000 shares 
- and I'm sure it's more - that's seven percentage points! Along with 
the family's sixty-six, that's 73 percent! My God! Cliff, you will 
support me, won't you?"

"Only if you give me my ten bucks back," he replied loftily.

She reached in her purse and took out his ten-dollar bill and handed it 
to him. It was all she could do to keep from laughing. Nevertheless, 
Cliff kept a straight face. "Since you asked so nicely, the answer is 
yes."

Kelly looked puzzled. "What is the ten dollars for?" she asked.

"Oh... nothing!" they replied together. Then they started laughing. 
Their laughter grew in intensity to the point they ended hugging each 
other to keep from falling off their chairs. Kelly and Kevin looked at 
each other and then looked at the other two. They didn't understand a 
thing.

Sandy regained control and said, "So it's over?"

"I really think so," Kelly replied. "What I heard from Cliff is your 
attorney, Stiles, may be trying to pull a fast one. Didn't I hear 
something about Cliff having performance targets to reach?"

"You sure did... or at least, you could have. They exist, and it doesn't 
look like there is a snowball's chance in hell of reaching them. 
Although the way things are going, we might reach them a couple of 
months after the deadline. But why do you ask?"

"Cliff, as a schemer, you're a great business strategist," Kelly 
replied. "Let's say I'm shorting the stock. It starts to rise on the 
basis of a complete operations turnaround. Then the word gets out that 
the guy who made it all happen is out and some of the turkeys who caused 
the problems in the first place are back in. What does the stock do?"

"Yeah, I know: three guesses, and the first two don't count. It goes in 
the tank. But what can we do?" he asked.

Kelly smiled at Cliff affectionately. "It's a damn good thing you are 
going to have a very smart wife. Just remember to do what she tells you. 
Cliff, with 70 percent of the stock, you can do anything! For example, 
you can call a special meeting of stockholders to elect all the 
directors. Does Murphy have staggered terms for directors, by the way?"

"Yes," Cliff answered, "it does. As a matter of fact, it's over a 
four-year span. Only 25 percent of the board is up for election each 
year. In fact, the numbers are two, one, two, and two."

"We're there! That's it, I'm sure. Sandy, even if you wanted to use the 
family shares to throw out the Board, it would take four years to do it, 
and three years to get a simple majority. *But* with 70 percent, you're 
there!"

"Of course!" Sandy picked up, "I can call a special meeting of the Board 
to consider bylaw revisions, and use my 70 percent to waive notice of 
the meeting. I then use it to amend the bylaws to have all directors 
serve one-year terms. Then I call for a special election of directors, 
and replace them all!"

Kelly stuck out her hand. "I love a smart woman! Damn it, Sandy, this 
smells right! One more thing: Do you know how a corner on a stock works? 
Or should?"

Sandy's face fell. "I have no idea. How does it work?"

"Let's look at the Murphy situation because the numbers are so easy: 
First, let's say you own 78 percent of the stock - that's 780,000 
shares. Now, there are two kinds of shorts: The first are the ones who 
sold Murphy, rented stock from an owner - usually an institution or a 
brokerage firm - and delivered the rented stock to the buyer. He must 
replace the borrowed stock. The second type is what it looks like we're 
seeing now. These are people who put in sell orders assuming they can 
borrow shares to deliver. But we are already pretty sure that the total 
number of shares sold exceeds the total number of shares outside the 
family holdings. Murphy will almost certainly be in that position in a 
day or so if things don't change. They can't deliver. It's numerically 
impossible!

"Now here's where the fun begins. It's really the same in both cases. 
The short seller must deliver shares to the buyer or to the owner from 
whom they were borrowed *or the value of the shares*. We have some free 
shares - more than you need for your control positions. We can sell 
those shares *at any price*. And the price at which we sell becomes the 
market. We have the only shares available to anyone at any price. The 
price we set becomes the settlement price for those who need to settle 
their positions in cash.

"Sandy, you *never* sell your stock to the shorts. You ransom their 
position. In other words, instead of selling them enough stock to cover 
their position, you get a huge price from them to repay their lenders. 
The important thing is to *never* let the shorts actually get their 
hands on the shares. They must go from you to the lender: the one who 
loaned shares to the short to deliver against his original sale. 
Understand?"

"Of course! If the short has the shares, for even a couple of hours, he 
can use them for their votes. And what you're saying, Kelly, is a burned 
lender is unlikely to make the shares available to the same person 
again. Right?"

"Absolutely!"



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