Street 18
OngoingStreet 18
As Ha Si-heon feared, the situation was changing. This was due to the report Jeff made earlier that morning. Concerned by Rhino's hypersensitivity, Pierce instructed Jeff to investigate, and these were the results.
"Recently, Rhino's performance has noticeably improved. On the surface, it's due to the revival of the biopharmaceutical market, but…"
Pierce waved his hand, signaling for him to get to the point.
"The percentage of IPOs among small to medium-sized companies is unusually high. Each has only one product line in development, and none are in a position to issue additional bonds."
Pierce's eyes sparkled. Companies developing a single product have no revenue yet. To generate revenue, they need to invest more cash to complete development. For such clients, investment banks usually suggest two options:
One, an IPO (Initial Public Offering), which involves raising funds by selling stocks to the public on the exchange.
Two, M&A (Merger & Acquisition), which entails selling the company to a major pharmaceutical firm.
"But they all proceeded with IPOs?"
"Yes. Despite their high-risk profile, they bypassed our department."
"They were steered that way."
"Indeed."
The healthcare department manages biopharmaceutical clients. It was clear that Rhino had steered clients toward IPOs. The reason was obvious: if the client wanted M&A, they'd have to work with the M&A department. Rather than share performance results with Pierce, Rhino likely wanted exclusive credit.
"That can't be the end of it."
"Sorry?"
"This kind of competition is routine, isn't it?"
Such competition is commonplace in investment banking. However, Rhino was more sensitive than usual. Something sparked in Pierce's mind as he pondered.
"Look into the IPO subscriptions."
When stocks are first listed on the exchange, they must go through a subscription phase. If buyers don't appear at the moment of listing, the stock price will plummet. Therefore, they recruit investors in advance and allocate shares accordingly.
All of the deals Rhino pushed had high demand for IPO subscriptions, even though they were ambiguous companies with no revenue and a single product still in development.
"Check if there was any outside intervention."
"You don't mean…"
Jeff immediately went out to investigate and returned an hour later, confirming Pierce's suspicion.
"It appears to be an 'axe.'"
In the industry, a deal that is heavily backed by the top levels of Goldman is called an 'axe.' Like chopping wood with an axe, orders from above mandate that the deal must be pushed through one way or another. When designated as an axe, every department responsible for sales is instructed to actively recommend the deal to clients.
The success rate was bound to be high.
"Now it all makes sense."
A sense of relief appeared on Pierce's face. There's only one entity that can designate a deal as an "axe": the Executive Committee. It's a group of 18 executives that make key decisions at Goldman.
"They must really not like me…."
In half a year, one of the executives would be retiring, leaving a vacancy on the committee. There were two candidates to fill that seat: Rhino and Pierce. Based on performance, Pierce was virtually the confirmed choice, but some or even all of the current committee members were actively backing Rhino.
"Why on earth…?"
Why…?
"They'd prefer someone who's compliant."
Pierce was already known for his combative personality. If such a figure entered the Executive Committee solely based on merit, it was inevitable he'd clash with others on various issues. But if they pushed an unqualified second choice? Owing a debt, he would be easier to control.
"What if they back him for half a year?"
"That could be risky."
"I can't just sit idly by, then."
After a moment of contemplation, Pierce made a decision.
"Postpone the staffing meeting."
Jeff immediately nodded. "I'll cancel it altogether."
It wasn't the time to be engaging in a casual wager when the executive seat could be slipping away. But then, Pierce said something unexpected.
"Why would we cancel it?"
"Sorry?"
"It's our best weapon, isn't it?"
"What do you mean…?"
While Jeff looked puzzled, Pierce's eyes gleamed, and a wide smile spread across his face.
"This wager, we should use it."
***
4:00 p.m.
Finally, the meeting time arrived. Everyone at Goldman knew about my competition with Brent, but the exact format of the challenge was being revealed for the first time here.
"In two days, you'll both pitch to a client. Each of you is to create a teaser featuring 10 stocks. The one who gets more selections from the client wins."
The rules of this game were simple. Brent and I would each present 10 investment ideas to the client. The one who received more selections from the client would win.
"We're expected to do it all ourselves, from scratch?"
"It's a contest of skill, isn't it?"
Brent wasn't asking because he didn't know; he just needed to double-check due to how unusual this was. It's rare for low-level employees like us to choose stocks. Typically, the MD picks the stocks, and we decorate the MD's selections with footnotes and reverse engineering.
For this wager, they were granting us an enormous exception.
"In this case, the client becomes crucial."
In this game, the side that wins more client picks wins. Since each client prefers different types of deals, knowing the client's preferences is essential. Surprisingly, Pierce brought an unexpected client.
"This time, the client is Stevian Capital, a hedge fund that invests in various areas."
The primary clients in the investment banking division are usually corporations, but he specifically invited a hedge fund. Hedge funds and corporations have different preferences. For instance, hedge funds aren't interested in long-term investments for the company's future. They favor short-term profit trades that allow them to enter and exit within a few months.
'Was this his way of being considerate?'
If he had brought in an ordinary company, it would have favored Brent, who often dealt with such clients. Perhaps he chose a client unfamiliar to both sides to create a fair competition environment.
"Any questions?"
"I'd like to know the fund's tendencies. Is it more long-term or short-term…?"
Brent was diligently asking questions: about the client's available liquid capital, preferences, interests, and favorite types of investments. Then he asked this final question:
"Is this a client you've worked with before, Mr. Pierce?"
"I wouldn't make such a request to a client I don't know."
'…'
"A junior employee isn't likely to produce anything worthwhile, right? I'm taking the time to help you both out."
No client would actually invest based on recommendations from junior employees like us. Since there's no real benefit but only time involved, it's natural to make this request of a familiar client. Still, the atmosphere felt a bit strange.
Brent's expression soured, and Pierce smirked as he looked at him.
"Don't worry. I'll make the selection fairly, based purely on the results."
"F…Fairly?"
"You're worried about a conflict of interest, aren't you?"
"N-No, not at all."
Brent denied it, but his face had turned pale.
'Conflict of interest…'
It wasn't entirely absurd. Pierce had bet on my victory, and a client familiar with Pierce was acting as the judge for this contest. With a single request, the client could favor me. However…
'Would he really go that far?'
Would he stoop to such a petty trick over a mere drinking bet? It didn't make sense, but the tension in the room was palpable. The atmosphere between Brent and Pierce was also tense.
'There's definitely something here.'
What matters on Wall Street? Liquidity. From the looks of it, the tide had shifted again. This wager was no longer a simple game.
"Then, Jeff will inform you of the schedule moving forward."
With those words, Pierce left the room. I left my things in the meeting room, pretending to head to the restroom, and hurried outside to check where Pierce was going.
'Just as I thought…'
He was heading to the elevator. Since he wasn't wearing a coat, it wasn't an external meeting. He must have business with another department within Goldman.
This could… either work to my disadvantage or advantage. There's only one thing to do now: stay sharp and wait.
***
10th floor, the trading floor.
The man who entered the restroom was startled to see an unexpected person inside.
"Pierce? What brings you here…?"
This entire floor is a trading floor. There are few reasons for Pierce from the investment banking division to be here.
"Why so surprised? Did I come somewhere I'm not supposed to?"
The man felt a twinge of guilt. He was an MD from the Equity Sales department, responsible for stock brokerage and had helped with Rhino's deals under orders from above.
"Well, it's just surprising. You're rarely around the office, aren't you?"
"I've had more free time lately."
"Haha, if you're free, the rest of us might as well starve."
"True. Why else would I be messing around with juniors?"
"Oh, you mean that wager."
The newbie's bet, risking his entire paycheck, was the talk among traders. While others treated it as an entertaining topic over drinks, this man couldn't. He had too much on his mind.
Why did Pierce set up the wager in the healthcare department, of all places? Could it really be just a coincidence?
'Could he have noticed something…?'
The support from higher-ups toward Rhino wasn't overt. They'd only slipped in one or two "axe" orders among many. Plus, all the orders came down under project names rather than MD names. Pierce, who had little interest in healthcare, wasn't supposed to notice, but now he wasn't so sure.
"Is healthcare particularly hot these days?"
"..."
"It just seems like you're handling a lot of orders in that sector recently, so I thought I'd ask."
'Damn.'
The man barely suppressed a curse. Pierce knew, after all. He wasn't sure how much, but it was clear Pierce was here to probe him.
"Well, that's just how it worked out. We can't always pick and choose the work we do, right?"
"Indeed."
"I'm just trying to stay on good terms with the higher-ups. In times like these, it's enough just to keep my head down."
As he tried to backpedal, the man subtly inserted his own excuse. Honestly, he felt a bit resentful; it wasn't like he'd cooperated because he wanted to support Rhino. Recently, Goldman had been undergoing major staff cuts. In times like these, refusing an order from the higher-ups was as good as losing your job. But such an excuse wouldn't be much help here.
'How do I get out of this…?'
It was still unclear who would become an executive, Rhino or Pierce. In the meantime, Pierce had found out about his support for Rhino. If Pierce did make it as an executive, he would certainly not forgive him. Pierce, if set on revenge, could issue orders that would only harm him in the future. But he couldn't undo what he'd already done.
As he was deep in thought, Pierce came closer and patted him on the shoulder.
"You're always too eager; that's your problem."
"What eagerness?"
"No need to be modest."
Pierce's grip on his shoulder tightened.
"When someone has a lot of drive, it shows. Some people, when asked to bring firewood, gather only small twigs. Others pick up an axe and chop down every tree in the vicinity."
"Take it easy, and mind your health while you work."
With that, Pierce's intention became clear: even if orders came down, he wanted the man to merely go through the motions, pretending to follow them half-heartedly. As long as he did that, there would be no retaliation.
"Phew…"
As the man sighed in relief, Pierce walked away with a satisfied smile on his face. He knew never to make an overt threat. If he pushed people too far, they might align themselves firmly with Rhino, fighting as if their lives depended on it.
What Pierce needed was for his collaborators to tread cautiously, afraid to wield an axe too aggressively. In that regard, this wager was a useful tool. Pierce spent some time moving around different departments, mentioning the wager in a similar manner. Such scenes always had witnesses, who faithfully spread word of what they'd seen.
"- Pierce was talking about the wager with the Sales MD… The atmosphere was a bit…"
This news reached the ears of the MDs in various departments. Many of them held strategy meetings with their most trusted VPs. They could deduce even more from the same information.
"Now it all makes sense."
"Yes, it seems Rhino moved first."
The MDs were closely observing Pierce's actions. Why was he trying to do business under the guise of a wager in healthcare, of all places? This seemed like a preemptive strike, yet they couldn't understand why Pierce, who was leading in performance, would need to attack Rhino.
Then, the final puzzle piece fell into place: the Sales department. Rhino had tried to surpass Pierce with the help of Sales. Pierce had noticed and was responding accordingly.
This situation also revealed another crucial piece of information.
"It looks like retirement is really happening this time."
"Next quarter, perhaps?"
The rumor of a vacancy on the Executive Committee had persisted for two years, kept alive by an executive's health issues. But now, the top two in performance were clashing. It was clear they were fighting for the spot before the executive change.
Rhino or Pierce—one of them would become an executive within six months and gain the power of the axe.
"What should we do?"
The task was obvious: they needed to pick a side. But which side?
"Pierce is at an advantage, but there's something unsettling."
"What do you mean?"
"Isn't it unusual for him to step into healthcare? If it's a performance battle, sticking to familiar territory would yield better numbers…"
"He's probably just trying to disrupt Rhino."
"Is that all there is to it…?"
Choosing the wrong side could lead to falling out of favor with an axe-wielding executive. Although the stakes were high, they lacked sufficient information to make a decision.
"Think the newbie knows anything?"
"They wouldn't share this kind of information with a mere junior…"
"At this point, we need every scrap of information. Approach him and find out."
So, the VPs from each department headed toward Ha Si-heon in unison. Naturally, Ha Si-heon had already sensed this shift in the air.
"This is getting interesting."
The situation was turning quite intriguing. Pierce was clearly using him, but this was the perfect opportunity to turn the tables and use him back. This type of game was right up his alley.
"Now's not the time to be too available."
When demand is high, limited supply raises one's value. Conveniently, it was dinner time. Ha Si-heon quietly slipped out. Tonight's dinner would be eaten out.
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Posted bymumei