To all:
In the interest of maximum intellectual and literary freedom let me posit the following purely hypothetical scenario.
Let's envision a situation where a certain sell-side analyst is affiliated with a certain high-profile investment banker. This investment banker, let's call him Milkbone, has a long-duration relationship with a certain high profile telecommunication concern headquartered in a certain north European country, let's call the company Jerkysson. Milkbone is such a smart banker that he is able to induce a major U.S. wirehouse to pay a huge bounty to hire him and his entire staff of cohorts and (supposedly independent) sell-side analysts. Having cashed the check, its time to deliver the goods.
Now let's suppose that our north European telecom company has a rather thorny problem. The prick in its side is a little company headquartered in San Diego that has developed and commercialized a technology that obsoletes a significant component of Jerkysson's business. Although Jerkysson's management could have simply licensed the San Diego company's technology, it found the concept unpalatable. Instead Jerkysson chose to fight the new technology at every turn; lying about the comparative advantages; lying to its customers; lying to its investors and lying to governments...but, here's the catch, telling the truth to its investment bankers. You see, Jerkysson needs a contingency plan; its needs a fallback position in case that darn little San Diego company actually pulls off the coup.
Jerkysson management calls up Milkbone and tells him, "you need to keep that lousy little San Diego company in a box...just in case we need to buy it." Milkbone knows what to do. Milkbone has a pet analyst on staff who has, shall we say, a rather fungible ethical framework. Milkbone asks Jerkysson's management to give him ammunition, "tell us HOW to undermine that damn little San Diego company." Jerkysson management is only too happy to oblige. "Competition will eviserate the San Diego company's handset business" opines Jerkysson. Never mind the fact that the San Diego company collects royalties from all competitors and sells sophisticated and highly profitable ASICs to most. Nevermind, "the ASIC business will lose marketshare" explains Jerkysson. Actually this is a reasonable assertion...if you have 100% marketshare and a competitor sells one chip, you lose marketshare regardless of the fact that the business remains very healthy and very profitable. Jerkysson management snidely confides that "investors are stupid and superficial in their analysis, so the details do not matter." Then Jerkysson launches its big missile amidships, "tell the world we have ALSO invented the same technology, that ours is better and that our version is MORE COMPATIBLE with existing networks." A powerful claim were it true. Understand, of course, that the truth is readily available. Any competent analyst could easily ascertain that Jerkysson's technology is no more compatible with legacy networks than the San Diego company's...but facts such as these would undermine the marketing campaign.
Milkbone instructs his minion who faithfully mouths the Jerkysson party line....over and over and over. Truths are twisted; facts are distorted; reality is stretched beyond the limits of reason into the arena of outright falsehood. Nevermind...there is a banking fee to be had.
We are now approaching end game. Jerkysson's big customer in the land of the setting sun has figured out that Jerkysson has been telling whoppers. A big company from Jerkysson's home continent acquires a big American wireless company with the intent of delivering worldwide cellular services. Management of the big new company tell diligent investors that it would be prohibitively expensive to deploy 3G in great big 5mhz chunks, so W-CDMA looks pretty darn uneconomic to them. Since the big new company wants to deliver high data rate services AND it wants to be compatible with the very large U.S. market, it tells its vendor (Jerkysson) that is must find a way to work with that pesky San Diego company. Jerkysson's management is troubled; its customers are angry and its phantom "more compatible product" cannot do what it was represented to do. End game.
We are there. The cards are on the table. For those who know how to read; for those who have done their homework and researched the topic, the outcome is assured. For those who have listened to Milkbone and his minions, well I hope you are short.
Best regards,
GJP |
