No One Ever Told Us That: Money and Life Lessons for Young Adults

CHAPTER THREE

IF YOUR COMPANY IS BOUGHT BY ANOTHER

I have been through dozens of mergers over 50 years, many of them shotgun marriages, with a lot of the companies we acquired done at bargain prices because the sellers were in desperate straits. One of these companies was quite famous in the investment world: E. F. Hutton. It had a campaign with the tagline for all the ads, “When E. F. Hutton talks, people listen.” It was going broke. Right after the merger, my wife and I were going on a company trip. It was a relatively cheap junket, by Wall Street standards, to a resort in Florida in June, when all the tourist prices were slashed. On a chartered bus we sat with a bunch of former Hutton employees, all bitching and moaning about the stingy new owners. “Remember that great trip to Paris?” they would say. “No, Rome was much better, and also London: every night Michelin-starred restaurants.”

My wife said to me, “Rome, London, Paris? We never went anywhere like that.”

“They went broke,” I said. “They're like a defeated army.”

“Yeah,” she said, “but they went broke in style.”

Wall Street could always create products and sell them to the public for a fee. It could merchandise the goods. It could not run a business. Which is why so many great names on the Street turned to dust, and their names disappeared.

Almost always when you see the press stories surrounding every big merger, the two chief executive officers (CEOs) are pictured shaking hands, toasting, and celebrating the grand event. ...