6.
Sold for a Song
On a cold Thursday morning, with January rains slashing across office windows which overlooked the intersection of Jackson and Battery streets in San Francisco—or that was how Lily Dehn would remember the moment—Howard Spence summoned the members of the Programming Resources Department to a conference room.
Dehn looked around and realized that she recognized less than half of those faces from shared projects and group assignments. Either a lot of new people had come into the company recently, or she had spent too long in the purgatory of the reserve pool.
When he had finished counting heads—going a second time around the room, because some of department members were standing along the walls—Spence closed the door and moved to the head of the conference table. He did not sit down. Instead, he took a folded paper out of his pants back pocket.
“Is it eleven o’clock yet?” he asked, looking around at the clock behind his head. “Senior management wanted us to be very specific about the time.”
Dehn saw that the clock hands stood at 10:59. Howard Spence actually waited out the last fourteen seconds to the top of the hour, and Dehn found herself mentally counting down along with everyone else. It was like being back in high school in a boring class.
“All right then,” he said. “There was an embargo on this announcement that we had to honor. Right now, our chief executives, Miz Porter and Doctor Benson, are holding a press conference to announce that the company has been bought out.”
Any room with more than twenty people in it usually made some kind of ambient sound: creaking chairs, rustling clothing, transient whispers, the occasional cough. Lily Dehn was suddenly aware that the only sound came from outside, the whiplash of gusting rain against glass.
“This is a relatively fast acquisition,” Spence said. He consulted his notes. “The initial contact came to management’s attention within the last three days, under terms of the strictest confidentiality—”
“Bullshit!” hissed the man next to Dehn, whose name she remembered as Jeremy Something. “The Securities and Exchange Commission would never allow that,” he muttered.
“Well, it appears, Mister Stachowski, that they did and have,” Spence replied to the man, even though the comment had not been heard by the room at large.
“Normally,” Spence went on, “companies and/or investors who want to acquire a controlling interest in shares of a publicly held corporation have to make their intentions known after reaching some threshold amount—” He glanced at the notes again. “—fifteen percent in the State of Delaware, where Pinocchio, Inc., is registered. They can proceed with the takeover only if the Board of Directors or two-thirds of the holders of outstanding shares approve the buyout. And then they usually offer what’s called a ‘buyout premium’ for the rest of the stock.”
“That’s my point,” Stachowski said. “So?”
“So, in this case the purchase was engineered by a consortium of shareholders in some of the largest makers of artificial intelligence and industrial automata,” Spence replied. “Kukla Robotics, ECOlogic, Futura Group, Bitmania, FemtoSystems … the list goes on. These investors have recently formed a new company, called Maxxo Scientific, and pooled their own Pinocchio shares in the startup.”
“That’s anti-competitive,” a young woman down the table said. “Won’t the Federal Trade Commission have a say in all this?”
“Yes … in normal circumstances.” Another look at his notes. “Under the Hart-Scott-Rudino Act, there’s a filing notice, a thirty-day waiting period, and then a decision by either the FTC or the DOJ to perform an antitrust review. But our, uh, Legal Department has offered the opinion that, based on the fact that the amounts of stock held in any of these other companies do not constitute a controlling interest, and since Maxxo has not made any other acquisitions to date, Hart-Scott-Rudino does not, uh, apply.”
“So Pinocchio just disappears?” someone else asked.
“Not at all,” Spence replied. “Porter and Benson have assured all division heads that operations will continue largely unchanged.”
“For the moment,” Stachowski muttered.
“But we’ll have to buy new T-shirts,” said another woman.
This drew a titter of laughter from around the room.
“She’s a Maxxo gal,” someone else announced.
“Who, exactly, will be in charge?” asked Bob Vordermann—one of the software engineers Dehn could identify—from the far end of the table.
“Miz Porter and Doctor Benson will remain in their current positions,” Spence said. “As will all division and department heads.”
“So your job is secure,” Stachowski whispered.
“Taking orders from a Ouija Board,” whispered someone on Dehn’s other side.
“It’s all done with computers, don’tcha know?” answered the T-shirt woman.
“That’s all we have at the present,” Spence said, obviously intending to wrap up the meeting. “We just wanted to make sure that you weren’t concerned when you saw all this on the news.”
“And now we’re in the know,” Stachowski said aloud.
“Yeah, but know what, exactly?” T-shirt woman asked.
Her question got lost in the general exodus from the room.