Leverage in Death (In Death 47)

“It is, and there’s been chatter on it. Pearson’s son runs the London offices—and a bit of chatter came from there. His daughter left for Rome last week, another of Quantum’s HQs. All the BOD who aren’t based in New York traveled to New York last week. And the word has been the deal would be formalized today. With some window dressing first with a reveal of the marketing campaign this morning.”

“So, okay, your average Joe wouldn’t know, or at least couldn’t know the ins and outs, but somebody in the same business or someone within the two companies would.”

“Certainly. They’ve leaked enough to the media in the last few weeks so today’s formality was expected. But they held back details so they could do the splash. If Karson lives, and I hope she does—or if she dies—the deal should still go through. Unless her and Pearson’s heirs are idiots, all the reasons to merge remain in place. The negotiations are done, the deal is done but for the formal signing.”

“So why the hell blow it up? It doesn’t make sense to do all of this just to kill Rogan, or Pearson, when a shiv in the throat in a dark alley’s quicker and easier.”

“I agree. And if your conclusion is this wasn’t about killing any individual, I agree.”

“What’s the point then?” she demanded. “What’s the goal if blowing up the meeting doesn’t stop the merger anyway?”

“To disrupt,” he told her. “And in a big way, a media-frenzy way, a business way. What do people think of, instantly, when a suicide vest and bombs are employed?”

“Terrorism.”

“And what happens when terrorism is involved?”

“Panic.”

“Exactly. Not only people panic, the markets panic. And in this case, Quantum Air and EconoLift are at the front and center of the attack. Due to that, the stocks of both companies took a deep dive this morning in trading.”

“So they’re worth less than they were yesterday.”

“Considerably less than they were before nine this morning, as panic drives people to sell, and once the stocks inch down, that rolls on with a kind of groupthink, and more sell. And those who play on the margins will find their shares sold out if they fall too far over the next couple of days.”

She’d followed him, more or less, but now held up a hand. “I don’t know what that means.”

“It means those who use loans for part of the buy, hoping to maximize profit while risking more loss. Simply, they buy ten dollars’ worth of stock, but borrow five, only having five of their own to invest. If the stock goes up to fifteen, they see a hundred percent profit. If it tanks, you’ll likely have a margin call, lose your investment, what you borrowed, and the interest and fees attached to the loan.”

“It seems like a stupid way to do business.”

“Playing in the margins is a gamble,” he acknowledged. “But can lead to profit. And you can use margins to create leverage.”

“Like an advantage?”

“It can be. In this case, leverage is taking on debt.”

Now she wanted to pull at her hair. “Who wants to take on debt? People want to get out of debt.”

“You take on debt to make profit.” He all but saw her eyes glaze, had to smile. “It’s why loan companies exist—taking on debt to make profit. Investors, serious ones, look at a company’s leverage, do an analysis. At this time, after the bombing, investors—those who either aren’t serious or simply panic—sell off rather than hold and wait.”

“People dump the stocks so the price goes down. More people see the price going down, and they dump. That doesn’t benefit the heirs, or anybody holding the stocks.” She frowned at the board. “So what’s the point?”

“What people sell, others buy. In a matter of hours stocks that were worth—to keep it simple again—a hundred a share are now selling for fifty. Buy them at fifty, wait until the dust settles and the merger goes through, sell them at a hundred, or likely more.”

“If it doesn’t go through, you’ve lost fifty bucks—more if you worked the margin. Right?”

“True enough, but it will go through. I’d wager quite a few representatives from both companies will issue statements either by end of business today or first thing in the morning stating just that. Someone taking advantage of this window—someone expecting this window to, let’s say, blow open? They’ll make a pretty pile in a short time.”

She shoved up. “All of this?” She swung a hand at the board. “To play the fucking stock market?”

“All of this, if this was the goal, to make a considerable amount of money in a short amount of time.”

“How much? Ballpark it.”

“I can’t say how much these people had to invest, but it’s a deep dive indeed. The sort where, say, a hundred thousand as a stake might turn intoa million or more, and in the margin, considerably more.”

“So we need to pursue the angle of investors. Look for people who plunked down investments when the stock took that dive.”