Monday, October 09, 2006

Waves of Warning 09

Chapter Nine – Surfing the Street

[ PDF Format: 09-SurfingtheStreet.pdf ]

The sound of rushing water drowned out the ring of the phone. The
answering machine clicked on.

Hello, you have reached 714-797-1357. If you have this number, it must
be important, so please do leave us a message and we’ll call back soon.

“This is the international operator. I have a collect call from – sir will you
say your name, please?”


“I have a collect call from Roberto. Will you please accept the charges?
Hello, hello? I am sorry sir, but no one is answering. Pleased try your call
again later.”

“I can’t try again later! Cheryl! Pick up the phone!”

“Sir I cannot allow any communication – and could you please turn down
the noise in the background? I can barely hear you.”

“I can’t turn down the noise – those are engines and I’m in a seaplane!
Operator, this is an extremely important phone call. I own Wavelife
International and I simply must get through! Cheryl! Pick up the phone!”
“Sir I’m sorry but you’ll just have to call again later.”

“Listen, I’m in a plane in the South Pacific and we’ve only got a limited
radio connection right now and I’m calling my wife. I know she’ll pick up the
phone in a minute.”

Eight thousand miles away, Cheryl Corlund turned off the water and
stepped out of the steaming shower. She heard the voice on the answering
machine and ran across the bedroom floor holding the towel to her wet body.

“Sir, I’m sorry but - - -“

“Let me speak to your supervisor, please,” he said in a last ditch effort to
buy time. His wife lunged for the phone.

“- - - you’ll have to call again later. Thank you for using - -”

“Hello, operator, I’m here.”

“Operator, that’s my wife! Cheryl it’s me!”

“This is the international operator. I have a collect call from, uh, sir please
say your name again.”

“Roberto Mercante!” he yelled. If there was one thing that ticked him off,
it was when people forgot his name.

“Will you accept the charges?”

“Yes. Roberto, where are you?”

“You may proceed with your call, sir. Thank you for using TransCom

“We found it! It is so beautiful you just won’t believe it!”

“Why didn’t you call on time? I tried your cell and then I tried the hotel.
You were supposed to call me hours ago.”

“I couldn’t call! We were out at the reef, and it took us four hours to fly
there and - - -“

“Four hours! Roberto, you can almost fly back to Hawai’i in four hours!”

“Not if you are in a PBY! Oh and wait till you see this plane! We’ve got
to get one!”

“We’re not getting a plane, Roberto. We’ll be lucky if we get a bonus this
year. And what is a PBY?”

“It’s a seaplane, and we flew from Tahiti out into the Pacific and we were
only eighty feet above the ocean the whole way, well, except for when we had
to fly higher so that we wouldn’t hit any islands. But that was ok because - -”

“Hitting islands? Roberto, what the hell are you doing?”

“You told me to work with Clark and that’s what I’m doing! Now listen
for a second, ok? He chartered a seaplane for us - - -”

“How much did that cost?”

“They gave us a deal, and it wasn’t that much money because we needed
this plane to get to the reef. It can land on water so we had to have it and - - -”

“How much, Roberto, and don’t lie.”

“Ten thousand, plus some extra costs, but honey, we had to - - -”

“You and Clark spent ten thousand dollars,” she let a moment of silence
pass, “Roberto, I don’t like this.”

“This place is magic, Cheryl, and it was worth it, even though I got really
airsick. And anyway, you said it had to come out of my budget, so I’ll worry
about the money, ok?”

She knew he was right. Ten grand for a plane flight was peanuts compared
to the real stakes involved, and so for the moment she decided she didn’t want
to think about money.

“Well, I’m sorry you got sick. Are you okay now?”

“Yeah I’m much better. How are the children?”

“I suppose they’re fine. Donny stayed over at a friend’s house last night
and Anna is downstairs, I think. They’re okay, Roberto.” Light began to glow
through the curtains, reminding her she had to get back to business. She had an
early conference call to New York and had to get out the door.

“Roberto, I’ve got to go in two minutes. Is it what you expected? Is it
what we need?”

“Yes and yes,” he said, hearing the urgent tone in her voice, “It looked
exactly like the video, except the waves were about three feet, but they were
absolutely perfect.”

“Then it wasn’t exactly what we saw, was it?”

“Well, uh, no, but,” Roberto knew he was running out of time, “but we
taxied around the reef and went snorkeling and the bottom is perfectly smooth
and goes down into the water forever. When a swell comes it will be
unbelievably good.”

“Roberto, we’re betting our future on it. Anything else I need to know?
I’ve got exactly one minute.”

“I talked to the pilots and told them what we will need and they said they
can do it. A Catalina PBY is the only way we can get everything to this place
without a lot of hassle. They are really great people. Right now we’re headed
north to catch some tail winds back to Tahiti and - -”

“Roberto, call me when you get to Tahiti. Love you. Bye.”

“- - - and we’re flying in the moonlight and it is so beautiful and, Cheryl,
are you there? Hello, hello?”

Roberto turned to Tina Sanchez. “Did something happen to the radio?”

“No, the connection’s ok. She must have hung up. Was that your wife?”
she asked inquisitively. She knew full well it was, but she wasn’t going to let
all the flirting that afternoon go for nothing. Roberto took off his headset and
looked at her bathed in the moonlight coming through the Plexiglas domes.

“Yeah, that was my wife,” he said with just a hint of resignation, “also
known as the CEO of Wavelife International. She’s really busy right now
getting things organized for this project.”

“Well, I hope to meet her someday,” she said with a bit of a huff.

“You will for sure, Tina,” said Ian Clark, amused at the vibe between her
and Mercante, “or maybe give her a call when we get back. How much longer
before we arrive?”

Sanchez caught Clark’s comment and looked right through him.

“Shouldn’t be too much longer. Now that I think of it, why don’t we just
cancel the extra charges, Roberto? Our original arrangement with Ian will be

“Thanks. The boss will appreciate that,” said Mercante with a smile that
was returned with a little extra thrown in.

“Isn’t it beautiful flying like this? Oh, look! That’s the Nebula
Archipelago down there.”

She turned and looked over her shoulder and brushed against Mercante’s

“I wonder what kind of surf you could find on those islands, Roberto?”

Mercante looked down and saw islands surrounded by reefs as far as the
eye could see. He looked up a little and the moonlight had caught a reflection
in the Plexiglas of the Polynesian beauty sitting next to him. The vision
clicked, and Mercante took note of it for his next meeting with marketing.

“Yeah, maybe we could fly around and check ‘em out sometime, Tina!
Yeah, What do you think Ian? Maybe there’s even more spots down there!”

“Well, let’s just get our original deal done first, and then we’ll think about
new places, ok?”

* * *

“Hello Bill, everybody there?”

“Yes, Cheryl, but let me warn you: the market is skittish this morning and
they’re a bit distracted.”

“I know about the market. That will work in our favor. They’ll be itching
to make some money.”

“They’re ready when you are.”

“Three minutes.”

Cheryl Corlund clicked off the intercom and walked into her private
ladies’ room to check her hair and makeup. She did not want to appear flushed
on camera, and the video conferencing images were sometimes a bit colorsaturated.
She straightened her Italian business suit and was satisfied she had
the look for dealing with Wall Street. She came out and walked briskly to the
door of her office, grabbing a slim portfolio off her desk on the way. She went
past the desk of Dolly Artensa, her executive assistant, without stopping.
Artensa was Corlund’s senior by almost ten years and had been with her since
the beginning. Both knew this was no time for chitchat. Except for one thing.
Halfway across the carpet Cheryl Corlund stopped and turned around.

Artensa was impeccably dressed in shades of yellow that contrasted perfectly
with her deep brown skin. She took off her glasses and looked Corlund up and
down. She smiled, reached into her desk, and tossed a heavy, carpenter’s nail
across the room.

Cheryl caught the nail with one hand. Without another word or glance,
she left the office ready to pitch a deal worth a billion dollars.

Bill Massara and June Wilson were in the room. Their video images were
in small windows on the plasma display. There were five larger windows on
the screen. Four of them displayed heavy hitters sitting in their offices on Wall
Street. Then Cheryl Corlund took her seat and the display was complete.

Her camera angle and lighting had been set up for a perfect shot of a
powerful businesswoman. She set the portfolio down so that the camera could
not see it. She opened it to glance at Wavelife’s share price at the opening bell,
the numbers already traded, and the current worth of her company.

“Good morning June, Bill, gentlemen. Thank you all for your time. I’ll be
brief and to the point.”

She put a hand in one pocket of her business suit and touched the point of
the nail. Not a trace of emotion could be seen in her face.

“Given Wavelife’s current valuation on the market and my responsibilities
to our shareholders, I will be submitting a proposal to the company’s board
whereby my management team will execute a leveraged buyout of the
company’s stock. I need to know if any of you would like to be a part of such
a transaction. Gentlemen?”

“Hello Cheryl!” boomed Ben Jeffries, one of Wall Street’s most famous
dealmakers, “Good to see you, though it has not been so good to see
Wavelife’s stock performance lately. The tide’s gone out on the surfing angle,
and you’re looking for investors in an LBO?”

Corlund smiled back at Jeffries. His slicked-back hair, bow tie and
suspenders were almost a cliché, except for the fact that his power was very
real. But she didn’t say a word because she knew she didn’t have to.

“And your point is, Ben?” said Bill Massara, his wire-rim glasses set
against a broad face and a buzz cut. He knew when to step in front of his boss
and take a bullet.

“His point is, Mr. Massara, that your price has been heading south and I
don’t think it will be getting much of a tan this winter,” said Peter Lasserman,
a street-smart New Yorker who headed a firm that often competed with
Jeffries, sometimes ruthlessly. But they were actually good friends, belonged
to the same country club, and their wives supported the same charities.

“Yes, Cheryl, I must say, an LBO does seem a bit optimistic, wouldn’t
you think?” John Vutara, also a friendly competitor of Jeffries, was known for
his careful attention to even the most insignificant of details when it came to
underwriting investment banking deals . He was born in India, schooled at
Oxford, and wore the pinstripes of Saville Row. His proper British accent
added to his authority. “I know you surfers like to, how do you say, ‘go for it’,
but aren’t you risking a, and no pun intended, wipeout here?”

“I don’t surf, John,” shot back Corlund, letting the statement hang in the
air until June Wilson caught her cue.

“Yes, John, don’t be short-sighted,” she said, wearing a gray suit to
contrast with Corlund’s fashion statement, though at three grand hers was
slightly more expensive, “We have our sights set on next summer. That’s why
we are talking to you now. Apparel is a cyclical industry, the wheel is going to
turn this summer, and Cheryl’s going to turn it. You gentlemen have a ground
floor opportunity here. By underwriting a buyout of Wavelife’s shareholders,
you’ll be in a position to do quite well a year from today.”

“Which will be the height of your selling season going into the fall shows.
But still, the timing is a little tight, and with profit margins so razor thin in
your segment, there’s no room for even the slightest error.” Bruce Kaufman
wore a polo shirt to set him apart from the other investment bankers because
he wasn’t pals with them by any means. He knew the only reason he was there
was because he had outperformed them three quarters in a row.

Cheryl Corlund knew her response had to be airtight since Kaufman
obviously didn’t care about the stock or the shareholders.

“Point taken Bruce, and that is why I’m doing this. We have assets under
development we believe may be of significant value to the company.
However, to take advantage of them and increase profitability we need a new
management structure to execute efficiently.”

Massara and Wilson looked straight into the camera’s eye. This was no
time to break ranks with even a hint of anything other than full commitment to
Corlund’s words.

“What, you’re gonna bring Gidget out of retirement?” said Jeffries, and
everybody laughed.

“No Ben, she’s happy being the legendary Gidget, no more no less.
Actually, I was thinking of opening a surf shop in New York and teaching you
guys to surf the Street!” said Corlund, sugar-coating her sarcasm with just the
right amount of charm.

Everyone laughed again, though with a brevity that made it obvious there
would be no more jokes.

“How much are you going to pay?”

“Twenty-two a share, Ben,” said Wilson.

“But, but that’s almost eighty percent over your current price!” exclaimed
Lasserman. John Vutara was also obviously taken aback. Bruce Kaufman,
however, didn’t blink. The fact the stock was undervalued was moot to him.

“Well, Peter, that is what the shareholders deserve and it will keep them
quiet next year when Wavelife will be worth a lot more than it is now.”

“If you’re right about everything, Cheryl. What is your board going to say
about all this?” asked Kaufman, “And when can I see your numbers?”

“They’ll agree that it is in the best interests of the shareholders. I’ll be in
New York mid January. I’ll have complete data sets with me at that time.”

“My dear lady,” said Vutara, looking her straight in the eye, “Why are you
doing this?”

Corlund was well prepared for this moment of truth.

“I need to be able to respond to a changing marketplace without the
constraints of a stock that is performing poorly because of outside factors over
which I have no control. With a new business plan and a fresh marketing
approach, we anticipate a return on your investment up to twenty basis points
above any valuation as represented by Wavelife’s share price within the past
five years. We have an all-star cast and a dynamite script and the curtain will
be going up next summer. You can either be backstage or in the audience.”

“Well,” said Jeffries, “My wife is always dragging me to premieres on
Broadway, and I don’t need any more front row tickets. Count me in.”

“Thanks Ben,” said Corlund, consciously not letting her excitement show,

“John? Bruce? Peter? What else can I tell you?”

“Nothing for the time being,” said Lasserman, taking his cue from
Jeffries, “I’m in.”

“I’ll look forward to your visit, Cheryl,” said Vutara, “and my team will
be prepared to look at your numbers when you present them to us.”

“I’ll see you when you get here,” said a non-committal Bruce Kaufman.

“Say Cheryl, can you bring my grandkids some swag? They’ve got that
surfer stuff all over their rooms!”

“Will do, Ben. Bruce, John, it has been a pleasure. Peter, say hi to your
wife for me.”

“No can do, Cheryl. If I even mention your name, she starts in on why
New York sucks and we should move to Newport Beach!” Lasserman said
with a laugh instantly shared by Corlund.

“Yeah, Peter, she always told me she hated snow with a passion, even on
ski trips. Gentlemen, the best of holidays to you, and I’m confident it will be a
happy new year.”

Everyone said their goodbyes . Then the video displays went to blue
before the Wavelife logo appeared dead center.

Corlund sat down and took a deep breath to suppress the rush of victory
pumping through her veins. Massara and Wilson waited for her to speak. She
looked at them but was thinking of her husband and Ian Clark, flying in the
moonlight high above islands of paradise thousands of miles away. Then she
flipped the moment around completely just to prove she had mastered it.

“You know, if this doesn’t work, we’ll have to go into exile someplace.
How does Tahiti sound?”

“Well, it would be better than Siberia!” laughed Wilson.

“I hear you can buy your own island down there,” smiled Massara.

“Well, first, let’s see if we can’t make enough money to buy our own jets
to fly there,” said Corlund, not laughing or smiling, “Let’s get on it.”



Chapter 10 – The Clean Up Set

Every December the center of the surfing world could be found on the North Shore of
Oahu, and with the world championship on the line, Sonny-boy Noaloa has always been
ready to take on all comers. But not this year. His thug posse creates problems that puts Wavelife’s reputation in jeopardy, and Cheryl Corlund has to think fast. She turns to Heath Larson to intervene, and he in turn has to rely on his tow-in partner, a pure-bred Hawaiian who knows the real meaning of aloha.

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