Once the compound was in place things would be a lot easier, Baz thought. Higgins had signed up as his on-site manager and was turning up trumps. Settling down had done the old bruiser no end of good, it appeared. After years of proving otherwise, he had now made plain that he could, in fact, operate his brain, which would be convenient for both of them.
14
Barron Mining was due to go public any day and Sebastian was nervous. He hadn’t received a call about it and he was expecting one. He saw on his Bloomberg that a ten-day notice had been released and therefore that the company was in the final days of its flotation but calls to the broker were going unanswered. Something was up and he decided to write a stinky email.
“Ralph, I need to speak to you about Barron. I still haven’t got my share certs and I’m awaiting a call from you about the float. I’m interested in participating and concerned to get my existing shares into my account. If I can’t speak to you shortly I’ll have to resort to my bank’s analysts and ask them to go digging. Seb”
That should get their attention, he thought. He didn’t think they’d appreciate his bank’s team of red-hot financial gurus let loose on them. A bad note from them and the whole issue might be scuppered. It was a threat of mutually assured destruction.
Sure enough, his BlackBerry rang.
“Sebastian, I’ve been meaning to call you for days. Very busy, you understand.”
“Of course. What uplift is the IPO coming in at?”
“A hundred per cent of the pre-IPO.”
“Excellent.”
“Would you like to be taken out?” asked the broker.
If they took the stock he’d bought he’d make a very tidy sum but, as they clearly wanted it, the share price was obviously about to ride high after the float. “How much is the float raising?”
“Thirty million pounds.”
“Is anyone else coming out?”
“Plenty,” said the broker.
That sounded like no one to Sebastian. “I’d like an allocation in the IPO,” he said.
There was a note of hesitation at the other end. “I’m not sure,” said Ralph. “This is institutional placing, not a PA round. How much were you looking for?”
“Two million,” he said, rather rashly. He’d have to borrow it from the firm’s credit line to him.
“All right. I’ll put you down for two million but there will be a scale back, so you won’t get the full amount. I’ll know more nearer the time.”
Sebastian felt relieved. Going in for another two million was madness. If he was sensible he’d cash his pre-IPO position now and take the fat profit. “Let me know,” he said.
He had dreamt every night about the mine in Congo: sometimes the dream was pleasant, but at others it was a nightmare.
On Monday morning his phone rang again. “The offer’s closed,” said Ralph. “It was fifty times oversubscribed but I managed to get you another hundred K.”
“That’s pathetic,” Sebastian protested.
“A lot of people got nothing, but, as you were in from day one, I called in a favour.”
“Can’t you manage some more?”
“Sorry. It was hard enough to get you this many.”
“When’s the first day of trading?”
“Next Monday.”
“Is it going to pop?”
“Oh, yes,” said Ralph, “and if you want to sell, just give me the nod and I’ll get you out right away.”
“Thanks. I’ll be in touch” He slammed the phone down, his pale skin flushing red. Bloody hell! He’d missed out on a huge amount of money again.
Now all his dreams were nightmares. In the worst, Jemima had run off with Jim, his old junior, now a zillionaire. They were dismantling his home brick by brick and auctioning it off on eBay. He hadn’t made a fortune and that was exactly the same as losing one.
He was going to buy in the market on the first day. He was sure the Barron Mining deposit in Congo was a huge one, that ‘the boys’ knew it and wanted it all for themselves.
At eight a.m. on Monday morning Barron Mining opened for trading. Sebastian had typed its ticker into his screen and watched the market-makers open their prices. The Barron Mining stock ticker was “BOM” and people would use these three letters to look up its share price from now on. On the chat sites they were calling the company Barmin and the posters seemed to know a lot of stuff he hadn’t heard about. Apart from the cobalt there were unannounced kimberlitic structures on the land. Amazing, thought Sebastian. And then it all made sense. That was why they’d been so keen to buy back his stock at every stage of the flotation process. The diamonds Baz had shown him weren’t a sideshow but the real deal. Everyone knew the area was riddled with them. The reason the place had been a war zone was because it had so many. After all, the site was right next to several volcanoes and that was where diamonds came from. All the pieces fell into place.
He bought in the market as it opened 60 per cent up from the IPO price. He chased the price as the share zoomed up, and, by the time he had spent his borrowed two million, the price was two pounds. He felt strong and powerful. He had sussed their little game.
Barron was 200p and sooner or later it would be a fiver – maybe even a tenner.
The price ticked down and started to drift off. Who was selling?
By the close of play the share price was 155p. Sebastian had lost nigh on three-quarters of a million pounds and a lot of his initial profits had been eaten away. At the flotation price he could have taken a six hundred thousand pounds’ profit.
Within minutes of the opening, if he hadn’t bought more, he would have been sitting on a £1.2 million win.
At two quid he would have been more than one and a half million ahead, but he had gone “all in”, and after the last-minute faint in the price he was back profit-wise to roughly where he would have been if he’d let them sell his initial stake at the float price. The trouble was, the stakes were now so very much higher.
That night the nightmares came again. What the blazes had he done?
In the morning the share price opened up 5p. His frown turned immediately into a smile. The first days of trading were going to be volatile. He should switch off his screen and look at it again in a week. It would save him a lot of trouble. Instead he fixated on Barron’s progress. Every tick up was delicious, every tick down a smack in the face. But it was ticking up slowly and, as the days passed, its rise accelerated.
Barron was the talk of the Internet. On the ADVFN website, posters were singing the stock to the skies. Small investors riding the wave were cheering it on like football fans.
To Sebastian, they seemed well informed, while the “de-rampers”, who suggested it was just another swindle, were clearly evil shorters, trying to ruin a perfectly good mine.
The only people posting who really knew any more than was in the share prospectus were Baz’s Filipino team of rampers, employed to spread the word, or at least Baz’s version of it, around the grapevine of the web. It was they who kept a flame under the wild talk that spewed out of the speculators. This was a world that Sebastian didn’t know existed. While his bank might float a company for a few billion, he had no idea how the small-cap market worked.
Any company worth below two hundred and fifty million was considered a minnow and ignored as irrelevant. A company of Barron’s size was too tiny to warrant anyone’s time at his bank so he had never been involved at that end of the market. He was ignorant of the situation in which he now found himself.
Barron pulled back from 198p a share. He told himself it was profit-taking at the 200p level and that soon enough it would break new ground. In a fit of excitement he bought another half-million, trying to push it over the 200p price line. He managed it but it immediately fell back. He had now bought nearly £3 million of the stock and found himself having to announce a significant interest in the company to the stock exchange. That was a little embarrassing. A compliance officer turned up and asked him lots of loaded que
stions.
He hadn’t done anything wrong, though, so unless they wanted shot of him, nothing would follow.
The share price popped up on the announcement. The bulletin boards were singing that a big wheel in a big bank held a huge stake, proof enough that Barron would be a billion-pound company by Christmas. Sebastian smiled to himself. That was flattering. The price hit 220p.
Then it slipped again.
Jim looked out on to the foreshore as the tide dropped to its lowest point. On the other side of the river, someone was walking along the bank searching among the stones and rubble. He got up and opened the window. There was a ladder just below the sill, leading down to the grey, pebbly beach. He climbed down it and began to search between the stones. Apart from broken bricks and slates, there was lots of smashed pottery, much of it ancient, lumps of iron, nails, screws and bolts. On a chalk bed he spotted a dull silver disc, picked it up and peered at it. There didn’t appear to be anything on its surface. He walked on.
The City looked different from down there, a view he had never had of it before. His nan had always warned him to keep away from the river. “Sinking mud,” she would say, “will suck you down and drown you.” Now he could see that was nonsense. It was just a stony riverbank littered with the rubbish of a thousand years.
15
Barron Mining had been slipping every day. Sebastian’s profits were gone and now, as the share price hit 100p, he was looking at a nasty loss, a six-hundred-thousand-pound loss, equivalent to more than half of his annual salary in one horrific investment, rather than the fat profit he had started with. The brokers who had sold him the deal in the first place always made reassuring noises when he called them – the project was going well, they declared, and there were buyers in the wings.
According to the mining reports, Barron was an amazing resource. It had untold quantities of cobalt, which was in huge demand for hardened steel. Every now and then the price would spike upwards and he would be sure it was about to take off again – until it then slipped off and headed south. Sebastian contacted his own broker and looked into selling.
“What?” he had found himself shouting. “What do you mean I can only get ten thousand pounds away without hitting the price?”
“Eh, eh,” his broker had replied. “This is a market-maker stock and that’s all they’ll take at a go.”
“I didn’t seem to have that problem buying,” he said. “And I’ve got three million pounds of stock I might want to sell.” In fact, he hadn’t got three million pounds of stock any more, but he held so much that he couldn’t get out – at least not quickly. It might take months to unload a position of that size and at a whopping discount. If he tried to withdraw slowly and got lucky, he might get out over weeks or months and then, unless something unexpectedly good turned up, he’d have nailed the price indefinitely at the current level. Most likely, though, he’d drive the share price into the ground – he might halve it if he tried to get out quickly.
“These microcaps are tricky,” said the broker finally. “I can leave an order with the market-maker.”
“You mean you’ll tell them I’m a seller of a huge block of stock?”
“That’s how it works.”
Sebastian looked at the screen showing the market-makers in BOM: they would buy a maximum lot of 10,000 shares at a time. He was stuck in his multi-million share position, unable to sell enough to get out for weeks. He was in big trouble. At least the price was holding above 100p.
Sebastian’s BlackBerry buzzed. It was seven forty. An alert about Barron, an RNS stock-market news release, had been emailed to him on the phone’s screen. He was in the middle of telling the traders that the month had been a fair one and to keep at it. They didn’t pay him much attention when he gave them a bollocking or a pep talk: they were the masters of the universe who saved or broke markets. At least, they had been when Jim had been there. Now they were living off the legend.
Sebastian stopped talking and picked up the phone. He opened the email and practically dropped the BlackBerry. He let out a little cry. Barron had problems, and the price was going to crash at the open. He collected himself. “Thanks, guys,” he said, his face white and speckled red, then stumbled to the door and out of the room. He was going to vomit for sure.
“Thanks, apropos fucking nothing, to you too,” said Dirk, the options specialist, a little startled by his boss’s abrupt departure. “What’s got into him?”
“Irritable bowel,” said Fat Joe, and took a big swig of his latte.
The traders scowled at each other and got up to leave.
Sebastian was sitting miserably on the toilet waiting for two things to happen: the danger of puking to subside, and the market to open in six minutes. In the cubicle, though, with just a web page for company, it was hard to tell what was going on. At his terminal he would be able to see the FTSE futures trading, suggesting either strength or weakness in the market. The market-makers would be coming online with their orders before kick-off and this would give him an idea of what would happen when trading started. But he was caught in a China limbo and, with his tiny screen, all he could do was refresh the page with yesterday’s price on it while he waited for the market to open.
The drilling rig for Barron’s initial exploration programme had been seized in Customs at the Rwandan border and had been impounded. The project was going to be delayed. It wasn’t the end of the world by any means but it was sure to smash the price. The final seconds ticked down unbearably slowly. Then, at last, it was 8:00:01.
He hit the page refresh: 38 per cent down. He blinked in the hope that he had misread it. He refreshed again – 42 per cent down
Suddenly he was calm. He’d had it. He was well and truly scuppered. He got up, flushed the toilet to complete the fiction, and left the stall. He was powerless. He was like an ant scooped up in a spoon of sugar and about to be dropped into a cup of boiling tea.
By the time he reached his screen the price was down only 25 per cent His whole body reacted in a moment of pure relief. Maybe it would zoom ahead now.
His life was hanging by a thread and the market makers, the stock market’s middle men who mediated the price swings of shares, seemed to be pulling him upwards to safety. Now it was only 15 per cent down. Maybe it had been falling because the insiders had known this bad news was coming and were getting out. Now the price would recover as they bought back in. Why the hell wasn’t he an insider on this?
The price suddenly dropped 10 per cent. He closed the screen and opened his email. He had to find a way out of this mess.
He called Ralph, the stinking broker who had sold him the stock, but he wasn’t in.
“Nine o’clock!” he heard himself protest. “The market opens at eight.”
“Not around here,” said the junior sheepishly.
By the time Ralph called the price was at 90p. “Don’t worry,” he said. “It’ll come good, but you’ll have to take the rough with the smooth on this one. The DRC is a bit difficult.”
“Can you place my stock?”
“In what way?”
“Well, take it off me at a pound.”
“Well, the share’s at 90p at the minute.”
“I can see that, but when it gets back there.”
“Perhaps. The market’s a bit thin right now, but we should be able to do something when the next good news comes out.”
“When will that be?”
“That’s tricky. Is your line recorded?”
“No – I’m on the mobile.”
“Good. Have to be careful, you know.”
“Of course.”
“Well, there are reports from the kimberlites.” Sebastian remembered the tiny diamond – he still had it somewhere. “My analysts think they’re important. We have some satellite photos showing a very interesting cluster of kimberlitic structures on the property. Most stones in the region come out of local hand-dug pits only a few metres deep, but the potential for proper exploitation is colossal – an
d there’s the Eye of Kivu, a five hundred carat stone that showed up in Goma only last month. It’s all very promising.”
“When do you think all this will come out?”
“Can’t be sure. Things always take a little longer than you expect, but it’s a strong management team.”
BOM was falling again, ticking down to 85p.
Sebastian had a good mind to buy some more, but he was in way too deep. The price ticked up again as he hung up. He scrunched his eyes up to peer at the Barron chart and tried to make sense of it. He wanted to draw lines on it but there was so little to go on. Then he had a good idea.
The riverbank was full of fascinating old bits and pieces. Wherever Jim looked his eyes picked out strange shapes that turned into old coins or broken cutlery. He could spot even the slightest edge of something interesting and on the banks outside his flat there seemed no end of junk.
Stafford seemed to know what it all was. “The corner of a seventeenth-century pewter shoe buckle,” he might say. “A James the Second tin farthing in very poor condition. An early twentieth-century penknife I should think. A decorated clay-pipe bowl, from the mid-seventeenth century.” He claimed he was no authority, but Jim was impressed, amused and pleased. When he found the pewter end of a Stuart scabbard, which felt like treasure, he was totally hooked.
Stafford had sourced a large glass display case and Jim was filling it with his precious finds. There were two tides a day and only one usually in daylight. Each one was different as every tide had a different rise and fall, and there were miles of foreshore for him to visit.
He had found a passion, if not a purpose.
As he climbed back through the window Stafford was waiting for him. He stepped out of his boots on the large mat that had appeared one day out of the blue. Jim sat on the sofa and emptied his pockets on to a cloth that Stafford produced. “I have tidings, so to speak,” said the butler, plucking a small piece of copper whatnot from the dirty pile. “Anglo-Saxon strap end. Very nice.”
The Twain Maxim Page 8
