The First Billion

"Oh?" asked Gavallan, knowing that this was how the Russian showed his anger, not with bluster but with discipline, the fist clenching tighter.

"Nasdaq is for new, unproven companies. We are established. We are profitable. A market leader in the East. Perhaps you are not as conversant about our company as you should be. It comes down to a question of face. We, Russians, have a terrible inferiority complex. Several of our nation's larger corporations are already trading on the New York Stock Exchange. We must list Mercury alongside them. It is the New York Stock Exchange or nothing."

Gavallan made the appropriate soothing noises, ego gratification being perhaps the most important job of a chief executive. He'd bring up the listing requirements at a later date- if there was a later date. After a promising start, the meeting had embarked on a series of wrong turns. The first order of business was to change the atmosphere. A long, drafty hallway was hardly the place for this conversation.

Gavallan suggested they continue their discussion in the provost's lounge, where they might sit and have a cup of coffee. He had attended business school at Stanford and knew the provost's lounge as the spot where the university president wined and dined the school's more important benefactors. Apparently there was something about oversized club chairs and oil portraits of long-dead scholars that made people free with their checkbooks.

Inside the lounge, the two men sat down, agreeing almost immediately that the chairs were wonderfully comfortable. Settling himself in, Kirov delved into his pocket for a sterling-silver cigarette case. "Sobranie?" Opening it, he offered the case to Gavallan. The cigarettes were long and black, the two-headed Russian eagle stamped boldly above a shiny gold filter. One head faced east, the other west. In Russia, danger had always come from within and without.

"No thank you," said Gavallan. "I don't smoke."

"I know, I know," pleaded Kirov, as he slipped one into his mouth and lit it with a matching silver lighter. "But a man should be allowed one vice." The brows jumped excitedly under the curtain of blue smoke. "After all, we are not saints!"

Kirov drew thoughtfully on the cigarette, inhaling for what seemed an eternity before expelling the smoke in neat flutes through his nose. "I have spoken with a few of your competitors these last days," he said offhandedly. "As you can imagine, a good many are anxious to work with us. Please don't think me rude, but I was hoping you might be able to tell me why I should consider someone outside of New York. Someone so much smaller."

Gavallan made it a point never to discuss his competitors- comparisons conveyed weakness and insecurity. "True, we're a smaller company," he said, launching into a pitch he'd given a thousand times, "but we think our size is one of our advantages. We choose our clients with great care and we like to think they exercise the same scrutiny in choosing us. Our record in the Internet sector is second to none. Of the forty-two companies we've taken public in the last four years, more than fifty percent are trading at significant multiples of their offering price. Not one has gone belly-up. We're selective with whom we work, Mr. Kirov. Black Jet's name on a prospectus has come to indicate a certain quality. We're deeply committed to the companies we offer our investors. The clients for whom we do choose to work receive the complete and dedicated resources of our company."

"So you choose your clients?"

"I prefer to think that we choose each other. Hopefully, bringing Mercury public will be the first step in a long relationship between our two groups."

"So you wish to work with Mercury? You are sure?" Kirov's amused tone indicated he hadn't heard this approach before and just might be buying into it.

"It would be a privilege. And I think I can promise that in the current environment, Black Jet could insure that a Mercury offering would be a home run."

Kirov nodded approvingly. If nothing else, he looked to be enjoying the courtship. He questioned Gavallan about Black Jet's ability to manage so large an offering, its relative inexperience in working with international companies, and its commitment to supporting the stock once it began trading. He asked about Black Jet's analyst, inquiring whether he was on Institutional Investor's first team (he was, at a salary of four million a year!), and was curious to know if the larger funds would be buyers of the stock, meaning if they would look to build a long-term position in Mercury.

In short, he asked all the right questions. Either he'd been briefed by his chief financial officer or he'd already sat through a dozen of these pitches.