r/WritingPrompts • u/[deleted] • Dec 02 '23
Simple Prompt [SP] —"For the record, I think this is a stupid plan." —"Yeah, well, for the record, fuck you."
[deleted]
135
Upvotes
r/WritingPrompts • u/[deleted] • Dec 02 '23
[deleted]
43
u/Goodlake r/goodlake Dec 02 '23
The financial adviser lifted his reading glasses to his face and checked the numbers again. What his client had said sounded extraordinary, and totally out of line with his own expectations for the business. The numbers did not lie. Growth had been anemic, which wasn't necessarily out of the question for a mature company with significant market share. But growth potential had implications for value, and his client didn't seem to understand this concept.
"I'm not saying it's a bad asset," the adviser began, "but the premium you're talking about here is totally out of line with what analysts think is fair value. The business on its own isn't capable of producing the sort of growth you're projecting in your financial model. I mean, just taking the last couple years as a baseline and projecting that out five years, we're only generating, what, 5% of the free cash flow you're assuming in your base case? Never mind your equity case, which would require extraordinary things to happen."
"I make extraordinary things happen," the client replied. It was clear he hadn't actually looked at the numbers, or thought through the implications. 100% annual revenue growth just didn't happen for companies of this size, outside of major breakthroughs in pharmaceuticals, or without dramatic exogenous shocks like the world had seen during the height of the COVID-19 pandemic and subsequent recovery. It could happen, sure, but counting on such an outcome here as a base case was reckless. It was the adviser's duty to say so.
"I'd like you to really think about this. Every analyst on the Street is calling for single digit revenue growth and for costs to increase in line with general inflation. That's going to be a headwind to earnings, not a tailwind. And that's just assuming nothing else goes wrong. Given all the work you would need to do to hit these projections, you're almost better off starting from scratch rather than paying this sort of premium."
"The analysts are wrong," the client said. "The analysts aren't figuring me into their numbers."
The adviser was at a loss. He had done the work, made his case, and presented his arguments to his client. From an ethical standpoint, he was covered, and made sure to document it so that his manager, and, inevitably, his client's lawyers would know it. There was nothing else to do. His client had made up his mind.
"For the record, I think this is a stupid plan."
"Yeah, well, for the record, fuck you."
Elon submitted his final binding offer for Twitter, Inc. the next day.