Tuesday, May 1, 2012

When Braeburn Capital invested in Google - a fiction story (obviously)


The activity in the second floor suite of a Reno, Nevada office building was a little unusual on the morning of April 31.

"Why do we need to have interns?" asked Gene in an exasperated tone.

"Because the parent company has to put them somewhere," replied Michael.

"I know." Gene was gathering his paperwork for the morning executive staff meeting at Braeburn Capital, an investment company based in Reno. "But they're so - interny."

"Tell me about it," replied Gary. "The last one arrived at the office dressed in black with stars in her eyes. Within five minutes she said that her life had been ruined."

Michael smiled. "Well, the new intern will last at least six minutes this time around. The first part of today's meeting will be about bowling night."

"Shh," whispered Gene. "I hear someone outside."

"Welcome to Braeburn Capital, Steve," said Michael as he shook the new intern's hand.

"Thank you, sir," replied the new intern. "This is - well, it's insanely great."

Gene managed to stifle a groan. "You're just in time for the morning staff meeting."

They filed into the small conference room, sparsely decorated with a few pictures of i-somethings and some paintings of the Nevada desert. Steve was excited, and was talking a mile a minute.

"I mean, I see this as the opportunity of a lifetime. My parents taught me about everything, and really instilled a love of design in me. My dad always said that he couldn't decide whether to name me Steve, or Steve." He chuckled. "And I'm ready to work 80 hours a week and love it for this internship."

"Well, Steve, we won't be flying a pirate flag here," replied Michael as he smiled. "But rest assured, your work for us this summer will be extremely important to the parent corporation. Even though Braeburn Capital is way out in Reno, Nevada, rest assured that our work here is very visible back at headquarters in Cupertino."

Having dispensed with the business about bowling night, as well as a request for someone to clean the espresso machine, Michael was ready to get down to business.

"Gary," asked Michael, "what are your recommendations for Braeburn's investment portfolio?"

Gary, usually brief and to the point, elaborated his words a little more this morning for the benefit of the intern. "Well, Michael," began Gary, "Braeburn Capital continues to manage the cash assets of Apple to the best of its ability, with the long-term goal of maximizing the cash position of the parent company. This allows Apple to continue to invest in research and development, acquisitions, and other expansion efforts."

Steve was listening intently.

"While Braeburn always works within the highest ethical standards of Apple and always works within the law, we also take pains to always maximize shareholder value. The very fact that Braeburn is located in Nevada, rather than California, is a testimony to our commitment to our shareholders."

Michael and Gene nodded approvingly. Steve was soaking it all in.

"Therefore," Gary continued, "I have just checked the markets, and I have come forth with a recommendation this morning. This recommendation, however, will need approval from Cupertino - we can't act on it alone."

Steve's eyes were wide open - as were Michael's and Gene's. They had no idea that Gary was planning on making a significant recommendation this morning - those happened only every so often, and usually after extensive consultation among the entire staff.

"Gentlemen," continued Gary as he handed out folders to the executives, "I am recommending that we forward a request to Tim Cook to significantly increase our position in Google."

A frown began to cross Steve's face, but Michael and Gene didn't notice.

"Increase our position in Google?" asked Gene. "Over a quarter of our funds are invested in Google already. Isn't it dangerous to put all our eggs in one basket?"

"How much of an increase?" asked Michael.

"Don't worry, Gene," replied Gary. "As long as I'm here, it would take a major rally for me to put more than forty percent of our funds into any company - even Google. But Michael, forty percent is precisely what I'm recommending. If you look at Table One in the handout, coupled with the anticipated growth in Figure One, I think that all of you will agree that this is the prudent action for Braeburn to take."

"Excuse me," said Steve quietly, as he left the room, went into the bathroom, and closed the door. The executives could hear Steve loudly sobbing.

Michael heaved a sigh of relief. "At least he didn't scream at us for abandoning the Macintosh Way."

Gene suddenly thought of something. "Michael, did we remember to have someone bolt the bathroom windows so they couldn't be opened?"

"I don't remember," replied Michael. "But the last intern to jump out the window only had a broken leg. I think this guy was a gymnast if I remember correctly - he'll be all right. But getting back to business," Michael continued, "I wonder if a forty-five percent investment would be the right thing to do in this circumstance...."

References: Entity Details, Braeburn Capital Inc., Nevada Secretary of State; Alex Scrivener Google+ post
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