Word: ling
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...Ling, who had made it out of dirt-poor Oklahoma roots to build a successful electronics company, had enough vision for everybody. Other men had swapped complex packages of securities in their companies to stitch together glorious empires. Ling could do all that and make it sound different and better. When making presentations to potential merger partners, he would take a piece of chalk or a felt pen and sketch marvelous projections of future earnings. He sounded like a cross between an evangelist and Univac. Not even the financial experts fully grasped how Ling intended to meet his predictions...
Next Bargain. When Ling bought up companies at low prices, however, few of his shareholders stopped to ponder that he could get them cheap precisely because they had ponderous problems. Hoping both to solve those problems and raise more and more cash, Ling sliced up the major parts of his empire, creating smaller companies. (When he cut Wilson & Co. into separate meatpacking, sporting-goods and drug firms, brokers dubbed them "meat ball, golf ball and goof ball.") The plan was to sell new shares in these companies to the public, as well as to give plenty of options to their...
Working with projections from his subsidiary managers, Ling as late as the autumn of 1969 had been led to believe that LTV year-end earnings would be $40 million or more; they came out at just $2,000,000-a miscalculation of 2,000%. "The terrible surprise," says Brown in an almost comic understatement, "had to be the result of his subsidiary managers either lying to him or not knowing how poorly they were doing, or both...
...argued that Ling was partly a victim of pure bad luck. While the economy was surging, LTV could paper over its weaknesses and use its rising stock to buy more companies. Then the Nixon Administration's anti-inflation "game plan" led to the recession and stock market collapse of 1969-70. That in turn shook out many of the glib-talking hustlers who had built too big on shaky foundations. Further, the Administration, responding to complaints from established businessmen that the conglomerate operators were dangerous predators, started a particularly vigorous antitrust drive. Jim Ling was its prime target. Justice...
Author Brown is sometimes wordy and overpraising of his subject. All correction made, though, Ling comes through as an honest, essentially likable man. The book, however, does not confront the larger question of the effect of conglomerates, and whether or not Ling, whatever his intentions, was more of a force for good or ill in America. It is hard not to conclude that Ling and overreaching conglomerators like him have put a severe strain on the fabric of public trust in big business. The giddy ride up at LTV was a good trip for many shareholders and bankers; but when...