Word: mesa
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...executives, who themselves own few shares of their companies, have no more feeling for the average stockholder than they do for baboons in Africa." Pickens calculates that, as a group, officers of the energy giants own just three-tenths of 1% of their firms' shares. (Pickens owns 2.2% of Mesa.) Since they have relatively small investments in their corporations, he argues, oil executives have tended to let stock prices languish. "It infuriates me," he says, "to see them invest their own money in Treasury bills rather than work to improve the value of their companies' stock." According to John...
Pickens moves with cloak-and-dagger stealth once he decides which firm to attack. Only a few Mesa insiders like Financial Vice President David Batchelder, 35, know the target. To keep its identity secret, Pickens gives it a code name (Gulf was "Barrel Cactus," for a plant in Pickens' office), which he uses while accumulating the company's stock. Money for the purchases is funneled in chunks of up to $50 million to Broker Alan Greenberg at the Wall Street firm of Bear, Stearns, and to other securities houses. Pickens transfers the huge sums from numbered bank accounts around...
...this is my family, they're not my employees.' " By the time of his divorce, a combination of business sense, luck and geological knowledge had made Pickens a millionaire. At the heart of his fortune were the energy finds and lucrative investments that had been made by Mesa, which Pickens formed in 1964. Some properties acquired by Mesa rose staggeringly in value. In 1959, for example, Pickens scraped together $35,000 to invest in drilling sites in Canada. Mesa sank the income from those sites into new wells and in 1979 sold its Canadian operations to Dome Petroleum...
Pickens was also devising the tactics that today make his raids akin to a declaration of war. Mesa analysts first study a prospective target in minute detail. "By the time my guys get through with the numbers," Pickens says, "we know those companies better than they know themselves." The team spends months sifting reams of public documents, including the annual reports and other resources kept in Mesa's extensive library of the U.S. petroleum industry. The researchers focus on a firm's domestic oil and gas reserves and feed their data, along with such matters as projected interest rates...
...that Pickens took aim at Cities Service, an Oklahoma firm whose sales were nearly 20 times Mesa's. It proved badger tough, however, and nearly succeeded in swallowing Mesa by bidding for its stock before finally calling it quits and selling out to Occidental Petroleum. That hectic skirmish brought the Mesa group a $31.5 million profit and taught it some lessons. "Mesa had insufficient financial muscle throughout that fight," says Assistant Vice President Sidney Tassin. "We had a good idea but not enough money to back...