America 1982-Chapter 170 - 64: Unexpected Gains_2

Though he looked like a middle school PE teacher on the brink of retirement, Charles straightened his body and locked eyes with Tommy, showing not the slightest hint of underestimating him.

Benjamin Rosen, after graduating from Stanford University and furthering his education at Columbia Business School, went on to work on Wall Street. In fifteen years, he rose to the position of Senior Vice President at Morgan Stanley before choosing to retire. In 1981, he and Leon Sywen co-founded the venture capital firm, Sywen-Rosen Foundation, and in its founding year, invested in Compaq Computer Corporation, serving as its chairman and CEO.

In 1982, Compaq sold fifty-three thousand personal computers, reaching sales of $111 million, becoming the fastest startup in the United States computer hardware industry to hit a hundred million in sales. Coincidentally, in the same year, Lotus Corporation became the fastest startup in the United States computer software industry to achieve a hundred million in sales.

The performance of these two companies in 1982 seemed to signal to all investors that the United States computer industry was officially entering a new era.

What was even more coincidental was that Compaq and Lotus, the investors were none other than the old friends Benjamin Rosen and Leon Sywen, who had joined forces to establish a venture capital firm.

Neither had been mistaken in their vision, but their outcomes were different. Benjamin took the helm at the fast-rising Compaq in the hardware sector, turning what was once a knockoff company into the third-largest in market share for personal computers.

Meanwhile, Leon, with his discerning eye, invested in the unparalleled Lotus Corporation in the software space, only to eventually withdraw his investment due to irreconcilable differences with the two founders, resulting in returns far below expectations.

"Tommy is our designated next party manager for SSD, but I guess he’s not in the mood to design parties for us lately, since his little company is running into some trouble," Charles said with a smile, steering the conversation towards Tommy after Benjamin’s small talk.

Tommy glanced at Charles, still favoring the man who remained the Fraternity’s president, the prime candidate for CEO of Actor Corporation, and a person with high emotional and intelligence quotient online, if only he hadn’t insisted on working in those think tanks.

Benjamin didn’t indulge in insincere pleasantries but followed up on the topic Charles had thrown out, "I read that article in the magazine. After Leon pulled out of Lotus, he told me that sooner or later the company would be devoured. I just didn’t expect it wouldn’t fall to a siege by other major companies, but rather be taken down by one of our SSD members, Tommy, with one hundred seventy-six amici curiae. You shouldn’t be doing computer software; you should be on K Street in Washington, working for those lobbying firms, brokering between businessmen and politicians. You did a beautiful job with this."

"Yeah, Charles and the others have given me a lot of help. Without SSD, I couldn’t have achieved all this. Charles is the boss of us brokers," Tommy replied to Benjamin.

Benjamin nodded, "I guess you guys wouldn’t think I’ve called you over for a party, so I’ll cut to the chase. I’m very interested in Actor Corporation. Although Compaq won’t venture into the software business, there are things in that sector worth our attention. I want to invest in it, whether through financing or, Tommy, if you three are willing to transfer some shares to me for a cash-out. Moreover, Compaq could directly procure OSS software as a bundled product to penetrate those large corporations. I know your software, although selling well, seems to have a somewhat... unusual customer base."

"Do you want all this done before the trial starts?" Tommy asked after a moment of silence.

Benjamin gave a slight nod, picking up a cigar and inspecting it, "The lawsuit between IBM and our eleven computer companies has made us both... somewhat weary."

"If you can persuade IBM to invest in Actor or acquire a stake, then personally, I might consider transferring 15% of my shares to you. SSD friendly price, ten million," Tommy contemplated and then quoted a price to Benjamin.

This meant Tommy valued his own company, Actor Corporation, at sixty-six million.

Benjamin didn’t find the price excessive, given the tens of thousands of sales volumes of Actor Corporation’s OSS software. Handing the cigar to Tommy, he began to smile, "IBM, are you asking me to convince them to invest in you? That’s no joke, right? They’d rather see me hanged right now, and you want their competitor to persuade them, invest in your Actor?"

Although he was jesting, Benjamin believed from Tommy’s remark that the young man was truly like the magazines described: a suit-and-tie bandit.

For himself, ten million was a friendly price, but he was sure it wouldn’t be the same for IBM. Most importantly, he now believed that Tommy Hawk had orchestrated the whole affair, as the young man’s mental acuity was incredibly sharp. He had hardly been seated long before understanding why he would want to invest in or acquire Actor, and why IBM might be willing as well.

Compaq and IBM, at the moment, were somewhat like Actor and Lotus because Compaq, along with eleven other computer companies, had cloned personal computers that were completely compatible with the IBM-PC through reverse engineering IBM’s BIOS firmware, using the same 16-bit AT bus, among other things. Apart from the brand, the computers were indistinguishable from IBM-PCs, with all hardware being perfectly replaceable and all software perfectly compatible. Yet they were able to sell for cheaper than IBM, causing IBM to lose its price advantage.