The First Billion

60

Mr. Kirov, it is an honor to welcome you to New York and to Black Jet Securities,” boomed Bruce Jay Tustin as he greeted Konstantin Kirov outside the main entrance of 11 Madison Avenue.

“The honor is mine,” said Kirov, climbing from the limousine. Shaking Tustin’s hand, he glanced up at the building, a noble façade of steel and glass. “It’s a privilege to be here.”

“If you don’t mind, let’s get upstairs. We’re in a bit of a hurry. We’ve got a lot of people waiting for the big event.”

“Do I have time to button my jacket?” He was always taken aback by the American ability to be overly polite and unbearably rude at the same time. He followed Tustin through the swinging doors and into the lobby, where Tustin pinned a badge on his jacket and shepherded him past the security desk.

At three-thirty in the afternoon, the lobby was pleasantly busy. A steady stream of men and women churned past Kirov. White, black, mulatto, Asian, Hispanic—as many ethnic mixes as in the former Soviet Union. There was an eagerness to their faces, an alacrity to their step, a forthrightness in their demeanor, that both amazed and frightened him. Such confidence in the world. Such faith that the system would not disappoint. He was sure every one of them held a valid claim on dreams of expensive cars and luxury apartments and vacations in Paris. No doubt they already possessed color televisions, PCs, cellular telephones, digital cameras, Japanese stereos, and closets full of fine clothing, most of which they never wore. They owned refrigerators choked with fresh vegetables, eggs, milk, cheese, leftover Chinese food, soda, and foreign mineral water. Still, they ate out twice a week. They had bank accounts and ATM cards and Swiss watches and cable TV. Many owned automobiles. In short, they had everything. And look at them. Hungry as wolves for more. Bravo!

Kirov was a student of the American brand of greed, a fan of the excess that capitalism bred. He had always been curious as to how the old barons of the Kremlin, all dead and buried (and, he hoped, rotting in hell), could have believed that dogma and political creed could suffocate the competitive drive of the human soul, could stifle man’s innate desire to exploit his talents to the best of his abilities, to toil and be compensated accordingly. What hubris! What arrogance! What barbarity!

I am the first of the new breed, Kirov told himself with the same ambitious cynicism he read painted on the faces around him. I am a pioneer sent to show my countrymen the path to success. To midwife Russia’s transition to a modern economy.

A few bold Americans had lit the way a century earlier. Men who had overseen the growth of the railroads, the introduction of oil, the mass manufacture of steel. Some called them “robber barons,” but Kirov thought differently. They were men of vision, builders, creators, founders of a new empire. The riches they amassed were small compensation for the legacy they left behind.

He was no different. Bold? Yes. Aggressive? Always. Immoral? Unethical? Unscrupulous? Let the next generation judge. He was a modern-day Gould. A twenty-first-century Vanderbilt, if not quite a Rockefeller.

They entered a waiting elevator and Tustin pressed the button for the twelfth floor. “Tired, sir?”

Kirov breathed deeply, suddenly feeling quite at home. “On the contrary, invigorated.”

He looked closely at Tustin, standing with his arms behind his back like a latter-day Napoleon. The banker was dressed in a bold gray pinstripe, a pink broadcloth shirt, and a blaring red necktie that could be heard back in Petersburg. His hair was slicked back with enough pomade to fill a lake. There was a slight bruise on his lip where Gavallan had punched him, but Kirov decided not to mention it. He was playing it by the book, pretending to be a client just like any other.

“Any word from Mr. Gavallan?” he asked.

“None, but I’m sure he’ll check in shortly.”

“I’m sure he will too. Still, it is disturbing.”

Tustin simply lowered his eyes, and Kirov thought, Here is a man who cares less for Gavallan than I. “I see the markets are up today,” he said.

“The Dow’s up one twenty, the Nasdaq about the same. Sentiment is very positive lately. Maybe you’re bringing us luck. After all, you brought us some blue skies. For the last couple of days, the city has had nothing but rain.”

“You know the old saying. ‘When angels travel, the heavens smile.’ And what about the pricing?”

“I’m sure you’ll be pleasantly surprised. There are a couple of formalities we like to engage in before we make an official announcement. We’ve got a conference room reserved. Like I said, a few people will be joining us.”

“Very good,” said Kirov, keeping the smile pasted to his face. Inside, however, he was worried. Formalities? What formalities could remain at this eleventh hour?

The doors slid back and Tustin requested that Kirov follow him. They walked past the elevator bank and onto the trading floor, threading their way through aisle upon aisle of men and women seated in front of a myriad screens. And as they walked, something strange and marvelous happened. The room grew hushed. The incessant chatter died down. At first Kirov heard one pair of hands begin clapping, then another. He looked around, eager to spot the source of the applause, wondering in his vain yet insecure mind if it was mocking or adulatory. The next thing he knew every person in the room had risen and was pounding his or her hands together. Respectfully. Enthusiastically. Lovingly. Every living soul on the trading floor of Black Jet Securities was saluting his arrival.

Slowing his gait, Kirov raised a hand to acknowledge the applause. He selected an expression of imperious solemnity to greet the masses. He was Alexander riding into Macedon. Caesar returning to Rome. Chuikov arriving in Red Square after taking Berlin.

“It is too much, really,” he said, bowing to speak into Tustin’s ear.

“Nonsense.”

And then Kirov heard the music and he stopped walking altogether. The strains of “The International,” the majestic Russian national anthem, played from hidden loudspeakers. The applause died and all eyes fell on him. Kirov was stunned, and for a few seconds he didn’t know what expression to choose. The music grew louder, and his skin shivered with goose bumps. Emotion plucked at his eyes, and Kirov was damned if he wasn’t crying, this man born to peasant stock, this servant of free speech, this disciple of technology. This son of Russia.

Tustin patted his shoulder, nodding as if to say it was all right to shed a tear, that his pride was well-deserved, and for a moment Kirov loved him, too, as he loved everyone else in the room. This handsome, well-attired, overtly intelligent assemblage of financial professionals.

The anthem came to an end and the applause again started up, but only briefly. Kirov offered the victor’s smile expected of him, gave a final wave, then followed Tustin to a conference room that took up a corner of the floor. Twenty or thirty people were milling about the glassed-in room, drinking champagne, munching on canapés, and making small talk.

“Janusz, Václav, Ed, hello. So glad you could make it.” One by one he greeted his underlings from Mercury, then the others who had shepherded the Mercury offering through the offering process. Lawyers, bankers, accountants. And there was old man Silber himself—gray, bent, and exceedingly ugly, a Swiss gnome indeed. Kirov shook his hand. Apparently, the dinosaur hadn’t yet gotten the word about the fate of his in-house tout, Pillonel.

“Welcome to Black Jet,” said Antony Llewellyn-Davies, tapping him on the shoulder and handing him a glass of champagne. “We’re delighted you were able to make it on time. One never knows with those small jets.”

“What is small about a G-5?”

“Oh, nothing, I just…”

“Thank you.” Kirov accepted the champagne, averting his gaze. The Englishman always left him feeling nervous and inadequate, with his soft eyes and snobby manner.

A spoon clinked a glass and the room fell silent. Bruce Jay Tustin cleared his throat, and those around him stepped back to clear a small space. “Ladies and gentlemen, if I might have your attention, please. It’s time for us to conduct some important business…”

Don’t look behind you,” Gavallan instructed Cate, laying a hand on her leg. “They’ve been there since we got into the city. Maybe before, but I didn’t pick them up.”

“How can you be sure?”

“I got the first two numbers of their license plates. I’m sure.”

“It could be routine,” said Cate. “The traffic militia getting ready to shake us down for a little bribe.”

Gavallan eyed her doubtfully. “We both know better than that.”

“But why didn’t they stop Graf?”

“I can’t say. Probably they didn’t have orders to. All I know is that we stick out like a sore thumb in this car. We’ve got to ditch it in a hurry.”

They had crossed the river and were driving south on Kutuzovsky Prospekt, a broad boulevard eight lanes across. Traffic was heavy, but moving. Stone apartment buildings five stories high, each a block long, lined the street. Gavallan maneuvered the large SUV into the center lane, checking the rearview mirror. A few seconds later, the Chaika followed, a hearse amid a carpet of colorful Fiats, Fords, and Opels.

They’re obvious about it, that’s for sure, thought Gavallan.

“You know where we are?” he asked.

“Of course.”

“It’s time to abandon ship. Find us a good place around here for us to get away from those goons.”

“Ahead is a factory district. There are a lot of side streets, alleys really, that separate the different warehouses and manufacturing plants. It used to be kind of run-down. You wouldn’t want to go there at night, I’ll tell you that.”

“Sounds good.”

“You really want to just leave the car?”

“They won’t be expecting us to. It’ll give us a head start at least.”

Gavallan kept the Suburban in the center lane, pointing out to Cate their best possible path. Approaching the next stoplight, he slowed to insure he would be the last car across as it turned red. The light turned from green to yellow. He waited, watching the cars nose in aggressively from his left. The light turned red. At the last instant, he gunned the engine, making it through the intersection amid a barrage of horns and obscene gestures as a wave of cars closed off the street and left the Chaika behind him, marooned.

He drove twenty yards farther and then, blocked by the grid of automobiles in front of him, stopped. “Get out.”

He and Cate opened their doors and ran across the three lanes of traffic. Reaching the sidewalk, Gavallan glanced behind him. “Holy shit.”

Heads were popping out of several of the cars stuck in traffic ahead of them. Two men appeared from a yellow Fiat. Another two from a white Simca. A lone man from a Mercedes. All left their vehicles and began threading through the gridlock toward them. Swallowing hard, Gavallan looked back. The goons from the Chaika were out too, rushing through the intersection as if fording a stream, brandishing pistols for cars to stop.

“Move! Move! Move!” Gavallan yelled.

Cate led the way, running up the sidewalk to the first side street and dashing right. Fifty yards up she crossed the pavement, took another left, then ducked into an alley that ran between two apartment buildings. Her strides were long, her arms pumping, her eyes aimed to the fore. Gavallan stayed at her heel, daring a glance behind them every ten or fifteen steps. He counted seven men running after them. They looked to be bunched in groups: three a hundred yards back, another three seventy yards away, and a lone man fifty yards and closing.

Coming to the end of the alley, Cate darted to the right. They were confronted by two crumbling roads that led at odd angles toward low, decrepit wooden warehouses set in fields of uncut grass. Cate continued to the right. They passed through the field, Gavallan stumbling in a pothole and catching sight of the lone runner, nearer now, a gun in his right hand.

“We’ve got to get off the road,” he panted, catching up to Cate. “There’s one guy back there we’re not going to shake.”

Cate nodded, her lips drawn taut. At the far side of the warehouse, they came to another street. Apartments on both sides. All of them newer, almost modern—the prefab monstrosities the press used to mock: paper-thin walls, plumbing that leaked from the ceiling like rain, air currents that rushed between the crevices that separated one unit from the other. They found another alley. Cate ducked left and after ten steps halted.

“What?” asked Gavallan.

“Come on. Hustle.” She was already crawling through an open window into a ground-floor apartment. Gavallan followed, slamming the window behind him, ripping the curtains closed. He was in a bedroom. It was neat. A nicely made-up single bed covered with a red top sheet. Posters of Los Angeles and Mexico City on the walls. A crib. A dresser with mirrored drawers.

Into the hallway. A shout. Gavallan found Cate in the front room, speaking feverishly to a young dark-haired woman cradling a baby on her lap. The woman stared at Gavallan with intense, frightened eyes. Smells of soup and burnt toast. Another instant and they were out the front door, walking briskly down a dim corridor.

Up the stairs. One flight. Two. Gavallan followed, too winded to ask any questions, happy to have someone else take the lead. After four stories, they reached the rooftop. The door was locked. Gavallan stepped past Cate, raised his leg, and kicked viciously at the handle. Wood splintered. The door flung open, rebounding on its hinges. Sunlight flooded the stairwell.

Cate ran to the edge of the roof and peeked her head over. Raising her arm, she signaled Gavallan back. He dropped to a crouch and eased himself toward the parapet. The seven men were gathered in the street. Arms gesticulated wildly. Raised voices drifted up to them. Then there was a screech of tires. A silver sedan rounded the corner, shuddering to a halt, disgorging four men.

“We can’t wait here,” said Gavallan, mopping the sweat from his eyes. “They’re mustering an army down there.”

Cate backed away from the precipice. Setting her hands on her hips, she looked first left, then right. “These apartments are built one next to the other. We can work our way along the roof. At the end of the block, we’ll go downstairs and come out on the next street over.”

They jogged across the rooftops, easily jumping the gaps between buildings, until they’d reached the end of the street. Lowering himself to his belly, Gavallan ventured a glance below. The men, now eleven in number, stood a hundred yards away, still congregated in the center of the street. An automobile approached from the other direction and made the mistake of honking at them. Immediately, one of the men broke off from the group and pounded savagely on the intruder’s hood. A head came out the window. Words were exchanged. Several more of the secret policemen approached. In a moment, they had the driver out of the car and on the ground, and began kicking him.

“Now’s our chance,” said Cate. “Let’s get down to the street.”

“But we don’t have a car.”

“Don’t worry,” she answered, already moving toward the stairwell. “I’ll get us one.”

It’s been a while since we’ve had an occasion to use this room,” Bruce Jay Tustin began. “There’s no need to mention that it’s been a rough year, but boy, it’s been a rough year! I guess it was natural, then, for the Mercury Broadband offering to pose some problems of its own. It wasn’t the easiest deal to put together, but it’s a testament to our professionals and to Mercury’s solid management team that we were able to stay focused and surmount those obstacles, so that we’re able to stand here among one another today.”

“Here, here,” murmured the assembly.

Tustin affected a modest stance, his pugilist’s chin tucked into his collar. “Let me say that I’m not the one who should be giving this speech. That privilege belongs to another man, someone who for very grave reasons cannot be here today. For those of you who just flew in, I’d like to say that I don’t know any more about Jett’s whereabouts or his status than you do. I think it best that we offer him our prayers and keep the faith. I’m sure everything will turn out for the best.”

Silence reigned as John J. Gavallan, the firm’s founder, majority shareholder, and guiding spirit, was sent their prayers. But only for five seconds—then the voices began to swell again. Standing at once among and apart from the assembly, Kirov felt a violent tick in his brain. Enough of the preliminaries. It was time to get to the main event. What had they priced the damn security at?

Finally, Tustin clinked his glass one more time.

“They say ‘All’s well that ends well,’” he intoned. “And, ladies and gentlemen, I stand before you this evening with news that the Mercury Broadband deal will end very well indeed!” Pulling a note card from his jacket, he slipped on a pair of bifocals. “I don’t need these, but I hear they make me look sexy,” he said, to a chorus of groans. Then he read: “After a three-week road show that took our executives from Shanghai to Stockholm, from Pittsburgh to Peoria, and after a total of seventy-four investor meetings, I am happy to offer the following comments: The Mercury order book stands at forty times oversubscribed. We have an unprecedented thirty ten-percent orders. And on one-to-one meetings, we scored a cumulative hit ratio of ninety-two percent.”

Translated, Tustin’s words meant that they had orders for forty times as many shares as they would allocate. Thirty of their clients had asked to take as much of the offering as Black Jet would give them. And 92 percent of the firms with whom Mercury executives had met to pitch the offering had put in orders. By any measure, it was an extraordinary success.

So much for the Private Eye-PO, scoffed Kirov silently. So much for Baranov and Gavallan and even Katya. There would be no mourning any of them. They had brought their fates upon themselves. No one ever said empire building was without pain.

Tustin continued over the sustained hollering and applause. “I guess there’s only one piece of information left to give you guys. For that, let me turn the floor over to Tony.” He walked over to Llewellyn-Davies and gave him a big bear hug. “Two Names, you done good.”

“But seriously, folks, we have had some difficulties with Mercury,” Llewellyn-Davies declared as his smile faded and his cheeks grew taut. “Like it or not, though, the time has come for us to put a price on this thing. So here goes. Based on the market’s appetite for Mercury stock and using some valuation models of businesses in similar spaces, we’ve finally come up with something.” He shot Meg Kratzer a glance. “This is going out on the hoot and holler, isn’t it?”

Meg held up the speaker box. “You’re going out live, Tony.”

“Great,” he said. “Super. So anyway, where was I? Oh yeah, pricing. Ladies and gentlemen… Mr. Kirov… tomorrow morning at nine-thirty, shares of Mercury Broadband—ticker symbol MBB—will be issued at thirty dollars a share. Three dollars above our highest estimate!”

Llewellyn-Davies crossed the room and placed himself in front of Kirov.

“Mr. Kirov,” he said formally, as if asking him to swear in court. “As chairman and majority shareholder of Mercury Broadband, do you accept the price?”

Kirov had already done the math. Thirty dollars a share brought the total offering to 2.2 billion dollars. Deducting Leonid’s share and the underwriting expenses, he would still pocket over a billion dollars. And that was just for the 33 percent of the company that was being offered to the public. Were he to value a hundred percent of the shares, Mercury had a theoretical worth of nearly seven billion dollars.

“Thank you, Mr. Llewellyn-Davies, Mr. Tustin,” he said. “On behalf of all my employees and colleagues at Mercury, I accept.”

Applause erupted. Whistles and catcalls.

And taking a sip of champagne, Kirov thought, Screw Vanderbilt. Fuck Mr. Gould. I’m a Rockefeller now.