Burning the Midnight Oil

Friday 9:00 a.m. - 2:30 a.m.
Saturday 10:00 a.m. - 1:30 a.m.

Things have been really busy, and I feel bad for not keeping up on my blog daily because there are so many minute details that would be important to include in the blog that over time I tend to forget because I get so busy doing other things.

Let me start by explaining that I have a routine each morning. For those of you who know me well know that I am kind of neat freak. Well, when things get really busy at nights I don't have time straghten papers and organize my desk. I usually end up cleaning up the aftermath the next morning.

I get in and I start deleting unimportant email. Twice I have exceeded the limit on email capacity. We only get so much storage and it builds up fast. After I go through prior day emails, I clean up and straighten my desk. Junk papers that are old copies, have the latest and greatest in front of me. I then like to read a little bit of the financial news. Most people are just showing up about 9:30 - 10:00 things don't really get humming until about 11:00.

In the afternoon I double checked my comps that I had spread and then met up with an associate so he could check them too. The most frustrating thing was that I waled away from my desk thinking, "okay, I think this time I have it. I have double checked my numbers and am good to go." When I met with the aasociate he found a couple of errors.

Right now we are working on a presentation that is due Monday. We are presenting an M&A model to the management team of a public company. On Wednesday we will present to the Board of Directors. Apparently the Board is anxious to get this process underway and there shouldn't be too much selling that the MDs have to do. Once the Board approves our plan, we start looking for buyers. One buyer has already shown interest. The senior bankers will determine the value of the interest and who knows, I might get to be apart of the M&A process from start to finish in my summer internship. It looks like this could be a fast process.

Saturday I came in and worked with the analyst on the presentation. Here is what I had to do: (1) make a slide that showed the targets top 10 shareholders and top 10 institutional shareholders (2) then I had to look through quarterly press releases to find what the company's outlook was on revenue. I took the information I found there, coupled with the actual revenue results and made a graph for the presentation.

After that, I had to find information on about 15 companies for comparable analysis. The metrics I was searching for were: '08E Revenue, '08E EBITDA, '08E Gross Margin and Operating Margin, Market Cap, Enterprise Value, Cash, Debt. So I searched through research reports, and also used a database called factset. I got the numbers, plugged them in, and reported to the analyst. Here is where the frustration occured. I really wanted to face the analyst flawless. It builds the trust I want analysts to have with me. I checked and rechecked both formatting and numbers. I thought I was looking pretty good.

So I went in and he started checking my numbers. He said, "Am I going to find any mistakes?" I said, "I hope not because I really checked all my numbers." He started going down the list checking things and come to a point, "Where did you get this number?" I was right on top of things and gave him all the information printed out and highlighted. He checked the number USING THE SAME DATABASE I USED (factset) but at a different location within the databases and the numbers were different, "Dude, all these numbers are wrong. Where did you get this information?" I was a little sutnned because it was right infront of us, highlighted. "Right here, man, I got it from the same place you did, here let me show you on Factset."
"I don't have time for this. You gotta get your numbers right."

"I want nothing more than to get my numbers right, but if they are not right where I found them, what makes them right where you pulled them if they are from the same database?"

"Just pull them from here from now on."

And off I went. It's frustrating becasue I did this exact thing for a analyst 2 weeks ago and he sent me to the location on Factset that the other analyst was saying was wrong. How am I suppose to know what to use? Now instead of keeping track of where to find the information, I additionally have to keep track of who I am looking for and where they prefer the numbers to come from. If you have ever read Monkey Business, you know as I now know with a certainty that some of this stuff is ridiculous.

We continued to work all night, he would give me tasks, I would return with results. I would watch him plug away at a model and I realized how tedious you have to be. Management gave us numbers and we had to take those numbers and their model and manually plug into excel and replicate what they gave us. I foud myself going back and forth between research, the comparables 10Ks and 10Qs and excel and powerpoint.

Something else I want to mention is most of what we do is already there for us. I know that sounds vague, but let me explain. Its not like the AS approaches us and asks us to build a 40 page deck from scratch. What usually happens is the AS gives us guidance by say, "A projected name Such-and-Such once did something like this, see if you can find it." Then we use that outline. Same thing with modeling. Emails are sent throughout the whole office sometimes that say, "Anybody know where I can find an M&A model with multiple acquirors?" And then someone responds with, "Yeah, check this folder." So I ask myself, reflecting back on what I thought about banking, "what do bankers spend their time on if they are not constantly building things from the ground up?" The answer: fine tweeking and updating. At least at the analyst level, and at least at this office. Not much is spent on the finance.

For example, this is kind of funny. This AS and AN have been working on a Accretion / Dilution model and the results showed all the companies being dilutive. I hear the analyst ask the associate, "Why are all of them dilutive?" The associates response was classic, "Oh, I don't know thats weird [long pause] anyway, we need to make it look like this..." I said in my mind, "Are you kidding? These guys are supposed to know everything, but they can't figure out why every company is dilutive? That seems pretty basic. I picked the wrong major. I should have done graphic design."