Free Power Down by Ben Coes Page B

least eight feet long. Four flat screens shone with spreadsheets and colored, fine-print numbers and figures.
    Derek Langley was a thirty-two-year-old trader for a hedge fund called Passwood-Regent. One of the two phones on the desk rang.
    “Langley,” he said as he picked up the phone.
    “Hi, Derek. It’s me.”
    “Alexander,” said Langley. “Hi.”
    “How are you?” asked Fortuna.
    “Super, thank you, sir.”
    “Are you ready?”
    “I am.”
    “As we’ve discussed, I want us to begin aggregating within U.S. energy equities. I want us to buy KKB and Anson, but not a lot, perhaps one hundred and fifty to two hundred million dollars’ worth. The rest I want in direct competitors; electricity suppliers, distributors, especially in theeastern part of the U.S. Put at least half and up to two-thirds of Passwood-Regent assets into KKB and Anson Energy competitors.”
    “Yes, sir. Understood. Southern Company. Duke Power. ConEdison. Entergy.”
    “Exactly. Start buying oil stocks, too. Use whatever long instruments you feel most appropriate; calls, options, swaps, swaptions, whatever. Nothing that will be too hard to get out of. Lever it up. Press your margin. I trust your judgment. I assume it’ll be predominantly straight block trades.”
    “Yes. I think we can accomplish this without having to do anything overly fancy.”
    “I want you to make some commodity bets. Allocate at least a quarter billion to oil futures. Currency too. I want us to short the hell out of the Colombian peso. At least two hundred and fifty million.”
    “Got it.”
    “Finally, most importantly, I don’t need to tell you this, but—”
    “Don’t aggregate more than five percent of any single company.”
    “Precisely. We don’t want to file a Thirteen D. Don’t go anywhere near it.”
    “Passwood will not own more than five percent of any single company. We won’t need to.”
    “Good. The announcement was a few minutes ago. Did you see it?”
    “I did, sir.”
    “How much do we have in the different Passwood-Regent accounts? I’m including any current long positions, which you’ll have to get liquid.”
    “That’s already taken care of. As of last night, we have approximately three point six billion dollars liquid, sitting in cash.”
    “Invest across the Passwood-Regent entities. Use them all. Spread this around. Don’t place too much in any one trade. Self-impose at twenty-five or thirty million dollars per trade. Ideal trade size would be twenty million dollars.”
    “Got it. How much time do I have?”
    “Twenty-four hours.”
    Langley’s receiver went dead. He smiled and took a sip from his coffee cup.
     
    _____
     
    The morning after the announcement of the proposed merger between KKB and Anson Energy, Langley went on a $3.6 billion buying spree. Working feverishly, camped out at his office, he quickly established a series of positions in companies that were direct competitors to KKB and Anson, in oil futures, and in shorts against the Colombian peso. By the end of the trading day, Langley had executed more than 150 trades across fourteen separate Passwood-Regent entities, none of them U.S.-based. About a quarter billion dollars went toward the purchase of KKB and Anson stock.
    Fortuna repeated his phone call to Langley twice that same day, once to a young female trader named Orieshe Yang in Hong Kong, at a hedge fund called PBX Fund; the other call to a Wall Street fund called Kallivar, and a trader named Sheldon Karl.
    By evening, on three different continents, across three different hedge funds, more than $8 billion had been invested in companies that were direct competitors to KKB and Anson Energy. More than a billion and a half dollars had purchased a smorgasbord of oil contracts. At least half a billion dollars lay in a variety of trades betting the Colombian peso would drop in value.
    To make it appear they weren’t excluding anyone, half a billion dollars sat in either KKB or Anson Energy stock.
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