How Realistic is the Finance in Suits? Ex-Banker Reacts! #Finance

what’s up everyone if you’re new to ra liquid my name is Ben and I used to work at JP Morgan as an investment banker now suits as you probably know is a TV show about lawyers but in season 3 episode 4 investors and bankers are involved because of a financial transaction and so

I’m going to be reacting to the episode and at the very end giving it a grade for how realistic the entire episode is all right so my laptop is over here so I’m going to be watching it and let’s watch the first clip yeah would that not be like you heard I heard votes in 48 hours

she’s not losing that vote all right so to First provide some context for this episode Pearson Darby is a law firm whose client is hessington oil which as you saw from this scene is undergoing what’s called a hostile takeover a hostile Takeover in my opinion is a super super interesting

financial transaction in which usually an activist hedge fund or private Equity Firm attempts to acquire another company against that company’s managements teams and oftentimes border of directors wishes and instead appeals directly to the rest of existing shareholders hence

why they call it a hostile takeover now hostile takeovers can get extremely messy kind of similar to presidential campaigns like the one we have going on right now in which the acquiring firm often smears the target companies saying what a mess they are and how after the take take over the acquir

can create way more value for shareholders which is how they really try to convince them to vote for the Takeover all right let’s now go into the second scene he didn’t exactly CC me on the memo very well you want the truth I don’t particularly appreciate being muzzled I suggest

you don’t think of it as muzzled so much as keeping you out of jail for the rest of your life and what would you have me do Har take a week in St Barts because that is not going to happen I know that’s not going to happen you’re on trial for murder and because of that tender

offers been made on a company with my family name so as I mentioned during hostile takeovers the company is smeared and in this particular case the CEO Ava hessington is on trial for murder which obviously is a crazy scenario that just makes for better TV so Ava mentions that a tender offer is made

on her firm which I want to explain so in normal m&a transactions two companies just peacefully agree to merge and announce a transaction and the management and board of directors are both both usually pretty happy during a hostile takeover because the board and management don’t want the

company to be taken over the acquirer will issue something called a tender offer which is just a public bid that bypasses the board and is an offer to existing shareholders to buy out a large portion of Shares typically add a premium to the current price so let’s say $20 if

the stock is trading at $15 per share but only if certain conditions are met such as the acquir buying out at least 51% of the company to gain majority control so far I’d say pretty good use of financial lingo in this episode so far every day I keep my mouth shut our stock takes a dive and

that makes me vulnerable I get it you want to convince the world you’re not responsible for these murders so you can keep control your big oil company that is not what I said well that’s how Cameron Dennis is going to make it sound Ava you’re on trial for your life this company is

my life okay so the CEO Ava says that her being quiet is resulting in her company stock going down but in actuality during hostile takeovers the stock is likely actually to increase and this is because as I mentioned earlier the acquir offers a bid that is usually a premium to what the stock is

currently trading at so imagine if Apple was trading at let’s call it $50 per share and you heard that this private Equity Firm was doing a hostile Takeover in the news and is offering $100 per share wouldn’t you want to speculate and buy Apple stocks since if

shareholders agree to this potential hostile takeover then you can just buy a share for $50 and then sell it for $100 which Nets you a $50 Profit right particularly in this case given that the CEO is on trial for murder there seems to be a lot going wrong with this company and so a

hostile Takeover in my opinion is likely to make the stock go up if the acquir is reputable and investors have faith that they’re going to do a good job in turning the business around now most hostile takeover investors first actually got their training at investment Banks and if you’re

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to use my code rare liquid to get 20% off and I’ll leave information and links to all of this in this CashNews.co’s description all right continuing on let’s watch the next scene what are you even doing finding dirt on gianopoulos you’re dealing with one of the most

sophisticated Raiders in the world he’s not leaving a trail for you to follow oh yeah and what’s your strategy huh so just to provide a little bit more context of what’s going on gianopoulos Holdings is the firm trying to take over hessington oil and corporate Raider is just

another term for activist investor with the most famous one you probably have heard of being Carl icon w do you want to go down the same road and have another fight or do you want to try to figure out a way that what we’ve been looking at the wrong place shitty what okay so this isn’t

really all just related to banking but I just think it’s so funny how Mike all of a sudden realizes something and then after reading one document the girl Katrina realizes exactly what’s going on and then they figure out this strategy and solve everything with just like two poster notes

on the board just so funny and just such a TV scene why you wouldn’t be doing your job if you didn’t okay so now LS is in Tony gianopoulos office and I wanted to comment here because I think the assumption is that a lot of these powerful

style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance professionals have hot young secretaries but at least from my experience at JP Morgan and amongst a lot of my friends who work in text-decoration: none;">Finance that really is just not the case and while it obviously can be possible I think licks usually don’t play a huge factor in selecting secretaries because if they’re incompetent these people are scheduling your entire life right and so you want

to pick people who are actually really good have a SE Mr lit I’ll be with you in a minute you’ll be with me yes as I said in a minute all right so we get our first impression of Jonathan Sidwell who is an investment banker advising gianopoulos Holdings and funds do often hire investment

Banks to help the process of hostile takeovers and also on the other side of things companies hire Banks to defend themselves against hostile takeovers I also want to comment that I think they did a great job in casting this Banker because a lot of senior Bank my former MDS kind of look like this

white tall and slightly balding well you know I’d ask you who you are but uh the truth is I uh I don’t really give a where the hell is Tony ganopoulos Mr ganopoulos is upstairs to get upstairs you have to get through those doors and to get through those doors you have to get through me

and you’re not getting through me all right so I love how unrealistic this dialogue is because lawyers and bankers are always client facing right and they’re serving clients and therefore they’re super professional and for the most part polite to one another so confrontation like

this would just never happen because it never helps be rude when making a first impression all the lawyers and bankers I spoke with even if they are rival Banks and opposing lawyers or something like that they were all always just very very polite well perhaps I have the key this is a

Balance Sheet from one of our subsidiaries this is nothing sorry forgot it’s a combination lock this represents a totality of ganopoulos limited Holdings you control 40% of us radio stations corn production Interstate Trucking and that’s just the tip of the iceberg

looks like I picked the right employer one problem hessington oil owns enough of those Industries to get you in trouble with the FTC so breaking down what just happened Lewis is saying

that because gianopoulos Holdings owns a large portion of Industries that hessington oil also owns and because the US doesn’t allow for monopolies acquiring hessington oil would mean

that gianopoulos Holdings would be in violation of antitrust AKA anti-monopoly laws which are enforced by the Federal Trade Commission or the FTC yeah you think we wouldn’t find that you think we wouldn’t these folders are out of date we’ve already divested into this this and this

so what hessington doesn’t have Holdings in those areas they do now and if you don’t leave them alone you’re going to be taught up with my friend from the ft DC until Kingdom goddamn come got that spank divesting means to sell off an asset that sits within a larger company and so

in this case ginopolis Holdings has seen antitrust issues coming and has sold off Assets in order to not have any conflicts then it’s a good thing Mr gianopoulos arranged an exception for us over dinner with his friend the commissioner of the FTC that’s not legal legal

yes it is is as long as we disclose it which we always do okay so the most high-profile investors are usually super super well-connected and so it’s very likely that they would know the FTC commissioner but the fact that an exception would be made is highly unlikely because if this came out

publicly which it would or could because Lewis was just told the information right so he could just speak to the media then the FTC commissioner would get into a lot of trouble so this part is definitely just for TV you think you’re the first LA to try to outsmart us we’re not lawyers

we’re investment bankers we call you for the paperwork we didn’t go to Harvard we went to warten and we saw you coming a mile away spank all right so I thought this was probably one of the funniest parts of the entire episode and I think partially it’s because I was a banker I

also went to Wharton for my MBA and it is kind of true what he is implying a little bit so Warton does have a reputation for being a very Finance heavy MBA program so people often say that if

you want to be a founder or VC investor you go to Stanford if you want to be a CEO or a COO then you go to Harvard and if you want to be a CFO then you go to Wharton with that said I find this part of the episode to be so kind of cringy but also funny and that’s why I chose this episode

basically at least from an NBA perspective Wharton is just a step below Harvard and Stanford and so while it is like one of the top business programs I would never as a banker try to rub it into a lawyer space that they went into Harvard and even for law I know that Yale is a step above Harvard and

Stanford as well but that’s a totally different point I guess what I’m saying is that it’s just really unrealistic that a banker would ever say this to a lawyer I do also want to comment that I do know that Warton undergrads are in A League of Their Own Kind of when it comes to

Finance and they’re super super well prepared probably maybe just a tiny bit more than Harvard students who are interested in

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance but honestly I think they’re just at a very very even playing field another comment I want to make about this scene and lawyers are probably going to hate me for saying

this is that I remember when I was a banker and working at JP Morgan I would work with lawyers who were m&a lawyers and so we would interact a lot and I would always think even though I’m working 70 to 100 hours a week thank God at least I’m not a lawyer because they’re

working like the same number of hours and what the lawyers had to do was just go through a lot of word talks Redline them and these like paragraphs would just be like one or there would just be like one sentence for like an entire page and you just have to like read just through all this text and

make edits to it and then like try to like fight with other lawyers about these like small terms personally that’s not for me like I wanted to be more quantitative I wanted to be working with numbers building presentations not always the most fun thing but anyway I just felt like law was

definitely not for me and so when the banker in this episode says like you know we just send you the paperwork honestly I feel like that’s like kind of true but obviously lawyers do way more than that and also especially outside of corporate law okay so that was the episode reaction and let

me know what you guys thought because it’s my first time doing one of these React CashNews.cos and I could definitely do one for like billions and Industry and succession and all these shows that I do know have some Banking and bold; color: #1a73e8; text-decoration: none;">Finance related components to them okay so now when it comes to the realisticness of this episode in general eneral I would give it a solid B+ I think in for the most part there isn’t that much that’s unrealistic in terms of the

Finance parts of this CashNews.co right the whole CEO being on murder trial while there’s like a hostile takeover coming on and like the dialogue like a lot of that

stuff does make a lot of this seem very unrealistic in a real life setting but I’ll say that the way that they portrayed the Hostile takeover and kind of we talking about it throughout this episode was in general pretty accurate but what I think really just hurts the most in terms of the

realisticness of this episode is that confrontational scene at the end that we reviewed with Lewis talking to the banker and the banker is just being shown these folders of documents and then he barely looks at them and they have this conversation and he already kind of knows everything and then

like the whole FTC commissioner having dinner and making an exception for that private Equity Firm like it all of that just really doesn’t make a lot of sense and so that really hurts things but with that said as I I mentioned overall big picture of how this hostile takeover

is kind of being portrayed I think is pretty accurate all right so that concludes the reaction I hope you enjoyed and had fun before I let you go I wanted to let you guys know about an AI newsletter I recently launched catered towards those interested in

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance and business so if you want to stay up toate with AI news feel free to check out rare candy I’ll leave a link to it in this CashNews.co’s description also I’m

working on building and launching my own how to get into investment Bing course and giving out a big discount for those who sign up early so feel free to check that out you can also buy the resume and cover letter that got me into JP Morgan I’ll leave links and information to all of this in

this CashNews.co description with that said Thank you guys all so much for watching as always and hope to catch you all in the next CashNews.co thanks guys and peace out