The Marine Corps Way to Win on Wall Street by Ken Marlin

Author:Ken Marlin
Language: eng
Format: azw3, epub
ISBN: 9781466876866
Publisher: St. Martin's Press
Published: 0101-01-01T00:00:00+00:00

Is the Timing Right?

We have an entire chapter coming up on the importance of controlling timing, but the important thing here is that Joe Gatto understood that there is a time to sell and a time to wait—and that the same is true for buyers. StarMine’s owners were ready—they had been invested a long time; the company was ready—it had grown to a level where it was clearly salable; and Joe was ready to reap the rewards of many years of effort. I sometimes tell prospective sellers that while I can’t always tell you the right time to sell a business, I can tell you the wrong time—right after the market drops or the sales growth curve slows. But other factors besides the market and revenue growth rates impact good timing.

In late 1999, the timing seemed perfect to both AOL and Time Warner to merge. Six months later that merger would not have happened. One week after Facebook’s IPO, their interest in paying a billion dollars for Instagram may have waned. The question was not only was this the right time for Gatto and his partners to sell, but was it also the right time for the buyers? (It’s not uncommon in this business to find potential buyers who might have a strong potential strategic fit and be able to afford the battle, but who are preoccupied with other things—e.g., management change, other deals, other challenges.) While we couldn’t know for sure whether the timing was right for any specific potential buyer without actually putting the opportunity in front of them, we did know the general state of the market (strong) and, as a result of our frequent interactions with many of these firms, their general appetite for deals (also strong). From that perspective, the timing did seem propitious.

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