'Shortages, don't I love 'em', Ed confides to his diary, 'it's great having customers ring up begging for parts when the bastards are usually cancelling orders or trying to re-negotiate the price downwards.'
'Last week I ordered a 40% price hike across the board - now all I have to do is sit back and watch the shekels roll in.'
A few days' later, it's not looking quite so easy for Ed.
'The VP for sales and marketing came storming in this morning to say our two biggest customers had told us to go stuff ourselves,' writes Ed.
"'Which idiot said our prices are going up 40%?" the VP stormed.'
'"This idiot", I told the VP, "everyone's doing it. Prices are up across the industry."'
'Yes but you don't do that to your Tier One customers," ranted the VP getting a bit shouty and stressy, "Yes, you put up the prices for the products going through distribution, Yes you screw all the little guys, but No, you don't tell your Tier One customers you're going to shaft them now supply's short. Or not unless you're a complete bloody idiot."'
'"So what do you want me to do?"'
'Get on the blower and grovel. Kiss ass. Tell them it was a mistake. Say some idiot screwed up - that would be the truth. Offer to fix their prices for the next six months. But for God's sake get them back," shouted the VP.
'Oh dear' writes Ed, 'sounds as if I over-played this one. Still, it's only 137 days to the IPO and then I'm off to the wide blue yonder with sackfulls of spondulicks.'
I think Ed's brilliant! I look forward to his entries all week. However, it strikes me that he fits better, perhaps, in the Telecoms Network Operator chain of command rather than a hi-tech manufacturer.
Is this merely a device used so that we can watch the IPO slide inexorably south?
Not that I'm bothered - he's great fun to watch. It would be even better if I didn't know folk just like him... and could relax in the knowledge that this isn't quite so true to life.
Nevermind. I've got his next entry to look forward to...
Thanks, Another Dave, I think Ed will comtinue to live down to your expectations
Ed would be more amusing if I hadn't worked for him (under several other names) and had to survive his "brilliant decision making".
I do wonder how they ever got into upper management. Obviously, it was through politics and not managerial ability!
What gives? The IPO date just slipped a month.
Is this just another of Ed's plots?
Well spotted Lynn, Ed should have said 137 days. Among Ed's deficiencies he is numerically challenged - but this I think was the scattiness of stress. I have, on Ed's behalf, corrected it.
Yes indeed George, How do they get there? I've often wondered.
Well done Ed!
Ed you're truly a putz. Learn the game!
If you have an up coming IPO you need the Tier1's to help with the window dressing.
What you do is explain that fab supply is very tight and their competitors are begging for allocation BUT out of respect for the relationship you Would divert some of your other customers allocations their way.
What they need to do is show confidence in your company by purchasing the chips at a new price of triple the old price. That's right a 300% increase. In consideration for this support you will issue the Teir1 company, Engineers and purchasing managers with one stock warrant, in your up coming IPO, for each $100 parts they purchase.
Explain how the trading price of the stock will be enormously inflated by the huge increase in Revenue and Earnings that accompany a 300% AUP increase. So their $1 strike price warrants will be easily worth $50 at IPO.
Now you just sit back and watch as a teir1 customer triples their unit orders and "warehouses" your product. Taking everything you can possibly deliver, regardless condition, doesn't need to meet all parameters, actually doesn't even need to contain a chip!
Extra points for anyone who can remember the dotcom era company that successfully executed this IPO strategy.
BTW ED: You need to get a good lawyer to work on the language in the warrant contract, OR otherwise you'll need a great lawyer to work on your SEC fraud defense...
Are you leading Ed astray, Robert? That's super-impressive stuff but Ed's bound to make a hash of it if he tries to do things that way, and he'd end up inside. I wouldn't wish that on him.