Thursday, December 20, 2007

Expletives Deleted! Tapes Erased! It’s Conference-Gate!

“How (inaudible) is this? Steve, let’s go. There’s no questions, let’s get the (expletive) out of here.”

—Al Lord, CEO Sallie Mae Corporation

Call Woodward and Bernstein—it’s Conference-Gate!

That’s right: the official replay of Wall Street’s most famous conference call has been tampered with!

I am not making that up.

In a cover-op worthy of Nixon and his Watergate-era tape-erasing scandal, the best part of yesterday’s Sallie Mae conference call—CEO Al Lord’s above-quoted “let’s get the (expletive) out of here” which even the Wall Street Journal highlighted in this morning’s article on Lord’s melt-down—has been deleted.

That is a shame, because yesterday’s call ranks right up there in the upper pantheon of our Patrick Awards, whereby NotMakingThisUp semi-regularly awards Wall Street’s Finest and Corporate Bigs alike for whatever strikes us as particularly outré commentary, in a realm where outré commentary is generally the norm.

In fact, the Sallie Mae call will probably go down as one of the Top Ten Train Wrecks of All Time.

Get a load of this:

Bill Cavalier—Société Genéralé

Can you talk a little bit about the pass-through market? Clearly, there is pretty much no appetite for student loan paper at this point. What are you being told about when you think there will be a market for your pass-through notes so that we can start to do some….

Al Lord—CEO

I’m not sure what you’re talking about. I’ve been talking to whom?

Bill Cavalier—Société Genéralé

When you do a securitization, right, you have a bank that arranges -- that actually does the arranging, right, you have an arranging bank. Somebody must be telling you something about what the market is looking like, what their expectations are for next year…. We're trying to put together projections here, Al. We're trying to figure out what your stock is going to be worth, and you have got to give us some guidance, you've got to give us some numbers. I don't even see a margin number here for the stuff that you've done. Can you give us some handle on what your stock is worth?

Al Lord—CEO
You should give Steve [McGarry, IR guy] a call.

Bill Cavalier— Société Genéralé
But you’re the CEO. You’re the guy who just took over the company.

Al Lord—CEO
Yes, that’s exactly right, I’m the CEO. You should give Steve a call. Next.

Nothing on paper, virtual or hard copy, can replicate the angst, anger and frustration projected in those words as spoken by Mr. Lord and the investors and analysts asking questions: it must be heard to be believed.

Unfortunately, the Big Moment—Mr. Lord’s final blowing-off of the accumulated pressure as head of a company caught up in both the highly public collapse of a private equity transaction of its making and a credit crisis not of its making—no longer exists.

That’s right.

Mr. Lord’s “How (inaudible) is this? Steve, let’s go. There’s no questions, let’s get the (expletive) out of here” has been erased from the conference call replay.

Both Haldemen and Erlichman would be proud.

Jeff Matthews
I Am Not Making This Up

© 2007 NotMakingThisUp, LLC

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations. This commentary in no way constitutes investment advice, nor is it a solicitation of business in any way. It is intended solely for the entertainment of the reader, and the author.


cadamyale said...

He also commented that everybody attending the analyst day in January should show up early because they would be requred to pass through metal detectors.

Michael said...

...metal detectors. Lord was rambling about metal detectors being present at the shareholder meeting in January.

Comedic irony given that he just might be the most disgruntled shareholder out there after ~97% of his options stake (1.25m shares) was sold out below 30 on a margin call.

CurmudgeonlyTroll said...


He gave off a very defensive and bad vibe. But isn't it a ***ed up question?

'What are the credit markets going to look like for you next year?'

What was Lord supposed to say? 'The banks adore us and assure us the markets will return to normal?'

A Mozila-like statement that everything was hunky-dory would have elicited equal derision.

Just classic.

tobias said...

This site saved an mp3 copy of the call before it was doctored. The whole call is priceless, but the expletive in question occurs around the 26:40 mark...

matt said...

Almost makes you wonder now how long HE will stick around as CEO...

Anyone wanna put out some over/unders?

PS..well done on the call save.

alex said...

I agree with curmudgeonly. The guy was under pressure , He personally lost a ton of money and is stepping in to do daily blocking and tackling in a hostile environment when he expected to be a statesman playing on the private golf course he's building.
However, he knows the business and if I knew him I'd advise him to submerge his ego, get a bunch of options at this stock price and get back to business. He'll make another fortune in short order.

Goldenpiggie said...

I see someone beat me to it! Kevin Depew of Minyanville has the foresight to save the file for posterity.

Someone should make a rap song out of that conf call.