Ling: The Rise, Fall, and Return of a Texas Titan
What was most remarkable about Jim Ling among the great players of corporate games is that he invented his own. And it worked for a while. In fact, he convinced some of the smartest people on Wall Street that he had a foolproof way. It has been more that 25 years since Ling strode the scene as creator and CEO of Ling-Temco-Vought, once the 14th largest corporation on Fortune's 500 list. When the financial magic he used wore off, he was ousted from the helm. They even changed the name to plain LTV to get his name off the facade that wound up as a bankrupt steelmaker.
Without any education beyond high school in Oklahoma and electrician's training in the Navy during World War II, Ling discovered a way to create free money for a while. He called his series of acquisitions and spin-offs Project Redeployment, which made it sound like something grander than it proved to be. But while it worked, it was dazzling, even compared with Michael Milken's rediscovery of undervalued, high-yield (junk) bonds. Unlike Milken, a convicted felon, Ling was a man of integrity whose worst trouble with the law involved a minor regulatory matter. He believed in himself and his venture so thoroughly -- and wrongheadedly -- that he kept all his own and his children's money in his company's stock and was wiped out.
The trouble with financial games is that they are easier to play than focusing on sound management and products, and they are surely more fun to watch.
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Though never confirmed, it is likely corporate raiders such as Carl Icahn and Henry Kravis read this book and took from it lessons they use to this day. Jimmy Ling discovered and mastered the art of robbing Peter to pay Paul in the world of corporate finance. It is known that Harold Simmons, one of the most private and feared corporate raiders in the 1970's and '80s, built a $4 billion empire based on the lessons he learned from Ling. Though there is no love lost between them, Simmons at one time idolized Ling.
This book offers an glimpse into the world of strategic mergers and acquisitons, and serves a s a lesson in how the credit and equity markets are supposed to work. As in any market, the US financial markets are wrought with inefficiencies and billions of dollars are made every year by exploiting these quirks. Ling just happened to build a multi-billion dollar empire based on the market's predicted volatility. He also lost everything under the same premise. Perhaps his trials and tribulations laid out in this book were his payback for pilfering the pension funds of the companies he acquired. At some point, many of us have felt the financial consequences from the actions of people such as Ling. This story of this Texas Titan reminds of the fact that there is no free ride in life.
It is the American dream for someone to start with nothing and then build an empire that controls thousands of jobs and contributes millions of dollars to the gross domestic product of the USA. The story of Jimmy Ling is just one of the great stories of how one man lived life to the fullest and made the most out of the opportunities afforded him. Good or bad, rise and fall.