Betrayals and Surprises
by Lady Trader | Fan Fun with Damian Lewis | June 1, 2018
Don’t you think I know what I’m doing
Don’t tell me that it’s doing me wrong
You’re the one that’s really the loser
This is where I feel I belong
Snowblind – Black Sabbath
Hello, and happy Friday from the Trader’s Desk! This week, we see Axe looking for “Redemption”, and it’s twofold: the $1.5 Billion Andolov is redeeming from his investment in Axe Capital, and Axe trying to find his own salvation, after almost selling something worth more to him than his soul – a piece of his firm!
After last week’s episode, Axe thinks he’s all good. He’s got his “Icebreaker” in Grigor Andolov and his $3 Billion investment. He’s so relaxed he can take time out from his cap raise to play tennis with Maria Sharapova. However, Andolov gives it, and he takes it away.
He is pulling half of his investment out of Axe Capital. He has a better opportunity, a Russian oil deal (figures!). Axe has to act as if he is not worried, but we can see him sweating, and it’s not just because he got beat by Sharapova! Axe (and most funds) have a minimum amount of time before an investor can redeem some or all of their funds. Axe didn’t put that restriction in for this deal, and now he’s paying for it. I seriously doubt even if it was in the contract, Andolov would have complied. He doesn’t seem like someone who cares for or follows rules.
This redemption puts the cap raise in jeopardy. As Wags and Taylor say, this decrease in Assets Under Management (AUM) will look two ways to the Street: a pull of funds (a loss of confidence) or a loss due to bad trades/investments. Neither scenario will put Axe Cap in the best light for a cap raise. I still don’t understand why Axe feels the need for this huge raise in such a short amount of time. Axe is trying to project to the Street that he (and Axe Cap) is still the big gorilla, but is he really? If you need to do things that go against who you really are, what are you?
Taylor is not happy that once again, they are being left out of the loop of info. The trust in the Axe/Taylor relationship has been deteriorating all season. I don’t think Axe ever 100% trusted Taylor (I don’t think he trusts anyone 100%); but I do think Taylor trusted Axe, even when it went against Taylor’s own judgment. Yes, Axe trusted Taylor to run the firm when he couldn’t trade, but that was because he had no choice (and basically undermined Taylor with the whole satellite shop scheme). If you don’t have trust in a relationship, only bad things happen.
Wags comes up with an “unpalatable” idea: a middle man for all kinds of money, from the Middle East to dictators, Frotty Anisman. Why is dealing with Frotty (who I’ll admit, is gross) a bad idea, but dealing with a Russian oligarch is not? I have no idea, but I’d rather deal with a schlub than with a Russian mobster!
Next idea: bring in the satellites; but that’s a no go as well. Axe is still a bit paranoid – those funds will be his escape hatch in case the government ever comes a calling again!
Third time is a charm! Idea number 3: bring Raul and the police pension fund back to the “mothership” of Axe Capital.
There are no burgers on the menu this time; it’s ramen noodles Axe will try to use to get Raul and the pension money back into the fold (that and his crypto piece of Panay’s fund!). It seems the noodles don’t do the trick as Raul and the Board like things the way they are – nice and quiet. Raul is a pal, so with the prospect of getting a cut, he’ll make some calls to other public pension funds to see if he can get them to Axe Cap.
Axe has got to know this is a dead end. Public pension funds (police, firefighters, teachers, etc.) don’t usually go near a manager that even has a hint of scandal. Add that Axe’s 9/11 play is still in the memories of first responders, it’s no surprise Raul doesn’t come through. This shows how desperate Axe is, and to what lengths he’ll go to replace Andolov’s funds. Even Raul mentions how desperate Axe seems. Raul doesn’t come through with funds, but does give Axe some much needed advice: Stop looking back, and start looking forward. Axe needs to change how he does things. With that in mind, it looks like the unpalatable, just got palatable!
Taylor would like to help celebrate a successful business venture with Oscar, so who better to ask to hook them up at NoMad than Axe? The problem is, Taylor sees it as just asking for a favor; Axe sees it as information. And, we all know Axe is at his best with information. He’ll take this little nugget and file it away for a future date. Everything (and everyone) is an opportunity for Desperate Axe.
Wags and Axe meet Frotty at a seafood restaurant on City Island. The description of Frotty does not disappoint. However, what he lacks in table manners and fashion, he makes up with knowledge and connections. He knows right away Axe must be desperate if he is willing to meet with him. He can offer Axe Jordanians to become passive investors for a 20% stake in Axe Capital. It is shocking to me that Axe is even considering something like this. He has always been proud he was “self made” and was his own man.
Frotty goes too far with asking that his name be added to the firm.
“It’s going to stay Axe Capital until they drop me in a hole and toss the dirt in.”
Frotty is willing to drop the name thing (I don’t think he really thought he’d get it, but it doesn’t hurt to try!). Instead, he wants Axe’s “glow”; he wants Axe to attend his conference and sing his praises. You know this is something Season 1 Axe would never do. Season 3 Axe is a different animal. He agrees (begrudgingly) but with his own condition – an option to buy out Frotty and the Jordanians in 1 year at a 40% premium. It’s ridiculous for Axe to know he will be able to pay that amount, but the deal is made. He is doing everything Bobby “Fucking” Axelrod would never do to stay Bobby “Fucking” Axelrod!
The meeting on City Island of course makes Axe late for Gordy’s birthday party (Axe will probably never be Dad of the Year!). But, maybe being late is fate: Bruno is in the kitchen (who has their own pizza oven??) making pies. Perhaps a reminder of where Axe came from is just what he needs, and Bruno is the perfect reminder.
“Friendship should always stay clean”
I don’t know if Axe ever felt that way, but I do think he is not happy about some of the bridges he has had to burn on his way to becoming “Master of the Universe”. Other bridges, I don’t think he even cares about.
Axe asks Bruno how he started and maintained his business without taking “mob money” when everyone else in the neighborhood did? Bruno is a man of honor and integrity. He knew if you take that kind of money “you are renting out 100% of your own ass”. Bruno worked his tail off and scrapped the money together so he and his family could look at themselves in the mirror with pride. Can Axe say the same?
Taylor, Oscar and Genometech Atlas founder Peyton Breen are celebrating at NoMad. Oscar has funded Breen’s healthcare app, and will reap the benefits when the company starts to monetize the product. Taylor is so happy to be a part of this aspect of Oscar’s life. Oscar and Taylor are such a great couple! When Oscar tells Taylor “You’re incredible”, the look on Taylor’s face is almost like that is the first time anyone has ever told them that. We know that can’t be true, but it is coming from someone Taylor cares for, and that makes all difference.
As they wait for Frotty to come in and sign the agreement, Axe comes to a realization: if he never took Andolov’s money, he’d never be in a situation where he’d have to deal with the likes of Frotty. Taylor and Wags say nothing, but the “I told you so” is loud and clear from both of them. Before they go to sign the papers, Taylor lets it slip that the evening at NoMad was perfect, but also that Peyton Breen was at the dinner. Again, this is just a thank you from Taylor, but info for Axe. If Axe is willing to sell himself to raise capital, you know he’s willing to sell anyone else, Taylor included.
At the last minute, Frotty wants to change the terms of the deal. Now, he wants access to Axe Capital’s trades. As a trader, I screamed at the TV “get the fuck outta here!” I would never give an investor that type of info; they will either try to front run you (I had an ex-client do this), or piggy back off your hard work and research. Your strategies are your intellectual property (IP). It’s a step too far, and Axe starts to show a little of the Axe we know and love.
Frotty thinks he has the upper hand because he was dealing with Desperate Axe on City Island; he is now dealing with Bobby “Fucking” Axelrod. Axe has money, a big firm, and sons who “think I can fly”. What does Frotty have? What Axe thinks he needs: “More”. Maybe Axe doesn’t need any more, or at least not this way. Bye Frotty! Don’t let the bagel hit you in the ass on the way out! Axe has a replacement idea, but it’s a heart-breaker.
Taylor sees that Axe Capital transferred $200 Million to Genometech Atlas! The only way that would have happened is if Axe used what Taylor said as a thank you to do this.
By getting Breen to break his deal with Oscar, Axe Capital will now benefit when the stock goes public on the NASDAQ with a valuation of $2.4 Billion, and in the process screw Oscar. That doesn’t matter to Axe: the additional $1 Billion of value that Genemetech brings, along with $800 Million in gains for the month has covered Andolov’s redemption. But, at what cost?
Read the rest of the original article at Fan Fun with Damian Lewis
Taylor’s relationship with Oscar is a price Axe is willing to pay. To rationalize it, he tries to blame Taylor. She was the one who told Axe they were meeting with Breen. It’s total bullshit, but it’s not the first lie Axe has ever told to skirt his responsibility for his actions.
He somehow thinks by telling Taylor how much money they are going to make at bonus time, it will ease their pain. It’s so callus. Axe also says he’s sorry, but Taylor knows he is not (and so do we). And, if he follows the advice he gave Wendy “don’t feel guilty about doing something that puts you in charge”, Axe will forget this betrayal in the blink of an eye.
Taylor has seen how Axe operates; they know he is ruthless. However, when Taylor is the collateral damage, I think this will change everything for them.
Taylor meets Oscar to tell him what went down. We don’t see the discussion, but I’m speculating it was a break-up. Taylor is walking the streets despondent and heartbroken. If it’s not a break-up, Taylor just may have to choose – Axe Capital or Oscar. Oscar’s business is venture capital. Taylor was so happy to be a part of that aspect of Oscar’s life; would Oscar be so open to that continuing if he has to worry about Axe trying to undermine his deals? Add this to the list of reasons I do think Taylor will be leaving Axe and his ways behind.
Taylor goes to the only person they feel comfortable braking down in front of: Wendy. No words are spoken in the scene, but the pain, anguish and heartache are so vividly conveyed by Asia Kate Dillon! Wendy holds Taylor to comfort them. Wendy doesn’t know exactly why Taylor is upset, and I wonder what her reaction will be when she finds out.
Axe is having dinner with Andolov and his extended family (who knew wives and ex-wives could dine together?) at a Russian restaurant. Andolov was playing with Axe; he pulled his money as a test to see how Axe would respond, and Axe passed with flying colors. The $1.5 Billion will be going back to Axe Capital, and because he’s such a good guy, Andolov will give Axe a heads up the next time he takes his money out. Axe crushed Taylor, and he didn’t even need to. How much longer will Axe continue to be Andolov’s marionette?
Andolov sings the praises of his mother, and Axe realizes Andolov is the boy in that creepy story. And, he realizes the sacrifices she made to protect her family and never complained. Is it all that surprising the next thing we see is Robert knocking on his Mom’s door?
We have all wanted more back-story on the life of Robert Axelrod. Something tells me we may just get our wish!