The next week, after the cash from her cryptocurrency, was safely in her cash-holding LLC, Cat visited Dione in her office. She found the studio CEO buried under a pile of applications. After being admitted to the office, she found Dione furiously typing on her computer.
“Wow, business is booming,” Cat whistled as she picked a sheaf of resumes and looked at the info. Most girls were barely eighteen.
“Not as much, and that’s not a good thing. These girls don’t understand what camming means, they just want to be the next Catherine Wallenstein. They want a piece of your infamy. And worse, if I reject them, they’re going to the studio next door who will introduce them to escort services. I’ve seen a lot of girls getting hurt when a patron gets too handsy. Even if I refer them to reputable studios, this is a flood.”
“Not all of them will work for other studios. As you said, they want to work for you because of me.”
A distraught Dione stopped working on her computer and faced her. “Catherine, these are basically walk-in applications. I was processing the online ones right now. These girls are from Nevada and neighboring states. Job agencies are contacting me all the time because they want their referral bonuses. Do you think they’ll let the naive girls go just because I turned them down? No. They’ll convince them to work somewhere else, somewhere where there’s an incentive to pay more to headhunt fresh meat.”
Cat frowned, “I’ve seen the damage a naive eighteen-year-old girl can suffer from sexual predators, Dione. In the flesh.”
“I’m sorry.”
“I survived. Sort of. Anyway, what is your idea here? What can we do?”
“Not much. I can take ten or twelve new girls, but that’s the limit. We don’t have enough rooms for all of them and the veterans will be pissed if I take some of their shifts to give to the newbies. Not to mention that new girls usually are a loss in the first few months. They just don’t earn enough tokens to pay the studio expenses.”
“But you keep them anyway in case they became a high-earner later on. Which leads to my reason to be here.”
“Are you quitting?” Dione held her breath, waiting for the answer. Not only Cat earned high tips from her Wall Street sugar daddies, but her hours also didn’t clash with the other girls that fought for the night shifts.
“No. I literally cannot quit. I originally came here to negotiate a new room for me but now, I think we need to go big. Say, are you willing to take in an equity partner? Sell a share of the studio to an equity partner?”
She could tell by Dione’s face that she didn’t. “Who?”
“Me. How much would it cost to double the studio, how long would it take, and how many girls could we take in?”
The two negotiated a lot on the terms of their partnership and finished the first meeting without a clear decision whether to go forward or not. It wasn’t that Dione wasn’t against having Cat as a partner but the myriad of details regarding the expansion. Preferably they would buy property right next to or near the studio, then the renovation costs, the furniture, equipment, etc. Each room costs at least thirty thousand to decorate and prepare and depending on the theme and necessary items it could go to almost a hundred thousand.
It would take almost a year and around two or three million dollars to get the new studio up and running if they were to build it from scratch.
Cat had an idea that was shot down by Dione right away. She suggested they hosted an audition (with clothes on!) for the girls, to see which ones had the most potential. Dione rejected it because it would mean bringing them to Vegas and then making sure they returned home safely. The soft-hearted CEO couldn’t bear the thought of losing a single one to the City of Sin.
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She didn’t stream the next day. Instead, she stayed in the studio apartment and called suppliers of prefab homes and contractors, as well as real estate agents to see what was for sale in the region and get a feeling for prices. Housing and construction prices went up because of the riots and so did the wait to get any construction or renovation done. She also posted an ad to recruit video editors for her new Youtube channel. This too would start at a loss until she could monetize her content. After giving it some thought, she also set out to hire a manager to delegate stuff to.
She wished to hire a manager to manage the applications because, within minutes of posting the ads, she got hundreds of messages. And the ads didn’t disclose it was her hiring.
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“What does she knows of hiring editors or managers? You’re just lonely.”
“I’m going to select twelve of these applications and ask them to show me some work they did.”
She’s been stingy all day long. Cat was getting impatient. “What’s your problem?”
After a little coaxing, the ghost spilled the beans.
Cat took a mirror from a drawer and looked into it. “Are you serious?”
“That’s sort of what you do ever since we died.”
She didn’t like the idea. She didn’t like Jack in a romantic or sexual sense. It was all the ghost’s teenage delusions. But she could spare a day for the sake of cooperation. “Fine. But I’m not dating him. Keep your spectral obsession platonic. That’s how far I’m willing to compromise.”
Her phone beeped. She checked, it was the SPAC sponsor group. Some of them were issuing one-year call options on the post-merge company stock and wanted to know if someone wanted to buy them.
“Motherfuckers...” Cat groaned.
“They’re putting pressure on the merger vote. See? The options are selling for two dollars for the right to buy the stock at fifty dollars next year if the merger passes.”
“No. Not good at all. The devil is in the details, uh, sorry. They bought their shares for ten dollars. Now they’re getting two dollars back just by creating this derivative. And they might sell their stocks at fifty dollars a year from now. Now, if the price a year from now is less than fifty dollars, they keep the share and the two dollars because the option buyer would be stupid to exercise his right. So they earn two dollars if the stock price doesn’t go up by five times. Now, if the stock price is above fifty dollars, the holder of the option will exercise the option and buy the share at the lock-down price and could sell and profit immediately or hold the stock and see if it would go up or down. In this case, the issuer of the option would get his fifty-two dollars for the share he paid ten, and that’s it. But he was certain he would get these fifty-two dollars at no risk.”
“Fifty. The two dollars paid for the option are a sunk cost. You can’t get them back unless you sell your option. For the holder of the option, the price of the derivative doesn’t affect his decision to either exercise or not the right. And the option will always be worth less than the stock. Because there’s a hidden catch. See if you can figure it out.”
Cat laughed, “That’s it. Now, can you see why issuing these options right before the merger vote is wicked? The same guys that sold the options can just vote against the merger and get their escrow money back, plus government bond interest, minus expenses, earning twenty percent in half a year over their investment without risking exposure to the market.”
“Three kinds of people. The optimistic, the gambler, and the guy who knows something the others don’t. But I think it’s a trap. Five times in a year? That’s something only a few SPAC like Virgin Galactic could pull off. They would need a ridiculous amount of market hype, and we are in the middle of a nationwide crisis. Everyone is hedging their bets. Including these guys, because the twelve-month validity of the option is also the same period of the lock-in. AH! If someone exercises the option before the one-year period expires, they can’t sell their shares! They have to go fish in the market for non-sponsor shares, as we will all be locked-in with the merged company.”
“They won’t sabotage the merger vote, they’ll all vote for. The motherfuckers are laundering money. Because imagine I’m one of these guys, and I have a lot of dirty money. I give this money to some stooges and issue my call options. I sell them to the market, and I don’t know who holds them. But my stooges will go and acquire these options, mostly from a second-hand source. Then they exercise the options, and I buy the stocks in the market and sell them at fifty dollars to the stooge. Now, the money I received from the option is clean. The stooge will sit on the stock and later even sell it back to me if things cool down and they don’t get caught. I might even take a loss, but money laundering is expensive.”
“Not much. If the merger doesn’t happen, we get our money back and we need venture capital. If the merger happens, we already know there will be pressure to appreciate the stocks to something closer to fifty dollars in a year. This means our seven and a half million dollars will become thirty-seven and a half a year from now. Not bad. In fact, this is even an incentive to keep my mouth shut and not blow the whistle, but that will be impossible because we know our three-lettered friends are listening to everything.”
“Kelly Parish? I’ll give her a call after the merger vote. No use pointing fingers now, and if this is really money laundering, we have until the options are exercised to report. Blowing the whistle may harm our bottom line, but it is the right thing to do. It’ll crash the stock price. And we can’t even short it because it will be insider trading.”
“I’ll do a phone interview using a male voice synthesizer program, and ask for references. I think I can figure out the liars and then we’ll hire some of them. If they can’t do the job, we fire them and maybe lose some cash. There’s no need to worry. We’ll need to buy computers and video editing software licenses. Or see if there’s a good open-source option. And if you want to call Theresa just to hear her velvety voice, we can do that too.”