Robert Jesenik-The Last Stand

Author of Book: David Harris
Date Read: March 1, 2024

Book Report

Title: The Last Stand
The War between Wall Street & Mainstreet over
California’s Ancient Redwoods

Date: March 1, 2024

Author: David Harris

My brother in law thought I’d appreciate reading this book and he was right! It’s a story about the little guy vs. Wall Street and traditional small town values vs. “progress” and so forth. Given my finance background, it sounded interesting and a good fit for me.

Basically this is about the history and eventual takeover of Pacific Lumber Company, a Humboldt, CA based land owner with tens of thousands of acres and lumber mills dedicated to redwoods. Formed in 1904 with a strong tradition of both employee care and selective cutting of these last privately held redwood forests in America. At some point the grandson takes the Company public, and after 20 years or so, Pacific Lumber finds itself with a low stock price and with lots of valuable timber not priced into its stock. Truly an unfortunate scenario where traditional main street values hadn’t kept up with modern day Wall Street requirements around communicating value, cashflow, and having sophisticated legal and financial advisors.

The book walks through an entire hostile takeover process which ensued due to the low stock price, covers the controversial Mike Milken and his bond prowess/issuances for leveraged transactions used by the Buyer at the time, just before Milken’s DOJ issues and plea deal. In fact this hostile takeover was part of the Government’s case.

Once the buyout is consumated, the book goes on to explore employee discontent with the new owners, accelerated harvesting tactics to improve cashflow as well as its environmental impact, and a litany of environmental protestors and their attempts to hinder the logging activities by trying to get other government agencies to create regulations and laws to slow down the faster harvesting for the benefit of climate change and preserving the forest itself.

As the author states ” The Last Stand is a story of greed, fanaticism,and devotion.” Wall Street, environmentalists, employee all in various fights and lawsuits for their point of view to succeed. He further goes on to state that his intent is to give the reader a metaphor for the disappearance of an arguably more gentler , kinder capitalism- a capitalism that, in large measure,was responsible for the America now under siege. It is finally about what Wall Street does to Main Street and what progress does to the planet. Personally I have witnessed the change these past 40 years,especially when I contrast the CEO’s of the 80’s and 90’s and their ability to balance the interests of many constituents, as opposed to today’s CEO just focused on shareholders. In my view, has led to the bifurcation of wealth in America and many of the social ills we face today.

One of the benefits of writing these book reports is they cause one to pause and reflect on what we learned or how it will contribute to our success post release. In this case, given my 40+ years of business, I’m not sure I learned much from the Wall Street angle of the book. Having also been involved in buying/selling companies 50+ years old, I was reminded of many of these typical issues buyers and employees face in a takeover. The area where I gained the most insight was around the environmentalists, their tactics with both the Company and its regulators concerning harvesting. I hadn’t really thought about their actions being 2 fold- using the system when it benefits them like lobbying Regulators/Congressmen, but then ignoring the system when they felt it wasn’t serving their purposes with protests, climbing on trees on private property etc..

Setting aside the environmentalists actions, I see examples of this behavior by the employees in this buyout and some of the selling shareholders as well. When the legal system didn’t get the intended result, they pursue different ways to obtain their beliefs. I see this happening in America today on a large scale, especially in our political and legal system. There just seems to be a general acceptance that if something can’t be done “in the system and with the rules/laws in place”, people protest in politicians faces, or politicians take ” executive orders” or choose to not enforce laws they don’t personally agree with.

This book is a fresh reminder whether you’re Mike Milken, an environmentalist, or an employee, you can make 99 out of 100 decisions perfectly, but if that one decision is somehow construed to be against the government’s will, you will eventually lose. That’s a good principle to keep in mind for all of us as individuals and as we purse our careers as well!