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“Ford’s at $6,” said Slats, waving his Corona toward the stock ticker running across the bottom of the TV screen.

“Huh?” I said. I had been staring out the window at the snow sifting onto the Bridge Street cobbles. “What are you talking about?”

“Ford Motors. The physical assets gotta be worth $20 a share, but it’s in the toilet because the Street can’t see the value. So it’ll go private. Somebody smart will take it away from the dopes named Ford who ran it into the ground on behalf of the stockholders, who can’t see beyond the Dow charts.”

“What?”

“All these so-called undervalued companies are going private. They do this when some smart insiders see that the company is sitting on something that the Almighty Market can’t see. At $6, Ford is worth about $12 billion. That’s ridiculous. Bill Gates is worth $50 billion, all by himself. For one-eighth of his net worth, Gates could pay cash for a majority stake in Ford.

“Seriously, if I was Gates, I’d take over Ford and make a deal with California to build them five million electric cars. Then I’d make another $25 billion selling them batteries, which I’d buy cheap from Sony, which by the way is now worth about three times what the Street thinks Ford is worth. I’d convert the car business to something like the printer or razor business, where you sell the appliance cheap and make your dough on the replacement element. In this case that would be a big fat recharged battery pack you exchange at what used to be a gas station.”

“Who cares, Slats? It’s a powder day tomorrow.”

“Hey, you know what? We’re looking at the ski business backward. Resorts should be giving the skis and parkas away. The replacement element is the lift ticket. But to get back to my main point.”

“Which was?”

“You get what I mean by undervalued companies going private? It’s happening in the resort business, too. Ultrabeast went private because the Street couldn’t see the value of their real estate holdings. They practiced the privatization thing a couple of years ago by unloading Elephant, and now they’ve sold the whole show. Meanwhile, USskico is going private, one property at a time, without even planning to—they sold off Sweettree and now they’re going to move Stinkpot to private companies. Everyone lined up to buy a ski area is a private operation.

“I’ve said for years that Wall Street can’t tolerate a seasonal business, but it’s more than that. They can’t tolerate vertical real estate and working with the Forest Service, either. Lift ops should be run by people who understand them: by private owners who live there, or, the way they do it in most European resorts, by the town.”

“Back up a minute. Who were the insiders on the Ultrabeast deal, the guys who could see value where Wall Street couldn’t?”

“That’s really interesting. Beast placed their sell-off plan with Woodwind Bros. So who winds up buying the company? Castle Partners, a private equity firm with two principals who used to work for Woodwind. Think that was an inside deal? This is why it pays to keep drinking with your old buddies. I’ll watch to see which of the Ultrabeast execs winds up with a chunk of Castle’s new resort company.”

“Why would that matter?”

“Up front, it looks like this is a really good deal for the stockholders. Ultrabeast bounced around for years between $14 and $20 a share, then they managed it up to about $25, and the sale went through at $34, so that’s about 33 percent above what the geniuses on Wall Street thought it was worth. But if some of the execs are among the purchasing group, then they probably think it’s worth even more than the new market cap of $1.7 bil. Or at least they think it’s worth more than that carved up and sold off in chunks. And who would know better than the inside guys?

“Remember that when they first talked about selling out, some analysts thought the company would have to be broken up right then and sold in bite-size pieces. So what happens next is maybe they sell off Piccolo, and maybe Mt. Shaky—maybe they sell all the Canadian properties, probably after the Olympics. Shaky has turned into a labor nightmare, and the elevation is too low to survive the global warming disaster. So is Piccolo, for that matter. That village could be as rainy as Seattle in 20 years.

“What’s also gonna be interesting is how long they stay private. The execs make a ton of money when a company goes private—but as everyone knows, the execs make a ton of money when a company goes public, too. A smart team could take a company private, then wait six or eight years and take it public again, or even take each of the sold-off chunks public, separately. And someday they could merge back into one big company again, and the execs would make a ton of dough on that deal, too. Stop laughing. It’s what the phone companies did when the Baby Bells mated up again.

“If I’m right, the way to play these deals is to wait until a public company hires a mergers specialist to ‘explore strategic options’ for ‘maximizing share-holder value.’ It means they have a buyer lined up, so it’s safe to buy the stock. A few months later you can sell out to the incoming private owner at a 20 to 30 percent premium.”

I thought about that. “But who’s still public, besides Whale?”

“Bingo,” said Slats. “It’s the sole survivor on The Big Board. Better start drinking with those guys, if they’ll still talk to us.”