High School Senior - M&A

Holy Shit.

http://dealbook.nytimes.com/2011/04/07/success-on…

Success in These M.&A. Deals Appears on a Report Card
BY KEVIN ROOSE

Tina Fineberg for The New York Times
Christina Feng, standing, teaches a high school class on Wall Street deals.
Five miles north of Wall Street, a small financial advisory firm, Synergy M&A, has been working on dozens of headline-grabbing deals, including AT&T’s recent $39 billion bid for T-Mobile USA.

But the 27 deal makers hashing out terms and dissecting numbers are not freshly minted business school graduates or investment banking veterans. They are high schools seniors in a third-floor classroom on Manhattan’s Upper West Side.

Synergy M&A is the trade name of the business and entrepreneurship class at Martin Luther King Jr. High School of the Arts and Technology. For the last year, Christina Feng, 25, has been teaching the intricacies of Wall Street deals to her 12th-grade class. Recently, her students have been applying their book learning to real-life situations by analyzing some of the world’s largest mergers and acquisitions.

”A lot of high schoolers complain about having all these classes, and it’s like, how can I relate to this?” said Mariangely Gonzales, a senior from West Harlem. “But this class directly affects me.”

“To understand the business world is to understand your life,” added Hector Cabrera, who lives in Manhattan’s Lower East Side.

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Ms. Feng’s M.&A. workshop is not the only high school class with a Wall Street curriculum. The High School of Economics and Finance, a public school in Lower Manhattan, offers courses in banking, accounting and financial mathematics. The Wharton School of the University of Pennsylvania recently introduced a Web-based project called Knowledge@Wharton High School to promote financial literacy among students and teachers.

But few other classes have taken to deal making with the gusto of Synergy M&A. In recent weeks, Ms. Feng — who spent two years in the Teach for America program — has quizzed her students on the basics of stock ownership, esoteric financial terms like “par value” and potential interest rates for borrowers.

“I want to open up my own bake shop one day, so knowing this information is good for me,” said Jessica Anderson, a senior from East Harlem.

Many of the students are Hispanic and African-American and from low-income families, and Ms. Feng said few had been exposed to corporate finance and investment banking before this year. Now, they are learning to track stock movements and analyze corporate earnings reports — some of the same tasks done by entry-level analysts at Goldman Sachs or Morgan Stanley.

Tina Fineberg for The New York Times
A student holds a visual guide.
“Finance has a lot of upper middle-class, affluent white people in it,” said Ms. Feng. “It’s a field that traditionally not a lot of my students would feel they could break into.”

Synergy M&A got its start last fall, when Ms. Feng, a government major at Colby College, entered her class in Virtual Enterprises, a business simulation program for high schools. At first, the organization was doubtful that the students could grasp such a complex topic.

“That kind of business is tricky, especially when kids don’t have the background for it,” said John Jastremski, the associate director of Virtual Enterprises who rejected the initial Synergy M&A plan.

Ms. Feng decided to enter the program anyway, telling Virtual Enterprises that the M&A in their name stood for “motivation and assistance,” and that their mock business would be a line of classroom products stamped with inspirational sayings. Virtual Enterprises eventually allowed Synergy M&A to remain in the program.

The class now splits its time between its retail business and its deal advisory projects. On a recent afternoon, one group of students was studying the long-term viability of deep discount sites like Groupon and LivingSocial. Another was doing a case study of Mercedes-Benz’s failed acquisition of Chrysler in 1998. Danny Rivera, a senior from West Harlem, was scrolling through news reports to better understand AT&T’s offer for T-Mobile.

”I’m up in the air,” Mr. Rivera said of the proposed deal. “A merger would be better for the service, but T-Mobile customers won’t benefit because they’ll lose their cost-efficient plans.”

Last week, the class took a field trip to Google’s New York City headquarters. Ms. Feng arranged the trip so that Synergy M&A could see the real-life corporation behind its most recent assignment: Google’s hypothetical purchase of The New York Times Company.

Tina Fineberg for The New York Times
Teacher Christina Feng, standing, helps students with their research.
For the takeover simulation, the class split into six groups, three representing The Times Company and three representing Google. Teams used cash-flow models to value the two companies, set opening bids and lowest acceptable offers — executing the takeover at prices that ranged from $11.82 to $20 a share. (Actual shares of The New York Times Company closed at $9.44 on Thursday.)

”We had to reassure The Times that Google wasn’t going to change them,” said Ms. Anderson, a member of a Google negotiating team whose bid of $20 a share was accepted. “It was actually really fun.”

Synergy M&A’s enthusiasm has already attracted admirers in the business world. Robert F. Bruner, the dean of the University of Virginia’s Darden School of Business and author of “Deals From Hell,” recently gave a guest lecture. Jeff Fernandez, the chief executive of Internet training company Grovo, has also spoken to the class.

Last year, Ms. Feng contacted Lloyd C. Blankfein, the chief executive of Goldman Sachs, and arranged for a classroom visit. But when a scheduling conflict forced Mr. Blankfein to cancel, Ms. Feng extended an invitation to a fellow Colby graduate, Robert E. Diamond, the chief executive of Barclays.

“When I got her e-mail, I almost jumped over it,” Mr. Diamond said. “But it struck me, with the school being right here in the city, and the types of kids she was teaching. I e-mailed her back and said, ‘What time should I be there?’”

Mr. Diamond spent an hour speaking to Ms. Feng’s class about the major events of the financial crisis, including his bank’s 2008 purchase of Lehman Brothers’ core assets, the nationalization of the insurer American International Group, and the transformation of Goldman Sachs and Morgan Stanley into bank holding companies. He later invited the entire class to the Barclays headquarters for a tour of the trading floor.

”Frankly, I was stunned,” Mr. Diamond said. “What really impressed me was how knowledgeable kids with no background had become in this subject area. To me, that’s what teaching is all about.”

Many of the employees of Synergy M&A are headed for state and community colleges next year, and few said they planned to study business or finance. But after his visit, Mr. Diamond offered to reserve several Barclays internships, which typically take place after a student’s junior year of college, for graduates of the class.

To Ms. Feng, it was an indication that some of her students could still end up on Wall Street.

“We’re proving a lot of people wrong,” she said.