Hollywood Hunter

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Simon was chatting with Bryce Levison in a low voice, and a slightly hoarse old greeting came from his ear: "Hey, Simon."

Turning to look, it turned out to be Warren Buffett.

Also in the top circle of this social pyramid, it is not the first time Simon has been in contact with Buffett. He has also met in some social situations before, but he is not familiar with it.

Tonight's meeting was not deliberately arranged.

Simon knew that Buffett would attend and planned to have a chance encounter. In fact, both parties knew their mutual goals. Otherwise, Buffett, a 65-year-old old man, would not ask for an invitation letter to attend such a fashionable party.

In the past, the reason why Buffett agreed to sell the Metropolitan abc Group to Disney in 1995 was that he saw that the impact of cable TV and the Internet on the traditional public television network was becoming more and more obvious, so he chose to cash out at a high price. Facts have basically proved the correctness of Buffett's decision.

After the new century, including fox, the four major public television networks in the United States have basically declined all the way, and TV programs with 20 to 30 million viewers in the early days of TV networks have become less and less common after the millennium. It has been making money all the time, but the whole is far inferior to the increasingly prosperous cable TV and the Internet, and can only become a vassal of major media groups.

Buffett's cash-out time seems to be a little early, but it is in line with the investment criteria of this veteran investor who does not pursue the last dollar. The two-room stock has avoided the impact of Berkshire Hathaway.

He smiled and shook hands with Buffett, and then casually introduced Bryce next to him. After greeting, Simon whispered in the woman's ear, and when Bryce turned away reluctantly, he joined Buffett. sit down.

Buffett watched Bryce walk away like a mermaid, and joked with Simon, "I really envy you young people."

Simon also smiled: "Warren, you are not old at all."

Speaking of which, Buffett is actually in a state of 'two wives in one house'.

The investment tycoon had already separated from his original wife in the 1970s, but the two never divorced, and they have been together as husband and wife in various public occasions over the years. At the same time, Buffett has already lived with another partner, which is considered a husband and wife.

It is rumored that the relationship between the trio is still very good, and Buffett is now sending holiday cards to friends and relatives, and even the signatures are all three together. In recent years, many media have ridiculed that Warren Buffett has two wives out of various thoughts.

In fact, Buffett's house and two wives are not worth mentioning in the rich circle at all.

When one can get in touch with the scenery at the top of the pyramid, one must find that many things are far beyond the most daring fantasies ever.

Aside from his grandiose stinginess in spending money, Buffett is no different from the average super-rich in other respects, one of which is his regular attendance at various top social gatherings.

Except, of course, charity parties that require donations.

After another polite compliment to the party, Buffett's topic turned to Igret, and he kept asking Simon about the company's various problems. Although the billionaire is 65 years old, whether it is memory or His thinking is still quite sharp and agile, and a lot of data related to Igret seems to be imprinted in his mind.

And, apparently, Buffett is bewildered and skeptical about Igret's meteoric rise in financial numbers.

In the past, no matter how surging the Internet wave was, Buffett was determined not to involve in new technology industries that he was not familiar with. This even led to Buffett being thrown eggs by shareholders on the spot at a Berkshire Hathaway annual meeting, accusing him of missing out. The best investment opportunity.

Now, the old-fashioned conservative Buffett obviously still doesn't understand the Internet: "So, Amazon's online store is indeed the most loss-making part of the business, Simon, have you ever thought about divesting this part of the business, or reducing investment in this area , it can be developed more stably, so that the stock price growth potential of Igreit after its listing will definitely be greater."

Simon realized that Buffett was interested in Igret's IPO.

This is not surprising at all.

Buffett's favorite is a company with a "moat". Now Igret, whether it is advertising or software, can be described as a "city high and deep", and no other company in the same industry can compete.

However, for this very profit-oriented investor, Igreit's flaws are also obvious, the most important of which is that he invests too aggressively, thus causing huge losses that he thinks are completely unnecessary. If you cut down or get rid of these burdens, Igret will immediately become Buffett's most ideal investment target, with high growth rate, high profit margin, and a corporate moat that is difficult for peer companies to cross.

Of course Simon would not do this to cater to Buffett's investment willingness, shaking his head: "Warren, e-commerce is an integral part of Igret's business system. This business seems to be losing money, but it can be very profitable. To increase the types of services in the Internet industry to a certain extent, and then increase the stickiness of users to the Internet. All in all, this is a kind of market cultivation. This is the case with all the businesses that Igrete is doing now, as long as the public is aware that the Internet has When there are enough services, they will gradually consume directly or indirectly in this field.”

Buffett nodded, shook his head again, and said: "

However, Simon, there is no shortage of capital to develop any business in the Internet field. I think Igreit can be more focused. You must know that a company that pays too much attention to diversification often results in poor results. "

Simon said: "Of course I understand that Igreit is actually making relevant layouts, and I will also streamline the company at the right opportunity, but not now."

Simon said the right opportunity, it is after the burst of the Internet bubble.

The Westeros system's advance in the field of new technology cannot stop the normal economic laws of the capitalist society at all, and the day when the bubble bursts will come sooner or later.

At that time, not only will the business be streamlined, but Simon will also streamline Igret's rapidly bloated large team of employees. In recent years, in order to pursue rapid expansion, Igreat has actually accumulated various problems. Simon will solve it as much as possible through the drastic streamlining after the burst of the Internet bubble, and realize a nirvana for the company.

Buffett obviously couldn't understand Simon's mind. He thought it was an excuse for the young man in front of him. He could only shake his head slightly and changed the subject: "Simon, I found out that you are planning to acquire abc, right?"

In this matter, Simon has actually revealed a lot of flaws.

Such as the espn shares obtained from the Hearst family.

For example, last year's big IPO financing.

And in the past few years, several popular TV shows such as "Friends" and "Emergency Room Story" have been specially handed over to two other TV networks. Simon's arrangement is similar to the foreign cooperation projects on the Hollywood side, parasitic infiltration. However, in Buffett's view, this obviously has the purpose of deliberately suppressing the development of abc in order to lower the price when launching the acquisition, which is actually another part of the truth.

In this case, Simon simply did not detour, nodded and said: "Yes, after the media integration ban is lifted, further integration in this field to adapt to global competition is an inevitable trend. Metropolis abc is my top priority target, of course. , is not the only option. Warren, we can talk about an offer right now, if you want.”

Berkshire Hathaway holds a 25% stake in Metropolis ABC Group. Buffett actually has more say in this company than Chairman and CEO Tom Murphy. As long as he agrees, things can basically be finalized .

Buffett did not respond immediately, but instead complained: "Simon, Daenerys' stock price is too high right now."

Simon just smiled and shrugged.

In my mind, I recalled Disney's acquisition plan for Metropolis ABC, which was a mixed transaction of half equity and half cash. Obviously, this time, Buffett is also thinking the same way, but the stock price of Daenerys Entertainment is very high now. The investment tycoon does not want to obtain an all-cash acquisition, and he is worried that after the stock exchange or partial exchange, Metropolis abc will suffer in it.

Because he has been paying attention silently, Simon knows that the current market value of the Metropolis abc group is about 16 billion US dollars. Since the Westeros system has led to the recovery of the entire North American stock market in advance, the current market value of the Metropolis abc must exceed the original timeline. Including the company's debt of about $3 billion, and the acquisition has not yet started, the overall $19 billion is exactly the same as the total amount of the original time and space Disney's acquisition of Metropolis abc.

This time, Daenerys wants to acquire this company, and the total value of assets plus liabilities must be more than 20 billion US dollars.

Simon does not feel disadvantaged or pressured by this, because Daenerys' market value is actually higher, which has exceeded 130 billion US dollars at present. According to Daenerys Entertainment's financial report for the first quarter of fiscal year 1995 released in February, The price-earnings ratio has reached more than 120 times that Buffett is absolutely unacceptable.

By comparison, Metropolis ABC Group trades at just 37 times earnings.

Seeing Simon smiling and not answering, Buffett frowned slightly in distress, and then asked, "Simon, do you think Daenerys' stock price has room to rise?"

Simon shook his head: "Warren, who can say such a thing. However, I have enough confidence in Daenerys. Many people say that the growth of this company has reached the ceiling, however, they only need to pay a little attention. Looking at the financial report, it is not difficult to find that Daenerys's quarterly financial report announced in February still has a year-on-year growth rate of 39%, and I believe this growth can continue for a long time."

Buffett frowned and thought for a moment, seemed determined, and said: "Simon, I can sell Metropolis abc to you, but I think my shareholders also need to get enough interest protection, so I hope to get a cash plus The payment method of the convertible bonds is half cash and half convertible bonds based on the current stock price, with a ten-year term and an annual interest of 8%.”

Every investor has his own specific investment style.

The cash-plus-stock or bond deal is Buffett's usual approach to takeovers. Cash is safe in pockets, stocks or bonds, which can save you a capital gains tax in the short term and maximize profits in the future, and Buffett often asks for maximizing profits without risk.

Simon chose to refuse this without hesitation: "Warren, if you insist on this, we don't need to talk about it."

Daenerys Entertainment’s IPO last year was to prepare for this acquisition of the public television network. Counting the financing during the IPO and some subsequent profits of Daenerys, the current cash reserve of the entire Daenerys Entertainment Group reached an astonishing 170 One hundred million U.S. dollars. As long as cash is not spent, it will inevitably suffer from inflation, and the bigger the cash, the more so.

Therefore, for Daenerys Entertainment, even if its own stock price is very high, an all-cash acquisition is the most preferred choice.

Buffett now wants both cash and a stable high-interest bond, and also requires that this part of the bond can be converted into the future stock of Daenerys Entertainment at any time at the right time in the future according to the agreed stock price. This is a good thing. , The investor has enjoyed it many times, but it is only when some companies are in distress and have to agree.

Daenerys' entertainment situation is improving, and if Simon agrees to this obviously unequal transaction terms, it will be strange that other shareholders will not point at him and scold him.

Having said that, Simon didn't want the transaction to go down directly, so he softened his tone a little: "Warren, I will definitely not accept this transaction model with unequal additional terms, you have to be responsible to your shareholders, I Same goes for it. So either all cash or all stock, or cash and stock, the kind that doesn't come with any superfluous clauses, otherwise I'll just try to work with two other networks. And, frankly, Hollywood right now, has Only Daenerys Entertainment has enough strength to acquire the three major TV networks. With the development of cable TV and the Internet, the decline of public TV networks is very obvious. The later you choose to sell, or sell to other companies in the future, it is impossible. Get too high a price, if you keep it in your hand, unfortunately, the value of this TV network will shrink faster, just like the print media industry now."

When Buffett heard Simon's words, his expression remained unchanged, and he said, "Simon, if you think so, why would you buy a TV network?"

Simon said: "It's difficult to grow a single network, yet it is an essential part of a large media conglomerate that provides marketing and sales channels for Daenerys' other businesses. This I don't think you don't understand."

Buffett shook his head gently again, without refuting Simon's argument, but said again, "Daenerys' stock price is too high."

The old man still wanted stocks, but he obviously couldn't accept Daenerys' super-high price-to-earnings ratio of 120 times.

Simon smiled and said: "Then choose all cash, Warren, you should have heard the news, the capital gains tax will be adjusted soon, at that time, the 15% capital gains tax rate will be very important for you to invest in Metropolitan abc these years. It's nothing in terms of earnings."

Even if the transaction is negotiated now, involving a huge merger and acquisition of 20 billion US dollars, it will take at least three to five months for the transaction to be completed.

According to information obtained by Simon, it is no surprise that the capital gains tax reform bill will be passed in May. By then, Berkshire Hathaway, which has held shares in Metropolis ABC Group for many years, can fully enjoy the most favorable price. Capital gains tax rate.

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