Reinventing the Millennium

In mid-to-late January 2002, a private equity fund from the United States continued to buy Chinese concept stocks.

This behavior started when NetEase resumed trading. Due to Nasdaq regulations, it will send a letter to the listed company for every 1% it purchases after reaching the 5% trading line.

In this way, NetEase will receive a letter notification from the MIGA Fund every few days, and the time is extremely regular.

If NetEase's chairman Ding Lei had not firmly controlled the company's equity and personally held more than 50% of the shares, it would almost make people suspect that this private equity company was launching a hostile takeover of NetEase.

After the MIGA Fund issued a letter announcing that it held 8.05% of NetEase's shares, the original notification pattern that NetEase employees were accustomed to was suddenly broken, and no letter was sent again for several days.

Ding Lei has been speculating and inquiring about the situation of private equity funds every day since the resumption of stock trading on January 2. He feels uncomfortable with the sudden lack of movement.

However, a phone call from a colleague made him understand the situation. MIGA Fund turned around and bought Sohu!

Ding Lei felt quite subtle in his heart.

Later, he contacted Sina, which was also listed on Nasdaq, and learned that the latter had no letter from the MIGA fund, and there was no major trading activity in the secondary market. He felt inexplicably calm again.

Among China's three major portals that were both listed in 2000, MIGA first bought NetEase, then Sohu, and finally I don't know if it will touch Sina, but looking at this sequence, you will know who this private equity fund with strange behavior is most optimistic about!

Although NetEase has the lowest market value at this time, just over 20 million US dollars, its peers are not much better. Sohu has a market value of 30 million US dollars, and Sina has a market value of 40 million US dollars... Moreover, Ding Lei has strong confidence in his own company.

NetEase's stock price before Nasdaq was suspended was US$0.68, but the company's cash flow was US$60 million.

In other words, even if you spend 20 million US dollars to completely buy NetEase and then liquidate and go bankrupt immediately, you can make a lot of money.

How could NetEase's stock price be so low?

Ding Lei was very confident, he would have to pay at least 6.8 US dollars.

Soon, because of the same lack of understanding of MIGA funds, Sohu communicated with Ding Lei after receiving the first sign of holding 5% shares.

Sohu's Zhang Chaoyang controls his company as firmly as Ding Lei. He is not afraid of transactions in the secondary trading market. He is just particularly puzzled and curious. What is the purpose of this sudden fund?

Sending a letter is just a notification. When I contacted him, I only got a very perfunctory answer, and there was no mention of adding directors to the board of directors...

If someone is optimistic about the development of his company, he didn't contact him to inquire before buying the stock.

All in all, it’s just weird and weird.

For this MIGA fund, Zhang Chaoyang specially arranged to have dinner with Ding Lei.

While the two were having dinner, they didn't exactly talk about private equity, but also exchanged views on the current industry situation.

However, when the meal was coming to an end, Ding Lei received a call from Sina.

"What? Your trading volume has increased significantly today? Is anyone buying?"

Ding Lei was shocked. He knew that this was the MIGA private equity fund almost without thinking.

The timeline is very clear. I started buying NetEase on January 2nd. When I bought close to 9% of the shares, I turned to buy Sohu. Sohu bought 6%, and finally belatedly took action on Sina.

"It's too funny." Zhang Chaoyang had the same judgment as Ding Lei, but he suddenly felt very funny.

Ding Lei sighed: "It's too mysterious."

Yes, a U.S. fund that has been buying too much and has almost lost contact is really too mysterious.

"Maybe, it doesn't just buy our stocks? Maybe it buys on multiple lines, but we don't know about other markets." Zhang Chaoyang put forward a new guess.

"It's also possible." Ding Lei agreed.

He wiped his hands and joked: "Look at MIGA's buying options. They are most optimistic about our NetEase. I can't live up to this trust."

Zhang Chaoyang laughed loudly. He was not at the bottom, so that was okay.

…

New York, Hilton Hotel.

Fang Zhuo listened to Kong Yu’s stage summary.

"As of now, we hold 10.2% of NetEase's shares, and the purchase cost is US$3.48 million."

"The cost of holding 6.7% of Sohu is US$3.05 million."

"Because Sina's stock price was slightly higher, it spent US$3 million to buy 5.4% of its shares, which just crossed the threshold. We already sent a letter to Sina yesterday."

Kong Yu said: "A total of US$9.53 million was spent on these three stocks, and we still have US$470,000 on our books."

He looked at the absent-minded boss at the conference table and couldn't help but said: "Mr. Fang, it seems that there is no way to do anything else with this $470,000. The subprime CDO and CDS combination that I talked about with the Li family before..."

"Oh, don't worry about that." Fang Zhuo came back to his senses and had only one feeling in his heart, it was too cheap.

In just this month's operation, MIGA Fund has become one of the top ten shareholders of the three major domestic portals. It is really easy to be eligible to request additional director seats on their boards of directors.

Kong Yu nodded, hesitated for a while, thinking that he had secretly bought stocks, and asked: "Mr. Fang, these three companies have contacted MIGA. Do we want to give any reply?"

"Let's just say that we are very optimistic about China's development and their future market value growth." Fang Zhuo replied.

Kong Yu asked again: "Mr. Fang, are you so optimistic about their stock price?"

Fang Zhuo nodded and said, "Yes."

"What if their stock price doesn't rise?" Kong Yu asked with his face unchanged but feeling uneasy.

Fang Zhuo said calmly: "That means I was wrong."

Kong Yu: "..."

He suppressed the huge shock in his heart and asked as calmly as possible: "What about the Li family?"

"These three companies will not be delisted. How far can they fall if they continue to fall?" Fang Zhuo spread his hands, "Nasdaq will be delisted if it falls below US$1 for a long time. Our purchase cost is only a little more than US$1 on average. I'm afraid What?"

Kong Yu: "..."

What the boss said makes sense, but... when the boss's small loss falls on an individual, a big mountain collapses, and he is about to jump off the building!

Kong Yu's face finally couldn't help but change. When he first bought NetEase, he bought some. Later, when he saw his boss's firm command to buy more, he ruthlessly invested more.

"Mr. Kong, what's wrong? Are you looking bad? Don't worry, it won't hurt me if the Li family loses some money." Fang Zhuo said cheerfully.

Kong Yu reluctantly agreed, saying that his private purchase of stocks could not be brought to the table.

"Speaking of which, I didn't want to buy Sina. Their management was too shaken." Fang Zhuo, who didn't know the general in front of him, smiled and said, "But I couldn't bear it. They were too cheap. Hey, I couldn't resist the temptation." .”

Kong Yu nodded in agreement and considered whether to sell the stocks he bought.

"I don't know if Wang Zhidong's Sina shares have been sold or not. In terms of prospects, Sina should not be able to compare with the other two companies in the short to medium term. Its equity is too dispersed and its factions are chaotic." Fang Zhuo held up MIGA Fund's recent operation list. He commented casually, "If NetEase is owned by Ding Lei and Sohu is owned by Zhang Chaoyang, then Sina is owned by Wu..."

Kong Yu was distracted and didn't pay attention to his boss's words.

Fang Zhuo put down the information in his hand and said the second half of his evaluation softly: "Then Sina is a no-man's land."

He was shocked by his own evaluation, Hey, Borderlands? Borderlands!

Sina's founder Wang Zhidong was expelled, its own equity was dispersed, and its management was in turmoil.

Fang Zhuo murmured to himself: "Qin lost its deer, and the whole world chased it away."

If we can master Sina, an already influential brand, then the entry point into the era of online social networking will be a logical step, and subsequent mobile Internet or multi-dimensional alliances will be easy.

The problem is that I don’t have the funds now. Even if I do have the funds to make acquisitions in the secondary trading market, I will face counterattack from Sina’s management and shareholders.

One year, Shanda's Chen Tianqiao wanted to take over Sina in a hostile manner. Sina's management at the time launched a "poison pill plan" to make Chen Tianqiao fail, and the latter could only sell his shares.

This "poison pill plan" used to counter hostile takeovers is still quite unsolvable.

"Mr. Kong, tomorrow you will send a letter to Sina, asking for an additional board seat for us at the next shareholders' meeting." Fang Zhuo couldn't figure out his thoughts for a while, but he knew the key to controlling a company.

"Ah?" Kong Yu had been worrying about his money just now, but when he came to his senses, he realized that his boss had changed his mind.

Fang Zhuo repeated the order.

"Why?" Kong Yu asked, "What about the other two companies? Do NetEase and Sohu want to make this request?"

Fang Zhuo shook his head. The equity ecology of those two companies was completely different from that of Sina.

He thought for a moment and said, "I thought of a story about a snake swallowing an elephant. I think we can give it a try."

Kong Yu was surprised. He felt that he understood Mr. Fang's meaning, but he also thought it was whimsical.

Snake swallows the elephant, the front of the snake swallows the elephant is "greedy and insufficient".

If you are greedy, the snake swallows the elephant. Mr. Fang, your name is greed!

"Okay, I will send a letter to Sina tomorrow, telling them that the board of directors will add director seats, saying that our fund intends to hold it for a long time, and then all foreigners will show up in the past. Sina's board of directors is likely to face an American fund. Pass the vote." Kong Yu had a plan in an instant.

Fang Zhuo felt that this person was a bit impatient and said with a smile: "I'm just exploring a possibility. Although the MIGA fund's book funds are almost exhausted, we still need to pay more attention to the U.S. subprime mortgage portfolio market, prepare first, and fight later. "

Kong Yu nodded, thinking that "prepare first, fight later" was not only talking about subprime mortgages, but also talking about Sina.

For a whole month, MIGA Private Securities Fund spent all its budget. The next time can only be to hold and lurk to see what effect this wave of investment in three Chinese concept stocks will bring.

On February 1st, Fang Zhuo's attention completely returned to Yike P1. However, just when he was checking the US channel sales summary, Li Xinyue, the Li family's contact person, called to inquire about the fund's investment status.

"Oh, the vote has been completed." Fang Zhuo gave the other party an answer.

Li Xinyue on the other end was obviously stunned. After a while, he asked in disbelief: "What? Mr. Fang? Are you kidding me? Ten million US dollars have already been invested? This is ten million!"

"What do you think private equity funds are like?" Fang Zhuo actually looked down on Anliangtang, "It's only 10 million US dollars."

Li Xinyue was speechless at such a loud tone. Somehow, ever since she met Mr. Fang, she had some doubts about life. Let’s not mention the trip to the mainland. These ten million US dollars sounded different from one thousand US dollars. Like dollars.

"Mr. Li can wait until maturity to collect the money. Mr. Li is also welcome to introduce friends to invest money." Fang Zhuo said calmly and ended the call.

If it weren't for private equity and the grass-roots team, he wouldn't cooperate with the Li family like this. However, in terms of profit distribution, the Li family is easily persuaded. It's like the bastard looks at the mung bean - they are right.

At present, the MIGA fund has two clients. He and the Li family each contribute 5 million. The profit distribution is to leave 30% to the fund first, and the remaining 70% to the two clients, each sharing 50%. However, because the Li family prefers Low risk, they exchanged 15% for a guaranteed minimum commitment of one million US dollars.

In other words, if the principal loss of 10 million U.S. dollars reaches 7 million U.S. dollars, the position will be automatically liquidated. If the loss of 3 million U.S. dollars is 50% each, the family will lose 1.5 million. Because the Li family has a separate agreement, they will lose a maximum of 150-100= $500,000.

If it makes a profit, Fang Zhuo will get 30% + 0.7 * (0.5 + 0.15) = 75.5%, and the Li family will get 24.5% - if the profit of 24.5% is less than 1 million, it will be made up and distributed.

Both parties were actually quite satisfied, but Li Xinyue was indeed caught off guard by the investment efficiency.

Fang Zhuo was not in the mood to appease the client who was caught off guard. Anyway, the contract had been signed in black and white. There was a high probability that the other party would make money from this matter, and he would naturally be happy in the future.

"Offline sales of M1 are obviously slowing down, but there is a slight improvement on Amazon. Is the popularity of the bundled IPOD promotion a bit weak?"

"Sales relying solely on Kroger, a large channel, are relatively stable, but accordingly we cannot speed up too much. Mr. Pan, we still have to think of a way."

Fang Zhuo is not particularly satisfied with the sales of Yike M1 and the newly arrived P1.

Pan Benneng explained the slowdown: "Mr. Fang, because there is Christmas and New Year ahead, many consumers choose to use electronic products as gifts, so our sales have significantly increased."

He continued: "The pure Kroger channel, if the external situation does not change, according to everyone's estimates, can steadily provide sales of about 40,000 units every month."

40,000 units a month. In other words, this speed is basically enough to complete the P1 target of 100,000 units next month. This is also the official negotiation point agreed with IDG America.

Fang Zhuo tried to make appointments with two American venture capital investors in late January, but neither of them showed much interest in hardware, which made him a little shaken.

iMusic, a music management software based on Windows operating system, is being developed in China. This next step requires a certain amount of funds and channels.

Because online music sharing sites in the United States are gradually tightening the mp3 format, this observed situation is not good news for Yike.

"We still need to increase the amount of promotion for P1. I think it is quite interesting that Ipod now has a limited edition for singers."

"But it's not easy for us to learn this."

"It's been two months since Kroger launched M1 and P1. Why isn't Walmart in a hurry? People don't have it."

Fang Zhuo has never forgotten the largest supermarket channel in the United States.

"Mr. Fang, if it doesn't work, let's just go with it. Mr. Xiong is also a good person. He may not consider holding a controlling stake at this time." Pan Ben is also considering the next development these days. Once he can accept IDG America's investment, funds and resources will be made up.

"Wouldn't it be even more terrifying if it were another 'time'?" Fang Zhuo complained, shaking his head, "Our team here has to hold a plenary meeting to summarize and think about better development directions."