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Chapter 1278: Chapter 1134: We’re Not Short on Money (Please Subscribe!)
When it rains, it pours.
This isn’t rain.
It’s damn knives.
A company depleting its circulating funds and, furthermore, incurring debt to buy back its own stocks—if either happened independently, it wouldn’t be a big deal, given the tradition of American companies to buy back their own shares.
But the purposes are different.
If it’s to stabilize the stock price, then it’s bad news.
If it’s to boost end-of-year performance, then it’s good news.
Clearly.
Now it’s mid-year.
Yahoo is barely clinging to life, and so the market, very cooperatively, immediately reacted to the news. Many small investors prepared to cut their losses before the buyback funds ran dry.
And after it was revealed that the funding chain had dried up.
One bad piece of news after another kept coming out.
Yahoo was once more dumbfounded,
"..."
It hurts, the Board of Directors of Yahoo now so angry they wanted to curse their mothers, but couldn’t find a suitable target to vent their frustrations. By now, Yahoo’s several strategic mistakes had made it a marginalized existence, where only its name held some value.
They were rapidly calculating what assets they had that could be sold.
And then Ali appeared in their sights.
Ali hadn’t gone public yet.
Its market value was hard to estimate.
However, based on several rounds of financing and considering Ali’s industry position and future prospects, the relevant department at Yahoo estimated its valuation to be around seven billion U.S. dollars, which was regarded as a fairly reasonable figure.
Yahoo held thirty-nine percent of Ali’s stocks.
If these were sold at a premium.
At least it should fetch thirty billion U.S. dollars, and that was a conservative estimate. But Yahoo couldn’t possibly sell all of its Ali shares, at most only half, a market value of fifteen billion U.S. dollars in Ali stocks.
Compared to the initial investment of one billion U.S. dollars.
It would be a huge profit.
And this time, the buyer was Tang Qing.
One very wealthy man. They all wanted to ’score one over on him’, so they proposed a one hundred percent premium. In other words, if Tang Qing wanted to buy half of their shares, he would have to pay at least thirty billion U.S. dollars.
"I don’t think that’s appropriate," Yang Zhiyuan spoke up at this time.
The others looked at him.
With unfriendly gazes.
Yang Zhiyuan was Chinese.
They presumed he was advocating for Tang Qing, but Yang Zhiyuan explained calmly,
"First of all, we need to clarify one thing, what will our relationship with Tang Qing be in the future? If the transaction is successful, he will become one of the major shareholders of Ali. Will we make an enemy out of Tang Qing?"
"Secondly, with such a high premium, will Tang Qing agree? If he gives up on this acquisition, even the small collaboration might fall through. Then, as Ma Yun said, we might miss an opportunity."
"Lastly, and most importantly, if this transaction doesn’t go through, we’ll face not only the crisis of Yahoo stocks, but also the potential impact on Ali’s stock price with its upcoming public listing in Hong Kong. These are real issues we have to confront."
Once these questions were posed.
The room fell silent.
"What do you think, then?"
Another Yahoo founder asked.
"We need to establish a consensus first, that selling these shares is to raise funds so that Yahoo’s operations don’t run into problems, and incidentally, to maximize the value of our investment."
"So, I believe, a fifty percent premium is a fairly reasonable level. Any more, and Tang Qing won’t agree—then who do we sell to? SoftBank is impossible. Ma Yun won’t allow someone to independently control over fifty percent of Ali’s shares."
Yang Zhiyuan analyzed, how much Yahoo could get for selling the shares was up to them, but deciding the buyer wasn’t solely in Yahoo’s hands. Even if Japan’s SoftBank was interested in buying, Ma Yun would definitely be against it.
With that said.
Several directors were not pleased.
"Just a fifty percent premium? That’s too little; Tang Qing is so rich."
"Exactly, at least ninety."
"Right, I think even a two hundred percent premium wouldn’t be too much."
"..."
Greed.
Can make people lose their reason, thought Yang Zhiyuan with a sigh internally. In a big forest, all kinds of birds can be found, especially in a complex internet company with diverse shareholder structures, the quality of the investors is indeed important.
Round after round of financing.
Left him, as one of the two co-founders, with less than four percent of the shares.
If he wasn’t a founder.
He doubted anyone would listen to him at all.
At that moment.
One of the major shareholders spoke up.
"Director Yang isn’t wrong. If we bring Tang Qing into the game, it will be a massive positive for Ali’s upcoming IPO. Now that Tang Qing is already Huaxia’s richest man, if he signals his lack of confidence and competes with us, we could stand to lose even more."
"Don’t forget, Tang Qing is good at creating miracles. As for the future, no one can say for sure, but he will have a seat at the table. And as for Xiao Xiao, once you get to know it, you will find that it’s very powerful."
Yang Zhiyuan mentally gave a thumbs-up to this Major Shareholder.
Finally, someone with a clear head.
Short-term interests.
Long-term interests.
The balance between the two.
That was the core of what Yang Zhiyuan wanted to emphasize.
"Xiao Xiao, what’s so great about it?"
"It’s just a little software. Ali can do it; we can do it too."
"This is the Tianyan Group’s investigative report. Have a look."
Yang Zhiyuan sent a document to those involved. He had been investigating this for several days. The document contained global business models and market shares of Tianyan Group, along with an evaluation report on Xiao Xiao.
Ten minutes later.
After reading.
They were silent.
Ali could do it.
Yahoo could do it too.
But.
The thing is, the competition has gained momentum on the international market. If Yahoo tries to follow suit, it’s too late; the competition is growing non-stop and it is not their specialty.
As for Ali?
Would Ma Yun be willing to go head-to-head with Tang Qing?
Could this solve Yahoo’s current financial issues?
The answer is no.
"Xiao Xiao, in Ma Yun’s view, is just like Qingyuan Technology’s ’Epoch’ not yet announced to the public; once launched, it will shake up the industry and lead to a reshuffling of the market. So, I am very optimistic about this collaboration," the Independent Shareholder confessed candidly.
"What do you think about using Ali’s stocks to swap for Qingyuan Technology’s stocks?" someone suggested.
Then.
Some were tempted.
However, most looked at him as if he were an idiot. Qingyuan Technology? Setting aside the future prospects of this company, even if you do the swap, how will Yahoo solve its current financial problems?
Are you providing the money?
Therefore.
That suggestion was immediately dismissed as having no grounds for discussion.
At this moment.
The wall displayed real-time data of Yahoo’s stocks; looking at that glaring red line, their hearts ached. In just two months, the market value evaporated by twenty billion U.S. dollars, hurting them to the core.
Today.
It could potentially set a record for Yahoo’s largest single-day drop since its IPO. And considering the circulating stock volume, they anticipated the decline would soon halt because... their repurchased stocks hadn’t been resold.
Which means.
They would soon become the last ones holding the bag.
As a result.
There won’t be a freefall in the short term, but don’t expect a rise either.
"I agree to sell half of Yahoo’s Ali stocks, but at a 60 percent premium. That’s our bottom line," the Board of Directors eventually passed this resolution after weighing it by one of the other founders.
...
The news traveled back to the domestic front.
Ma Yun personally called Tang Qing.
That price.
Tang Qing didn’t respond; a twenty percent stake was a bit meager. However, adding up the share swap with Ali and Xiao Xiao, he should be able to control around thirty percent of Ali’s stocks after this transaction.
As for the remaining Ali stocks in the hands of Yahoo and SoftBank.
Tang Qing was not in a hurry.
Next year.
During the financial crisis, he would make them cough up some more, especially Yahoo, which has now become the buyer of its own stocks. With his money, they could last until next year, but that would be it.
After next year.
Yahoo.
Would likely file for bankruptcy. For Tang Qing, there was another option—choosing not to collaborate now and wait for Ali’s stock price to plummet next year before stepping in, but he ultimately did not make that choice.
Just a bit of money.
Why complicate things?
We’re not short on cash.
