Chapter 998
Money Makes Everything Negotiable
If Lu Hongliang and Wu Ying had remained of one mind all these years...
Lu Yang's next focus should be on how to separate the two of them!
But now that Lu Hongliang has taken the initiative to call and show him goodwill...
Lu Yang then understood the situation.
This person already has the intention to get closer to him.
This also confirmed his suspicions. On the surface, Wu Ying seemed to be eloquent and adept at navigating relationships with major domestic and international capital groups. However, the one who truly understood reality and had a clear understanding of who controlled the future of Xiaolingtong was actually President Lu, who was unassuming, hardworking, and focused on his work.
"It's good to face reality!"
"Knowing that we need to face reality, then I won't need to keep a close eye on things all the time."
Lu Yang hung up the phone, a slight upturn at the corners of his mouth.
He initially invested $6000 million in UTStarcom, acquiring a 35% stake and becoming its largest shareholder.
As for Lu Hongliang and Wu Ying, the two co-founders of UTStarcom, they held a high percentage of shares in the original company before the merger. However, after the merger, their shares in the new UTStarcom were only 39% and 37.7% respectively.
After Lu Yang invested a huge sum of 60 million US dollars to acquire it.
They renamed it Xiaolingtong Group.
At that time, the shares of Lu Hongliang and Wu Ying, the two co-founders of UTStarcom, were also diluted.
Currently, they are 33.17% and 31.83% respectively.
Together, the two still maintain absolute control.
But this is also why Lu Yang was able to become the largest shareholder behind the scenes with a total shareholding ratio of 35%.
Of course, if this shareholding ratio continues to develop and stabilizes until Xiaolingtong Group can be listed on the A-share market, then Lu Yang can give up any hope of possibly stealing control of Xiaolingtong.
But things have changed now.
Lu Hongliang and Wu Ying were ambitious; they were not content to stop there.
Two reasons!
The domestic financial market is too small to accommodate their ambitions and aspirations.
In their view, a company as excellent as Xiaolingtong Group should go to the United States and list on NASDAQ!
To put it more nicely, it's about competing with the best companies in the world.
To be realistic, earning only RMB is a bit petty; they want to go to Wall Street and steal US dollars from investors' pockets.
It's good to be ambitious!
Lu Yang also hoped that they had ambition.
The future of the Little Smart is clearly visible. It can survive for a few years, but it cannot survive indefinitely. Lu Yang is very clear and certain about this.
What he wants now is to take advantage of the current, imminent, and upcoming nationwide popularity of PHS (Personal Handyphone System) to make a fortune in the financial market, earning all the money for the next few decades. As for who will ultimately take over?
This is not a problem for Lu Yang to consider!
Wall Street is where capital from all over the world gathers. If they don't fleece these韭菜 (a metaphor for retail investors), someone else will.
On another note!
What is the second reason?
Tell me a joke!
The A-share market has strict and rigid requirements for listed companies. Only companies that are profitable and have been profitable for three consecutive years are eligible to be listed on the A-share market.
This requirement is clearly beyond the capabilities of PHS phones.
Last year, it was still losing money.
This year, we saw some profit in the first half of the year, but in the second half of the year, we will soon see the large-scale construction of network base stations in 300 cities across the country.
It is foreseeable that the company's financial statements this year will also show losses, and huge losses at that!
We'll truly have to wait until we turn a profit.
By next year, or even the year after, the nationwide signal network for PHS (Personal Handyphone System) will probably be mostly in place. What's left is just patching things up and doing some maintenance. After all, the country is so big, there will always be some that slip through the net. These maintenance costs won't be much. From then on, PHS will enter an era of exorbitant profits.
you got it?
If things were to proceed step by step, for Xiaolingtong to successfully list and raise funds on the A-share market, it would need to first experience a period of losses for at least two to three years, then enter a period of high profits for another two to three years, before finally being able to successfully list on the A-share market.
On a side note.
If we wait until then, will the company still be short of money?
Is financing still necessary?
I'm afraid they'll never run out of money.
Besides, if a company goes public at its peak, its stock price will definitely be at its highest point. By then, the money will have been made by institutional investors, and retail investors will be happy to enter the market, only to find themselves stuck at the top. Within two years, the PHS (Personal Handyphone System) business will face a harsh winter.
How do we break this deadlock?
There's no other way; if you don't want to falsify accounts, you have to find another way.
Go to the US, cross the ocean, and apply for listing on the Nasdaq Stock Exchange, which has less stringent requirements for listed companies in the technology industry!
So, see?
Why are so many well-known domestic technology and internet companies choosing to list in the US in this day and age?
There's a reason for this.
Rather, it is determined by the nature of the enterprise, which is different from traditional enterprises!
Traditional enterprises:
The factory buildings, production lines, equipment, inventory, and land are all tangible assets that can be used as collateral for bank loans. The financial statements are visible and tangible, and can be understood by banks and the China Securities Regulatory Commission. Profits come from the difference between the purchase and sale prices of products, resulting in a stable cash flow.
The Internet and most technology companies:
Purely asset-light projects either only have servers, software, domain names, and user data, but no factory buildings or land, and their intangible assets cannot be used as collateral for banks, making it impossible to obtain domestic credit; or they only have cost expenditures in the early stages, with meager revenue and perennial losses on paper. In this relatively conservative era, they are considered bubble projects by auditors as having "no assets and no visible profits."
Neither Lu Hongliang nor Wu Ying wanted to wait five years.
Lu Yang was also unwilling.
On this point, they were in complete agreement and hit it off immediately.
"Oops."
"That old bastard Wu Ying, could he be thinking the same thing as me?"
Lu Yang suddenly remembered.
Since all three parties have reached a tacit understanding and acknowledge that it is necessary to confirm the commencement of Series C financing as soon as possible.
Then this guy doesn't need to take the initiative to give in, does he?
"Before I even made any demands, he revealed his true colors, allowing me to retain my shares and not be diluted in the upcoming Series C funding round. So what about him...?"
Lu Yang seemed to understand a little.
If Wu Ying, who also holds 33.17% of the shares, can maintain his equity from being diluted in the upcoming Series C financing, he will completely overshadow Lu Hongliang, who is also a founder of the company. Furthermore, if he can obtain external capital support after the financing, then even if Lu Yang holds 35% of the shares, he will be helpless against him.
He shook his head!
Lu Yang couldn't help but chuckle!
So, from the beginning, he wasn't aiming to seize power. His goal was simple: to acquire as many PHS (Personal Handyphone System) shares as possible before the company went public. Once the company successfully listed and the shares were released from lock-up, he would make a fortune in the financial market!
9 Month 1 Day!
Monday happened to be the day when students who had been on summer vacation registered for school.
Lu Yang also put aside his work. He accompanied his wife, Yin Mingyue, first taking their daughter to school, and then taking their son to register for first grade at a nearby elementary school.
The residential complex where they live is one of the most prestigious luxury residential areas in Shenzhen.
The nearby primary school is naturally the best private primary school in the entire city of Shenzhen.
Just as Lu Yang handed his son over to the teacher, he tried to persuade him, just like other parents who were sending their children to first grade, to listen to the teacher.
His cell phone rang.
Excited voices came from inside, belonging to Lu Hongliang and Wu Ying.
"Boss, it's done."
"Let me tell you, it's confirmed. Our Xiaolingtong has officially passed the listing review, and the listing date is next Thursday. It's only a few days away. Congratulations, boss!"
Congratulations!
I never expected that, without realizing it, even the Little Smart (a type of mobile phone) has reached this point.
However, compared to the other timeline in the previous life, it has actually been delayed by nearly 6 months. In other words, for about half a year, because of Lu Yang's appearance, this timeline butterfly flapped its wings slightly, giving UTStarcom, which was renamed Xiaolingtong, more room to develop.
As for its development over the past six months, how different is it from the past?
Great!
It's incredibly big!
In both its past and present lives, UTStarcom will experience a boom in its PHS (Personal Handyphone System) business.
However, before this explosive growth period, UTStarcom had already gone public in the original timeline. In other words, its stock price had already realized its value on March 3rd, and it only raised $180 million. But after this six-month delay, Xiaolingtong has now achieved communication signals in as many as 300 cities across the country with a brand-new image.
This is a world of difference from before, when we were just holed up in Hangzhou.
But if that's the case, then the fundraising can no longer be stingy.
1.8 million? Is that enough to appease a beggar?
In Lu Yang's opinion, it would be more like a tenfold return, otherwise he would feel like he was losing money!
Indeed, that was the case. This time, not only was Lu Yang ruthless, but Lu Hongliang and Wu Ying were also ruthless. During the Series C funding round, they dared to call out a valuation of 50 billion US dollars, and in the end, after bargaining, they reached a deal for 35 billion US dollars.
But after the transaction!
With the addition of two major external shareholders, Deutsche Bank and SoftBank Group, and after successfully raising funds, the foreign media hyped it up, causing Xiaolingtong's stock price to plummet less than two months after the financing.
Even before its IPO, Xiaolingtong's stock price was already widely considered to be worth seven billion US dollars.
What is 35% of seven billion US dollars?
$24.15 billion, converted to RMB, is worth over 10 billion, it's like getting it for free.
What was the only thing Lu Yang gave up?
$6000 million.
In order to retain these shares, the company subsequently invested $1000 million.
$7000 million has turned into 100 billion RMB in just over a dozen months. Isn't this a worthwhile deal?
"Mr. Lu, Mr. Wu and I have discussed it and hope you can come too. You can ring the bell with us. After all, this is your company, and you are the major shareholder."
Lu Hongliang suddenly said this on the phone.
"There's no need for you to ring the bell. I'll just send my best wishes from China for a successful IPO."
Lu Yang rejected him.
It wasn't because I looked down on him and Wu Ying, nor because I looked down on Xiaolingtong.
The reason he wasn't going was simple: he couldn't find the time lately.
He has to go to the port city.
That was a brilliant move made in a fit of anger, resulting in the loss of 800 of our own troops and the destruction of a thousand of our enemies.
Now the boomerang has hit him back.
The time has come for a solution.
Recently, the Li family's Cheung Kong Holdings in Hong Kong has not been affected much, but the Li family's businesses in mainland China, including PCCW, owned by Li Zekai, the second son of Li Zekai, have been in a lot of trouble.
no way!
No one could have imagined that Lu Yang would make such a foolish move!
A perfectly good logistics park, and suddenly it's abandoned.
A perfectly good warehouse, locked up just like that.
A perfectly good deep-water pier was just rendered useless.
As things have come to this, Lu Yang's own Century Group's goods are no longer shipped here. Other shipping companies see that even the boss himself is like this, so why should we follow suit? We should quickly move to another location. Pengcheng Yantian Port across the river is much better. It's a deep-water port and there's no shortage of goods to load onto ships!
that's it!
Less than two months later!
Cyberport, which used to be bustling with people and piled high with containers, is now declining at a visible rate.
Until recently,
The Li family finally couldn't hold back any longer.
Even a starved camel is bigger than a horse; Lu Yang felt the pressure as soon as he touched it.
As for what to do?
He'll just let things be. No matter who tries to mediate, it won't work. He and the Li family are now sworn enemies. He can't afford to offend them, but he can let go.
Didn't you say that what I'm doing will hinder the development of the port city?
I used to keep my own goods at the port city export port because I wanted to, but now I don't want to anymore. I want to put them back in Pengcheng and export them there. Who can stop me then?
As for the Cyberport port, logistics center, and container warehouse that are now in a deep recession, I invested all of these myself. If you think they are in your way, then pay to buy them.
With money, everything is negotiable.
That's right, that's what Lu Yang thinks, and that's exactly what he'll do.
Li Zekai thought he had convinced his father, and then used Li Ka-shing's connections to get the Hong Kong government to pressure Lu Yang, so that Lu Yang would compromise. Haha, he's dreaming!
"Mr. Li, one should be lenient when one can."
"No, no, no, it was Young Master Li who provoked me first."
"But...it's better to resolve conflicts than to create them."
"It's already done. Now you want me to back down? Why don't you try to persuade Young Master Li? He provoked me first. If anyone should back down, it should be him."
"But……"
"No buts. If you want me to withdraw, you can do it with real money, not just empty words. Give me the money, and everything is negotiable with money."
If you can afford the price, I wouldn't mind taking a step back and selling you the port and logistics warehousing center.
Let's settle this peacefully, take the money and leave.
At that time, Cyberport will be handed over to the Li family for operation. With the Li family's status and strength in Hong Kong, they will surely be able to revitalize Cyberport. Whether I am there or not, it will be the same. Wouldn't that be a win-win situation?
What do you say, official? (End of Chapter)