King of Capital
Chapter 47: $15 billion valuation
Chapter 47: US$ billion valuation
Xie Jingxing and Xiao Ma Ge finalized their cooperation intention with just a few words on WeChat, but tacitly did not communicate any details of the cooperation.
Whether for their own interests or considerations at the project execution level, both parties must inevitably have a round of not-so-harmonious and friendly collisions before truly cooperating. Only when all views are balanced can they put their arms around each other and shout slogans of happy cooperation with a smile.
Therefore, Xie Jingxing had anticipated that Tencent's strategic investment would personally lead the merger and acquisition, and he had mentioned this point during a previous call with Su He.
The final response plan presented in the promotional brochure, in addition to bragging about Juntai's pitiful cross-border M&A case as much as possible, is a comprehensive analysis of WhatsApp from operations to finance, and the formulation of a development strategy for Tencent.
They painted a rosy picture, telling Tencent all the benefits it could gain from acquiring WhatsApp, and proving that letting Juntai handle this project would be a better option than Tencent’s own strategic investment department.
With Xie Jingxing's foresighted information in his head, there was no need to say more in this regard. Su He led the team to write a very complete promotional manual in two or three days, which could generally meet the purpose of demonstrating strength.
But these are not the most important. What really proves the irreplaceability of Juntai and the reason why no one else can do this job except me is Jim Goetz.
This person is a partner of Sequoia Capital and also the only venture investor of WhatsApp.
"It's hard to imagine that you could have a deep friendship with him."
Su He asked tentatively with a strange expression, believing that he had found the source of the commercial confidential information mentioned in the promotional brochure and during the meeting with Xiao Ma Ge.
Xie Jing Xing flipped through the promotional brochure and said calmly, "In fact, I am not familiar with him."
"...Then what is our real competitive advantage?" Su He was speechless.
"My brain."
"No one denies your intelligence and a lot of...exclusive information, but we have to be able to talk to the seller, do you understand what I mean?" Su He said more bluntly.
Xie Jingxing closed the promotional brochure and explained seriously: "I sent an email to my university teacher for help, and he agreed to help us arrange a meeting with Jim Goetz."
"Professor Joseph Stiglitz?" Su He's eyes lit up.
She had long heard of the fame of this Nobel Prize winner. Professor Joseph is one of the most China-friendly economics leaders in the world, perhaps the only one.
Xie Jingxing nodded slightly: "If I say that I had planned for Tencent to acquire WhatsApp before I returned to China, would you believe it?"
"Excellent! I think we can show off in front of Mr. Chen (Juntai's vice president and director of the investment banking department) tomorrow." Su He was in a good mood and rarely praised others.
Xie Jingxing, who was barely covering up his lie, smiled helplessly and retorted: "It's not us, it's you. Tomorrow is Saturday, and as an intern I have to take a day off."
"I don't agree. How can you have the nerve to take a break when everyone is busy?" Su He's emotions reversed and he rejected it outright.
The two had just argued over the dominance last Friday. Now she didn't bother with the young man and took a step back, but the other party wanted to be a hands-off boss. Besides, there is no such unlucky thing in the world that a general shouts "Brothers, charge!" before going to the battlefield and then hides in the trenches himself.
Xie Jingxing had no choice but to force an explanation: "I will sign an investment agreement with Didi tomorrow. This is related to the mobile payment strategy. From a certain perspective, it can also be regarded as contributing to the M&A project. In the Tencent development strategy section of the promotional manual, the acquisition of WhatsApp is largely related to the mobile payment layout."
Not only does he have to sign a formal investment agreement with Didi this weekend, he also has to shoot a commercial for Didi. Now Didi is in the final stage of a bloody battle with Bumblebee.
Cheng Wei said that if Didi fails to kill Bumblebee next month, it will die first.
And as his fame grew, miHoYo also gave in in advance, hesitantly revealing that they had figured out a new version of the business model, with the valuation of 60 million unchanged, so come and play, uncle.
Including raising money to invest in the stock market is also in progress. There are a lot of big and small things waiting for Xie Jingxing to clean up. It would not be enough to split him into eight pieces. He can only sort out the priorities and deal with them in order.
He encouraged him earnestly: "I have already discussed it with Pony Ma. Whether it is a small loss or a small advantage in the specific details is a side issue. Peng Zhijian said he wanted to seize the leading position, but as a buyer, does Tencent really need to openly compete with us for the leading position?"
"The focus of tomorrow's negotiation meeting is to reach a consensus on the implementation of the subsequent merger and acquisition plan. I believe you will do better than me. After all, I am just an intern and you are experienced."
Su He was so angry that she laughed. She had never seen such a shameless person.
The young man in front of me just wants to prove himself, and he casually says that he doesn't care about benefits, but who among others doesn't want to take advantage of it.
"I have two suggestions for tomorrow's meeting. The first is that the initial valuation of WhatsApp in the promotional brochure is too low. Don't even think about $90 billion. Let's start with $150 billion." Xie Jingxing finally gave a sweet treat and took out some work to appease people.
His evil plan succeeded. Su He didn't care about being angry and frowned as he thought: "According to what you said, WhatsApp is compared with Twitter. Its valuation is as high as 200 billion US dollars. This is unrealistic. You know, Twitter is about to go public."
“So I suggest setting the price at US$150 billion first. WhatsApp’s international customer base and current profit expectations are worth this price,” Xie Jingxing emphasized.
Nowadays, the first year of using WhatsApp is free, and thereafter the service fee is one dollar per year. Considering its user base and revenue growth rate, $150 billion is a bit high, but barely within a reasonable range.
Su He was silent for a moment and said, "This is far beyond Tencent's psychological expectations. I don't think Tencent is willing to spend one-tenth to one-fifth of its own market value to acquire WhatsApp."
"This is my second suggestion. The 'success fee' should have a fixed ratio, and try not to sign a regressive ratio." Xie Jingxing unconsciously restrained his expression and said solemnly.
For investment banks, the biggest source of income from M&A projects is the "success fee", which means earning a certain percentage of the commission based on the transaction amount if the project is successful.
From the perspective of the buyer, they naturally want to spend as little as possible, hence the term "regressive ratio". The buyer first agrees on a transaction amount with the investment bank. If the subsequent successful transaction amount is higher than the agreed amount, the commission that the investment bank can earn will decrease accordingly. The higher the transaction amount, the less the investment bank earns.
Xie Jingxing knew very well how fierce the competition would be for Tencent to acquire WhatsApp. If the regressive ratio was followed, Juntai might not make any profit in the end and would even have to pay Tencent some money.
He even suspected that Pony Ma didn’t believe in his promises or the so-called internationalization plot, but saw an opportunity to overthrow Facebook, just like Tencent and Sina Weibo before WeChat came out…
"Six months is too long for an M&A. The first enemy of our M&A is the media. We must compress the M&A period to the shortest possible time to ensure confidentiality."
"Three months? Then we have to visit WhatsApp in the United States as soon as possible."
"Next weekend, I'll arrange it."
After making the two suggestions, Xie Jingxing pulled Su He to make adjustments to some details in the promotional brochure.
As the two were chatting, there was a knock on the office door. Tang Man smiled and raised her cell phone to signal.
"Keep a good attitude. The most important thing for us right now is to complete this merger and acquisition." Su He reminded softly, forcing a smile and nodding to greet him.
Tang Man tilted her head and said slowly and apologetically, "Excuse me, Mr. Su, can I borrow your man for a while?"
"You're welcome. Think about how to thank me next time." Su He casually put away the many folders spread out on the desk.
Tang Man agreed without taking it seriously: "Of course, I'll treat you to a nice meal when I have time."
"Then I'll leave first, Mr. Su."
Xie Jingxing stood up to stop the fight, walked out of the office in two or three steps, closed the door, and asked, "Did you convince Yunshan?"
"Yunshan convinced me." Tang Man corrected proudly, her high heels clicking.
SF Express is not short of money. The essence of this round of financing is to pay "protection fees". Except for a few top speculative institutions in the industry such as Taihe that are just for show, other potential investors are all strong state-owned enterprises.
This was also the reason she had given for inviting Xie Jingxing before. Such a project could maximize the personal connections of the super rich second generation.
After returning to the office and closing the door, Tang Man revealed directly: "SF Express plans to transfer 25% of its shares and raise about 100 billion yuan."
"You have to talk to Yunshan about this. I don't have the right to decide." Xie Jingxing was helpless.
Tang Man raised her eyebrows playfully and said, "The department head of Yunshan is not qualified to receive protection fees from SF Express. I still need to meet with Chairman Xie Cheng for a talk."
"Putting aside all the messy factors, Yunshan's warehousing and logistics system can indeed help SF Express, and they even have many cooperative businesses themselves." Xie Jingxing argued, he preferred to talk business.
Tang Man patiently explained: "It is precisely because I saw the strength of Yunshan Logistics that I am willing to facilitate this transaction, but it is still inseparable from some external factors. After all, China is a policy-driven and capital-driven market. If Yunshan can't provide enough social energy..."
"OK, I'll make an appointment with Old Xie for you." Xie Jingxing waved his hand to interrupt.
Tang Man leisurely extended the invitation again: "Are you really not going to get deeply involved in this project? I think you have the ability to convince SF Express to take Yunshan's money."
"Yunshan is confident that it can create another SF Express." Xie Jingxing shrugged.
Politics is the concentrated expression of the economy. From this perspective, it is undeniable that Yunshan has a certain social energy, but it is difficult to say whether it can collect protection fees from small businesses like Russian oligarchs.
Anyway, in his previous life, Old Xie didn’t put much effort into investing in SF Express, and Yunshan is not going to die if he doesn’t invest in SF Express.
"Sun Tao, a fund manager in the direct investment department, wants to ask for your help."
Tang Man seemed to want to make things difficult for Su He. She continued without getting discouraged, "The founder of the milk tea brand project you worked on during the last assessment specifically asked to talk to you. This made Sun Tao very embarrassed. He was very confused about what you had done."
"I didn't hide anything. I told him everything before." Xie Jingxing was also puzzled.
Tang Man didn't care about that: "Okay, then why don't you go to the fund to help, it won't affect the filming of the show."
"Actually, there is a secret I haven't told you."
"what?"
"I'm a ninja, I can create shadow clones!"
Xie Jingxing dropped a cold joke and left without hesitation.
He is now busier than the mule in the production team. He would have to be crazy to take on such work on his own initiative. I hope such days will pass soon.
(End of this chapter)
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