Perfection of Rebirth

Chapter 675 Depressed Zach

Throughout August, the world's financial markets have been in turmoil.

Since the subprime mortgage crisis broke out in July and August 2007, it has caused great impact and damage to the international financial order, causing a strong credit tightening effect in the financial market, and the long-term accumulation of systemic financial risks in the international financial system began to be exposed.

Excessive innovation of financial instruments, distorted interests of credit rating agencies, relaxation of monetary policy supervision and other factors have led to the rapid and violent subprime mortgage crisis in the United States.

Many institutions have begun to worry whether the financial crisis triggered by the subprime mortgage crisis will become the most serious financial crisis in the United States since the "Great Depression" in the 20s.

In fact, in the past 30 years, there has been a very strange phenomenon in American society. On the one hand, the American people consume ahead of schedule; on the other hand, the income of ordinary people has been declining.

According to statistics, after deducting the inflation factor, the average hourly wage in the United States is only the same as that of 35 years ago, and the income of a man in his 30s is 30% lower than that of a person of the same age 12 years ago.

Where did that money go?
Quite simply, in a capitalist society, capital is king, and more fruits of economic development flow into the pockets of the rich, so the income gap between the rich and the poor in the United States has continued to widen over the past few decades.

Coupled with the far-reaching impact of the neoliberal policies since the Reagan administration came to power in the early 80s, the U.S. financial industry is seriously lacking in supervision, which lures ordinary people to consume ahead of time through borrowing and speculate in the market.

In this way, when a crisis comes, the ability of ordinary people to bear risks will be greatly reduced, and the crisis will rapidly expand and become stronger, and then more ordinary people and institutions will be affected, and it will grow bigger and bigger like a snowball.

The most obvious manifestation of this crisis is in the stock market.

Led by the U.S. stock market, the global stock market continued to fall throughout August.

2007年8月11日，世界各地央行48小时内注资超3262亿美元救市

The Fed is pumping $380 billion into banks three times a day to stabilize the stock market.

On August 2007, 8, dozens of companies such as Wal-Mart and Home Depot announced that they had suffered huge losses due to the subprime debt crisis, and the U.S. stock market quickly fell to a low point in several months.

On the same day, the three major central banks of the United States, Europe and island countries injected more than 720 billion US dollars to rescue the market again.

On August 2007, 8, the stock price of the largest commercial mortgage loan company in the United States plummeted and faced bankruptcy. The US subprime debt crisis worsened.

……

Various capital injections and interest rate cuts have not stopped the falling stock market. In this case, IPOs have also been affected.

Not to mention the ever-decreasing valuations, even the listing plan was welcomed.

Facebook just hit this gunpoint.

"Zach, Charlie from Citibank contacted me just now, and he suggested that we postpone the listing plan." Assistant Linda came to Zach's office to report on the IPO situation.

Since its establishment in 2004, after more than three years of development, Facebook has become the largest SNS website in North America and Europe.

Basically, Facebook and Xiaonei share [-]% of the world's SNS sites.

After several rounds of financing, Guanghui Group currently indirectly holds [-]% of Facebook's shares and is still the largest shareholder.

However, in terms of voting rights, there is no way to compare with Zuke.

Basically, Facebook's several rounds of financing, the voting rights of the diluted part of the shares were transferred to Zach.

Zach himself is also a relatively strong person. He was cornered by the Guanghui Group back then, so he had no choice but to hold his nose and accept the alliance under the city.

Although he did not lose control of Facebook, Zach has always been worried about making Guanghui Group the largest shareholder of his company, that is to say, letting the parent company of Xiaonei, Facebook's biggest competitor, become his largest shareholder.

Therefore, in several financings, Zach used his voting rights to exclude Korn Ferry Group from financing targets, diluting Korn Ferry Group's equity in a disguised form.

Jiang Hui actually knew this too.

However, Jiang Hui did not stand up to interfere with the financing led by Zack, mainly because Facebook has more than 7000 million users in the United States. It is a dark horse in the American Internet industry and has entered the eyes of the US government.

Yankees will not stand by and watch such a company that holds a large amount of personal information of American netizens, which is a company controlled by Chinese people.

If Guanghui Group continues to maintain its position as the largest shareholder, it will definitely be interfered by the US government with excuses.

Although Guanghui Group indirectly controls these shares through several offshore companies, in front of the US government, all offshore companies are actually transparent. People want to check you, so you don't want to hide anything.

This is also an important reason why potato accepted Google's capital injection at the beginning, and Twitter also introduced Wall Street funds when financing.

When the Celestial Empire is not strong enough, if a Chinese company goes to the territory of the US emperor to eat alone, then you really don't know how to write the dead characters.

At the beginning, when Jiang Hui was preparing for the listing of Xiaonei.com and Meituan.com, he operated the company's domestic and foreign businesses as independent companies, and also considered the impact of this aspect.

"Did Charlie say why? Why didn't he dare to tell me directly?" Zach said a little annoyed when he heard Linda's report.

"Citibank's performance in the stock market has been a mess recently. Their stock price has dropped from $25 to nearly $10. Now Citibank has no energy to help us with the listing.

When Charlie persuaded you to let Facebook go public, he said a lot of benefits and made a lot of promises, but now he can’t keep it. I guess he’s ashamed to see you.” Linda thought for a while and expressed her thoughts .

"It was he who said that now is a good time to go public, and he was the one who said it was postponed. He regarded Facebook as his family."

Zach would agree to let Citigroup become the undertaking bank for Facebook's listing. In addition to knowing Charlie, the manager of the investment department of Citibank, it was more because of Citibank's huge influence on Wall Street in the United States.

Citigroup has various means to help Facebook quickly log on to Nasdaq and assist Zac to complete the holding of the company.

They even planned together how to kick Guanghui Group from the Facebook board of directors.

However, people are not as good as the sky.

Zach just decided to start Facebook's IPO three months ago, and not long after that, the subprime mortgage crisis broke out.

Based on the performance of Nasdaq this month, if Facebook continues to insist on going public, it may break the market.

That would be a shame.

The embarrassment is still secondary, the most important thing is that the market value will definitely not meet expectations.

As the largest Facebook in Europe and the second in the world, the valuation given by Wall Street will not be lower than that of Xiaonei.

If there is no subprime mortgage crisis, if Facebook goes public within this year, its market value will exceed 150 billion U.S. dollars, or even hit 200 billion U.S. dollars. It is very possible.

Well now.

I can only "hehe"!

(End of this chapter)