Winning the new financial era

Chapter 429 $800 Billion Valuation Betting

Kuaishou started the second round of negotiations with Zhonghe Group, and Su Hua offered US$100 billion.

"$100 billion~"

Zhang Yida muttered softly, frowning tightly, looking very embarrassed.

Su Hua looked at Zhonghe Group's negotiation team with great interest, including CEO Lu Qi, investor Xu Xiaoming, and Zhang Yida, a total of three people.

For Kuaishou, he and Chen Yixiao, plus angel investor Zhang Fei.

Exactly three on three!
As for institutions such as Penguin, Blackshirt Capital, Qiandu, and Ruixiang, they did not show up, mainly to avoid suspicion.

"Too high."

After a while, Zhang Yida shook his head and said, "According to this quotation, the valuation of Doushi and Musical.ly can reach 500 billion US dollars."

He looked at Su Hua, "If you agree to Kuaishou's 5 shares for 1 share, I can agree to this plan!"

Zhang Fei's heart moved, and he asked: "Doesn't the package include pinduoduo?"

"Ha ha!"

Zhang Yida glanced at Zhang Fei, thinking really beautifully.

He said with a smile: "Pinduoduo is valued at 200 billion U.S. dollars. If you count it in, only 7 shares in Kuaishou are worth 1 share in Zhonghe Group.

Merged into a new company, 8 shares can be exchanged for 1 share, and an additional 12.5% ​​of the new company's shares will be issued to you.

Of course, this refers to the full equity replacement, no cash plan. "

Zhang Fei laughed, "I heard that although Mr. Zhang is a history student, he has a top-notch calculation. I met you today, and you really deserve your reputation."

There was a thorn in the words, and Zhang Yida could also hear it.

Over the years, the major investment institutions have bet against him, but none of them have won. The venture capital circle spread rumors, and his reputation of "skilled in calculation" spread like wildfire.

This is not belittling, but the greatest compliment to yourself.No matter what others think, anyway, Zhang Yida thinks so.

Investors often don't want the founders to lose, because that means a lose-lose, but the founders lose more.

To say that he is "good at calculating" does not just refer to calculating investors, but also refers to his keen sense of the company's development expectations, market trends, and so on.

Zhang Yida chuckled, "If you do the math well, you won't suffer. For shareholders and partners, there is someone who will do the math for them, and they can count their money with peace of mind."

Xu Xiaoming also came out to help at the right time, "Yes, investing in Yida is the most correct thing I have done in my venture capital career.

He has never let us shareholders down. Everyone is playing poker and skiing at ease in the back, and he is making money for us in front of the stage.

It's embarrassing for investors to be so easy.

Two months after the investment, he told me that the next round of financing is going to be held, and investors have been found...

After a while, he told me that the company was about to go public, and all arrangements for underwriters and roadshows had been made..."

Zhang Fei also heard another meaning, which was talking about Zhang Yida's past record, trying to convey a message to himself:
Kuaishou merged into Zhonghe Group, and there will definitely be more lucrative investment returns in the future.

Zhang Fei does not doubt that Zhonghe Group has a brighter future, but this is not a reason to lower the valuation of Kuaishou.

On the contrary, it is precisely because Zhonghe Group may become the third pole of China's Internet in the future and has a bright future.

Therefore, he has to increase the valuation of Kuaishou in exchange for more shares of Zhonghe Group.

"Mr. Zhang, 80% or more of this merger and acquisition is a share swap transaction, and cash transactions account for less than 20%.

You also know about valuation, it was blown out before it went public.

Is $100 billion much? "

Zhang Fei shook his head, "Not much at all, with the acquisition of Kuaishou, Zhonghe Group will no longer be invincible in the domestic short video field.

This, for Zhonghe Group, is of great strategic significance.

In addition, a nearly monopolized domestic short video market will also be more conducive to Zhonghe Group to tell a good story in the capital market.

Among other things, hasn't Pinduoduo been doing the market outside the Fifth Ring Road?
After Zhonghe Group acquired Kuaishou, it can make good use of Kuaishou's market share and traffic in the sinking market, making Pinduoduo's business to a higher level. "

These words are correct, and the benefits of Zhonghe Group's acquisition of Kuaishou are indeed endless.

However, given the high valuation of Kuaishou, the shares of Zhonghe Group will be diluted, and Zhang Yida, the major shareholder, will lose the most.

Good stuff, but who wouldn't want to get it at a cheaper price?
前世张益达快重生那会儿，也就是19年10月，拼哆哆的市值是450亿～500亿美金，快手估值250亿～280亿美金。

A series of short video software such as Douyin, Watermelon Video and TikTok have a valuation of at least half of ByteDance’s valuation of US$500 billion, which is US$[-] billion.

In this life, it is expected that Pinduoduo, Doushi, and Musical.ly will reach a valuation or market value of around US$1000 billion in two years.

If Kuaishou can achieve the same results as in his previous life, 4 shares are worth 1 share of Zhonghe Group.

Therefore, even if Kuaishou reported a valuation of 100 billion U.S. dollars, and at the same time valued Zhonghe Group at 400 billion U.S. dollars, it was still within Zhang Yida's psychological tolerance.

However, we also need to consider that Douyin and Musical.ly in this life are much stronger than Douyin and TikTok in the same period because they started more than a year earlier.

So the Kuaishou at this moment is definitely not worth a quarter of Zhonghe Group.

So no matter how much Zhang Fei praised Kuaishou and described the various benefits brought by the successful acquisition, Zhang Yida would not let go.

"We can give Kuaishou a valuation of US$100 billion, but Zhonghe Group will acquire Kuaishou at a valuation of US$700 billion.

That is to say, 20 billion U.S. dollars in cash, plus 80 billion U.S. dollars in Zhonghe Group stock. "

Cash is a small issue, and the biggest controversy in the M&A case is equity.

The valuation of Zhonghe Group is 400 billion US dollars or 700 billion US dollars, which has a great impact on the shareholders of Kuaishou.

According to the former, in addition to cash, the shareholders of Kuaishou can also obtain 16% of the shares after the additional issuance, while the latter only has 10% of the shares.

Su Hua, who hadn't spoken much, said, "Mr. Zhang, 95 billion US dollars, this is our last concession.

In addition, Zhonghe Group's valuation of 700 billion US dollars is too outrageous. It has only been a long time since the last round of financing, and the valuation has increased by 300 billion US dollars. "

"That's right, Mr. Zhang, if you are sincere, you should offer a sincere price." Chen Yixiao echoed.

Zhang Yida thought for a while and said, "Why don't you listen to my new plan.

What you are worried about is that Zhonghe Group is not worth 700 billion US dollars, right?

After Zhonghe Group acquires Kuaishou, its valuation will reach US$800 billion.

In addition to US$20 billion in cash, we will issue an additional 10% of shares to the original shareholders of Kuaishou.

Your concern is, is this 10% stake in the new group worth $80 billion? "

Zhang Fei, Su Hua, and Chen Yixiao all nodded.

This is what they think. Although Kuaishou is not worth 100 billion U.S. dollars at present, the bubble is only worth billions of U.S. dollars.

Even if the valuation of Zhonghe Group has increased by a part recently, counting as 50 billion US dollars, the bubble still has 250 billion US dollars.

In terms of bubbles, it is much bigger than Kuaishou.

Zhang Yida said with a smile: "This dispute is easy to resolve. Let's conduct a round of betting, and we will bet that Zhonghe Group's next round valuation will not be less than 800 billion U.S. dollars.

If the valuation is lower than this number, I will make up the difference for you. "

Zhang Fei frowned, seeing how confident Zhang Yida was, he always felt that there was a conspiracy!
Su Hua quickly began to calculate in his mind. If Kuaishou was sold to Zhonghe Group for US$80 billion according to the original plan, he would get US$16 billion in cash and US$64 billion in stocks.

If the pre-merger Zhonghe Group is valued at US$420 billion, the post-merger Zhonghe Group is valued at US$500 billion, and the share they get is about 12.8%.

This is the most ideal result!
According to the gambling plan proposed by Zhang Yida, they received 20 billion US dollars in cash, plus "80 billion US dollars" in stocks.

These 80 billion US dollars of stocks, accounting for 10% of Zhonghe Group, have certain bubbles.

Based on a reliable valuation of US$500 billion, the real value is US$50 billion.

The difference of 30 billion US dollars can be regarded as a call option, and it is an option with Zhang Yida at the bottom.

To put it simply, US$70 billion is stable, and the other US$30 billion is not yet stable, but with Zhang Yida's promise to cover the bottom line, it should be fine.

What does Zhang Yida earn?

I have enough confidence and certainty in Zhonghe Group and feel that I can win, so I throw out this plan in exchange for less dilution of shares.

Su Hua analyzed the plan very thoroughly.

This plan is very beneficial to one's own side. No matter how you calculate it, the target price of 80 billion US dollars has been reached.

Can do it!
Su Hua and Zhang Fei looked at each other, but the latter shook his head slightly, signaling him not to agree.

Zhang Yida had a panoramic view of their expressions and small movements, it didn't matter if he agreed or not, he still had plan B if he didn't agree.

"Mr. Zhang, can we discuss it?" Zhang Fei looked at Zhang Yida and asked for his opinion.

"Of course it's fine!"

Zhang Fei nodded to Zhang Yida, and dragged Su Hua and Chen Yixiao to the next room.

After seeing Su Hua and the others close the door and walk out, Lu Qi, who had been silent all this time, said, "To win the bet, you need to earn at least 30 billion dollars."

Zhang Yida shook his head, "How can there be so many, didn't you see that Su Hua started to let go to 95 billion US dollars?
I estimate that their reserve price should be between US$75 billion and US$80 billion.

Just calculate it at $80 billion, we have to pay $16 billion in cash, plus 12.8% of the shares. "

Xu Xiaoming looked at Zhang Yida and said with a smile, "So you would rather pay an extra 4 million US dollars in cash, and keep an extra 2.8% of the shares."

Zhang Yida nodded, "According to the valuation of 500 billion U.S. dollars after the acquisition of Kuaishou, 2.8% of the shares are 14 billion U.S. dollars. If you pay an extra 4 million U.S. dollars in cash, you still have a profit of 10 billion U.S. dollars!"

In fact, according to Zhang Yida's own estimate, the 2.8% stake is worth more than US$14 billion.

Based on a valuation of 28 billion U.S. dollars, it is worth at least [-] billion U.S. dollars, and may even be more than that.

As the major shareholder accounting for more than 60% of the shares, most of the shares earned by the pair will go into their pockets, and other shareholders will follow suit.

Lu Qi nodded. The logic here is very simple, which is to use VAM to lower the purchase price.

On the surface, it gave Kuaishou a valuation of US$100 billion, but Zhonghe Group also paid a premium for itself!
And because most of the transactions adopt the equity replacement plan, it actually lowers the equity dilution ratio.

There is also a risk, which is the $800 billion valuation.

If this valuation is not reached by then, assuming it only reaches a valuation of US$600 billion, the 10% equity held by Kuaishou’s original shareholders is only worth US$60 billion, and Zhang Yida needs to make up the difference of US$20 billion.

"Time, to reach this $800 billion valuation, the most important thing is to bet against time.

In one year, it is a bit rushed, but in two or even three years, it is not so urgent. "

Lu Qi pointed out the core problem right away.

Zhang Yida nodded in agreement and said, "Yes, it's mainly about time, a year may be a bit of a stretch.

In one and a half years, after entering 2019, the valuation will not be lower than US$1000 billion. "

Xu Xiaoming's face was overjoyed, and he asked: "1000 billion US dollars? Is this true?
Fuck, I can brag about this project for the rest of my life.

When I get old, I will publish another book called "New Giants Emerging from the Mobile Internet Era". "

Zhang Yida laughed, "Mr. Xu, you can start writing now. After a year or two, you just finished the book, which happens to be published, and at the same time catches the interest of Zhonghe Group."

Seeing Zhang Yida's confidence, Lu Qi also thought about it carefully, and felt that it was not a big problem to win the bet.

It mainly depends on the period of the bet!

In addition, there is nothing else that can stop the pace of Zhonghe Group's rise.

　Thank you, please call me a big book friend, Liu Xiao for your reward!

　　
　
(End of this chapter)