Rebirth of the Financial Crisis Sweeping the World

  Chapter 451 451 The trillion-dollar giant injecting capital in the future!

  April 18th.

  Wang Guanxi, Luo Baowen, Zhang Xiaolei, Jennifer Lawrence, Ford Ingrid and others ate breakfast, paying attention to the trends of Silicon Valley technology companies.

  Luo Baowen: "BOSS, the chief financial officer of Facebook has resigned."

  Wang Guanxi put down his fork and asked: "Really? Really?"

  Luo Baowen immediately showed Wang Guanxi the news.

  Facebook issued a statement today saying: Facebook confirmed that CFO Gideon Yu will leave the company.

  Gideon Yu worked as an accountant at Yahoo, then joined Google when it acquired YouTube, and switched to Facebook less than two years ago.

  According to the “Wall Street Journal” report, Facebook is currently looking for senior talent with operating experience in listed companies to replace Gideon Yu’s position.

  When Gideon Yu was in charge of the company’s finances, there had been rumors in the market that Facebook was seeking to raise more venture capital financing to promote its exponential growth for several months.

  Soon, the total number of Facebook's global users is likely to reach 200 million, which requires the company to be equipped with expensive hardware and workforce worldwide.

  Previously, endless reports suggested that Gideon Yu was trying his best to get more financing, but failed to achieve much.

  Affected by the economic recession, Facebook’s valuation has suffered, and its value in private equity transactions has been declining.

  According to Forbes magazine’s speculation, Facebook founder Mark Zuckerberg has lost his reputation as a billionaire.

  Wang Guanxi smiled and said: “This Facebook needs money and needs financing, but the chief financial officer Gideon Yu can’t help!”

  Luo Baowen nodded: "Yes, so he was fired."

  Zhang Xiaolei also said: “The predicament of Facebook seems to be not small now.”

  Wang Guanxi smiled and said: "That's natural, wait slowly"

  Thinking about it, Wang Guanxi made another call to the board of directors of Bank of America Corporation and put forward a suggestion to the board of directors of Bank of America Corporation, that is, to stop the unsecured loans of technology companies.

  On April 20, the news came again.

  Wall Street Journal: The well-known American social networking site Facebook is seeking debt financing of up to 100 million U.S. dollars to meet the huge demand for new devices after the number of its users has expanded.

  But some analysts questioned this move, believing that Facebook should re-examine its high-growth, high-cost business model when the market is down.

   Facebook has begun to contact with large financial institutions in the past few weeks, and plans to lease a large number of computers urgently needed for website operation through the latest round of financing.

  It is reported that the method of leasing equipment has the advantages of lower initial cost compared with direct purchase. It has been adopted by many Silicon Valley companies including Google (NASDAQ: GOOG, news, chart) video website YouTube.

  However, the above-mentioned people familiar with the matter said that Facebook has not reached an agreement with these institutions.

  Affected by the financial crisis, the banking industry has become difficult to protect itself and has intensified credit approval.

  For example, Bank of America, which participated in this round of financing negotiations, has just received $25 billion in rescue funds from the federal government. Bank of America is also Facebook's main correspondent bank in business.

   Facebook previously tried to raise more than US$500 million in funds through debt and equity. This is not a small number at the start-up stage of the company, so some people in the industry question the motives of the company’s latest financing plan.

  However, a Facebook spokesperson said in an interview that the company has always paid attention to the control of capital costs, and equipment leasing is one of the methods.

  As for the market speculation whether Facebook is facing a tight funding chain due to the “user growth first and revenue second” model, the company declined to comment.

  Luo Baowen: "BOSS, this Facebook really cannot raise any funds, and Bank of America will not give him any loans."

Wang Guanxi smiled and said: "My No. 4 Fund is a major shareholder of a U.S. company, holding 1 billion shares of Bank of America. Loans require collateral assets. What else can Facebook mortgage?"

  Banks that cooperate with Facebook include Silicon Valley Bank and Bank of America Corporation.

  When Facebook was just getting started, Silicon Valley Bank also supported Facebook, but Silicon Valley Bank refused to lend to Facebook, and Bank of America also rejected unsecured loans.

   Zhang Xiaolei said: "Mr. Wang, are you planning to acquire Facebook?"

  Wang Guanxi smiled and said: "If it can't be acquired, Mark Zack will not agree. I just raise funds, and then promote Facebook to go public."

  Zhang Xiaolei asked: “Nowadays banks are tightening loans, and venture capital firms are afraid to invest. Can Facebook survive this economic crisis?”

  It is very dangerous if the technology company can't raise money.

  Wang Guanxi said indifferently: “Of course it will work. The economic crisis is only temporary, so it’s fine to survive.”

  Zhang Xiaolei suddenly admired and said: "Mr. Wang, in the economic crisis, only people like you are the only ones who can get in the water."

  Wang Guanxi smiled; "It’s just luck."

  Luo Baowen asked: "Boss, will Mark Zach accept our huge financing?"

  Wang Guanxi smiled and said: “I will let Silicon Valley Bank and Bank of America break off Facebook’s loan while also collecting debts. This is definitely uncomfortable for Mark Zach.”

Silicon Valley Bank is quite well-known in Silicon Valley, specializing in supporting technology companies, and these technology companies have little assets, rely on unsecured loans, and have high valuations. That is because of its high potential, but its own net assets are very high. Generally speaking, the valuation of high-tech companies is several times, or even 10 times, of their own net assets.

In the early stage, high-tech companies were very money-burning. If there is no money to burn, then the company’s capital flow will be cut off. Now, during the economic crisis, Facebook’s cash is actually not much. If it weren’t for Microsoft’s financing last year, Li Ka-shing’s financing is now estimated. The flow of funds is broken, and the valuation must be extremely low.

  Fortunately, Facebook still has a lot of cash, which can be resisted.

  But Silicon Valley Bank and Bank of America dunning Facebook at the same time, so it’s different. I don’t know how many times the pressure has increased!

   "Mark Zack will definitely need financing urgently. If it doesn't, where will the company get the money?"

   "Maybe I still have a chance to become a lifesaver for Facebook."

  Zhang Xiaolei: "Mr. Wang, your method is really good"

  Luo Baowen: "BOSS, you are too cruel"

  Wang Guanxi yawned: "Just wait quietly!"

   Then everyone talked and laughed.

  At this moment, the 25-year-old Mark Zak, the headquarters of Facebook in Silicon Valley, and the board members looked at the report in hand, and their hearts were under great pressure.

  Just a month ago, Facebook board members emphasized that the company has enough cash to maintain the current growth rate, so there is no need to refinance.

  In addition, the launch of a debt loan program does not mean that another door has been closed.

  The company is still open to selling equity, although how to value it may become a problem.

  In October 2007, Microsoft invested US$240 million in Facebook, bringing the latter’s market value to US$15 billion. Hong Kong millionaire Li Ka-shing later invested US$120 million in Facebook at the same valuation.

  However, in view of the sharp decline in the stock market, most people believe that it is difficult for Facebook's equity to obtain such a high premium.

  In September 2008, the valuation was left with 4 billion U.S. dollars.

   is now lower.

  As an unlisted company, Facebook does not need to publish financial reports to the public on a regular basis, but at present, it is unlikely that revenue will catch up with expenses.

  On the one hand, online advertising, which contributes almost all of its revenue, is being hit by the economic recession.

  Many advertisers have adjusted their marketing methods while reducing their budgets, such as increasing the number of text ads on the Google search page.

  On the other hand, as the website has added tens of millions of new users in recent months, the company’s costs have also soared.

Research data provided by comScore shows that as of the end of March, the number of Facebook users worldwide had reached 275 million, compared with only 100 million in the same period last year.

  The increase in operating costs is mainly reflected in computer servers, storage, power consumption, and Internet bandwidth.

  It is worth noting that Google writes complex software to achieve compatibility with its own servers and storage systems, while Facebook generally purchases technical equipment directly from manufacturers, which is convenient but more expensive.

  Some analysts said that Facebook needs to double its infrastructure to support 175 million new users.

  In addition, the internationalization efforts made by the management did not seem to bring immediate results.

  The research organization eMarketer predicts that the US market will bring Facebook's revenue of 230 million U.S. dollars this year, an increase of 10% from last year's estimated value of 210 million U.S. dollars.

  Online advertising industry analysts said that most of the current user growth of social networking sites comes from overseas regions, but because these markets have yet to mature and the scale of advertising is limited, it is more difficult to generate strong revenue.

  Makzak put down the report in his hand and said: "Everyone, many users in the fastest world believe that we violate privacy, and you all have your opinions."

Facebook recently improved the "friend status update" on the user's homepage and introduced new terms of service. This move triggered a heated debate among users around the world. Many users were dissatisfied with the new version and believed that the new terms of service violated them. Privacy.

  Now that the arrow has been sent out, the response in the market is not satisfactory.

  Then everyone expressed their opinions.

  After listening, Mark Zak thought for a while, and said: "Now it has been launched, no more changes, users will slowly adapt."

  I can’t manage that much now. As long as we go all the way to the end, I believe users will adapt.

  The newly emerging challenger, Twitter, also feels crisis.

  At this time, a director said: "Chairman, Twitter has raised US$330 million and started to burn money to attract users."

  Mark Zuck's face suddenly became gloomy.

   "The Twitter company actually raised 330 million US dollars, which makes me wonder!"

   "This Twitter company is not profitable, and advertising revenue is not much. It actually received a financing of 330 million US dollars!"

   "Now the media is still saying that our company was abandoned by the venture capital market!"

  Speaking of this, Mark Zak was jealous and atmosphere.

  "Are the heads of the managers of these venture capital companies flooded?"

  Recently, Facebook’s financing has encountered numerous obstacles to borrowing.

  And "Forbes" magazine also said that he has lost his status as a nameless billionaire, which is simply humiliating him.

   Then he asked: "Which are the venture capital firms that invested $330 million in Twitter?"

A director said: "The ten funds that have raised funds for Twitter have not been announced, and this investment is also confidential. It is just that Twitter has suddenly announced that it has raised US$330 million in financing, otherwise everyone does not know the financing. How much!"

  Mark Zack suddenly became more gloomy, and said fiercely: "This Twitter company's user base is cheating, don't these funds know?"

   "My head is getting water!"

  At this time, he borrowed a call from the credit manager of Bank of America Corporation, saying that Bank of America is now tightening loans, no longer making unsecured loans, and intending to collect debts.

  Makzak was surprisingly angry. He had a good talk before, unsecured loans of 100 million US dollars, and now he is no longer taking loans!

  In the current economic crisis, various businesses have reduced their advertising, and Facebook’s advertising revenue has fallen sharply.

  The daily expenses are huge.

   Then Mark Zak started to call, first called Silicon Valley Bank and asked the newly appointed CEO of Silicon Valley Bank, Greg Becker, to give some unsecured loans, but was declined again.

  This Silicon Valley Bank used to support Facebook when it was first founded, and then after the CEO was replaced, it has changed, and it plans to collect debts.

   is simply annoying him.

  Silicon Valley Bank, is Bank of America going to fall into trouble?

"asshole!"

  Markzak continues to think of a way.

  Time slowly passed, and poor Markzak got a gray nose.

  During the economic crisis, everyone is afraid to invest or borrow money.

   And Forbes Media is still taunting him, saying that he has lost the notoriously low position of billionaires.

  Some small media criticized him in order to gain traffic, saying that he is a Silicon Valley liar.

  April 22.

  CNN media reported that Michael Arlington, the founder of the technology blog TechCrunch, published an article today stating that Google and Facebook had had “low-level conversations” on investment or acquisition matters, but these conversations ended up in the end.

  The reason why Google and Facebook did not reach a deal may be that Google’s internal assessment valued Facebook at only US$2 billion, which Facebook categorically cannot accept.

   Facebook will raise as much capital as possible through the issuance of bonds.

  If revenue growth can reach the expected level, Facebook’s valuation will be higher.

  Before, Microsoft and Hong Kong’s richest man Li Ka-shing successively injected capital into Facebook. At that time, Facebook was valued at US$15 billion. The industry generally believes that this valuation is inflated.

  Sources said that Facebook expects its revenue this year to exceed 400 million U.S. dollars.

   Facebook’s current cash surplus is about 300 million U.S. dollars, and monthly expenditures are 20 million U.S. dollars. At the current growth rate, even if it no longer raises funds or does not have any revenue, Facebook can persist for 15 months.

  The news stated that Facebook plans to raise more funds this year to "persist in" until it goes public, or at least survive the current economic crisis.

  At this moment, the Crown Manor in Pacific Heights.

  Luo Baowen said: “BOSS, Google has valued Facebook at 2 billion U.S. dollars, and wanted to buy Mark Zak’s company, but refused.”

  Wang Guanxi smiled: "Makzak must have refused, this is a humiliation to him, after all, Facebook still thought it was worth 15 billion U.S. dollars last year."

  Now the global stock market has fallen so much, the stock prices of many listed companies have fallen by more than 50%, and some have fallen by more than 90%.

  The valuation of these non-listed companies has naturally fallen a lot.

  Zhang Xiaolei said: “During the financial crisis last year, Google valued Facebook at US$4 billion, and this year’s valuation of US$2 billion is normal.”

  Wang Guanxi smiled and said: “Google now has a market value of more than 100 billion U.S. dollars. As a giant in the Internet industry, the valuation of Facebook should be very objective.”

  Zhang Xiaolei smiled and said: “Yes, Facebook expects its revenue to exceed 400 million U.S. dollars this year. In fact, this is impossible. It is true that it will lose money this year.”

  Wang Guanxi smiled and said: "It's just a hard mouth."

  Luo Baowen asked: "BOSS, are you going to raise funds for Facebook now?"

  Wang Guanxi nodded: “Of course, now is the time to raise money. Let’s not let it go down in May. Facebook’s valuation has rushed up. It should be the time when Facebook’s valuation is the lowest.”

  Luo Baowen asked: "Then how much do you value it? The valuation is low, Mark Zak must be unwilling."

   "That's right, Mark Zak will definitely not accept the low valuation." Wang Guanxi thought for a while and said: "I plan to invest heavily in Facebook so that Facebook will no longer be short of funds and burn money until it goes public!"

  Although American investment companies have no confidence in Facebook this year, in September of this year, Facebook received a Russian DST investment of US$200 million and was valued at US$10 billion.

  In fact, with the large-scale printing of money by the Federal Reserve, the economy has gradually recovered, and the follow-up Facebook development momentum has been very strong, and the number of users has also increased sharply.

  Currently, Twitter is still unable to challenge Facebook.

  In 2010, investors valued Facebook at a minimum of 12 billion U.S. dollars and a maximum of 59.4 billion U.S. dollars

  In September 2011, Facebook’s valuation rose to 87.5 billion U.S. dollars

  In March 2012, its valuation was 102.8 billion U.S. dollars. After the IPO price was 38 U.S. dollars per share in May, its valuation was 104 billion U.S. dollars.

  “At present, Facebook is still in debt. I plan to inject capital to make it pay off the debt. I will raise enough money for Mark Zak at a time. In the future, he will not need to dilute his equity.”

  Luo Baowen asked: "Boss, how much do you plan to value? How many shares do you want?"

  Wang Guanxi thought for a while: “Google’s current valuation of $2 billion is definitely not enough. I don’t know how much the valuation is, but I want 25% equity.”

Facebook is an AB two-tier equity design. What Mark Zak raises to investors is also Class A shares, one share has one vote. Even if Wang Guanxi holds 25% of the shares, they are all Class A shares, with voting rights. Not much.

  But, what he wants is Facebook to go public, the stock price takes off, and then the stocks he holds increase wildly.

  In the future, if Facebook goes public, if 10% of the shares are publicly offered, his shares will be diluted to 20%, but this 20% equity is worth hundreds of billions of dollars.

  At this time, Zhang Xiaolei said: "Mr. Wang, if you want 25% equity, at least double its valuation."

  Luo Baowen: "Then give Facebook a valuation of $5 billion?"

  Wang Guanxi shook his head: "Maybe it's not enough."

  Luo Baowen: "US$6 billion?"

  "This is $4 billion higher than Google's $2 billion offer, but it’s three times the valuation."

  Wang Guanxi thought for a while and said: "At present, the No. 1 Fund has 1.9 billion US dollars left. I have invested in Facebook, and I have invested in Tesla and SpaceX. The money is not enough."

  Zhang Xiaolei said: "Let’s give you a loan from Standard Chartered Bank. Last time you were so anxious to pay off our $2 billion, I knew you would definitely need money."

  Wang Guanxi smiled and said; "Then I will pledge Amazon's stock to you."

  Currently, the No. 1 Fund holds 80 million shares of Amazon.com. Now Amazon’s stock price is at $65 per share, valued at $5.2 billion, and it can borrow $2.6 billion.

  Zhang Xiaolei said; "Then we will lend you 2.5 billion US dollars to your No. 1 Fund."

   Soon, Standard Chartered Bank loaned Wang Guanxi's No. 1 Fund with 2.5 billion U.S. dollars. For this reason, Amazon's stock was mortgaged to Standard Chartered Bank.

   Then Zhang Xiaolei said; “Should we go to Lanai? You can talk to Mark Zak about financing on Lanai again, which makes you more capable.”

  Wang Guanxi nodded: "This is a good note. I have been playing in San Francisco for a few days. Lanai Island is more suitable for vacation. I just happened to discuss business with Mark Zak and let him meet the world."

So Wang Guanxi, Luo Baowen, Zhang Xiaolei, Jennifer Lawrence and Ford Ingrid flew back to Lanai again.

  Then the Crown returned to San Francisco again.

  ··

  April 24, morning.

  Wang Guanxi’s Ma Tsai, Silicon Valley Bank’s CEO Greg Becker contacted Mark Zach, who was in trouble, and said that there was a super rich man who planned to invest in his company and asked to go to an interview.

  The news media has always said that Mark Zack is a nominal billionaire, and now this nominal billionaire status has been used by Fox Magazine to taunt him to gain traffic, which makes Mark Zach gritted his teeth with anger.

  He has been seeking financing for this period of time, but he got a bad nose. Fortunately, Silicon Valley Bank, which helped him in the past, has brought good news.

  So Mark Zak came to the Silicon Valley Bank Building. After seeing the CEO of Silicon Valley Bank, he excitedly said: "Mr. Greg Becker!"

   "Mr. Markzak, you look a little haggard lately" Greg Becker smiled.

   "The company has encountered some problems, but it's okay, it should be resolved soon." Mark Zak did not complain, and he was very confident.

  If you are not confident, you can't get money from investors.

  Anyway, the control of the company has always been in his hands.

  It is a good thing that the super-rich will invest in his company this time.

  After a few conversations, the two arrived at San Francisco’s International Airport.

   Mark Zach: "Greg Becker, what are we doing at the airport?"

  Greg Becker said: "My boss is not in San Francisco now. He is on vacation in Hawaii. Let’s fly there."

  Makzak asked again: "Have you booked the plane ticket to Hawaii?"

  Greg Becker: "No order, no order!"

  Then Greg Becker came to the airport with a confused look of Markzak, where the'Crown' was parked.

  "This is my boss’s private jet, let’s take this over there"

  "Okay" Mark Zak then boarded the plane with Greg Becker, looking at such a luxurious interior, very excited and excited, and asked: "This private jet should cost hundreds of millions of dollars, right?"

  He is envious, he will also build one in the future.

   "Well, it was bought from Boeing for $500 million" Greg Becker laughed.

  Mark Zach took a breath, and it was 500 million US dollars!

  Now he is nothing more than a nominal billionaire. The editor of Fox Magazine also taunted him for losing his status as a nominal billionaire.

   Sooner or later he will slap these people in the face.

  After a few hours' flight, I came to Lanai.

During the period of   , the high-end service on the private jet made Mark Zach almost intoxicated. This is simply too rich and too extravagant.

  Although he is a nominal billionaire, he has never enjoyed the life of a tens of billions of dollars.

  This $500 million private jet cannot be played without a person worth tens of billions of dollars.

  Soon the plane landed at Lanai Airport.

  Mark Zak learned about the private island of the boss of Greg Becker, and was dumbfounded again.

  It turns out that Greg Becker’s boss is the mysterious figure who bought Lanai from the media tycoon Murdoch!

   550 million USD private island!

  This is something he can't envy.

  Then he was loaned to Lanai Manor by the car.

  When she saw Wang Guanxi, she was dumbfounded again.

  He thought he was a genius wizard, the first young talent in Silicon Valley, but he did not expect that a super rich man who was younger than him suddenly came.

  There are 500 million US dollars in private jets, and 550 million US dollars in private islands.

   is worth tens of billions of dollars. This is incredible. How did he do it?

   "Mr. Markzak, please!"

  "Okay, Mr. Wang"

So the two walked into the manor side by side. After a sumptuous dinner, Wang Guanxi said: "Mr. Mark Zak, I want to invest a lot of money in Facebook, so that Facebook can pay off all debts and not be short of money, you You can buy the company you want to buy, and after 3 years, let Facebook go public!"

  "In the past 3 years, your company will not lose money, and you do not need to raise funds to dilute the equity. You can also acquire companies that are threatening to Facebook."

Markzak wiped his mouth and asked, "Mr. Wang, how much do you plan to invest? If there is no shortage of money for 3 years, not a few billion dollars will not work. My company is burning money now and is doing business all over the world. I have a lot of expenses every day, and I plan to acquire FriendFeed... and even Twitter."

  Wang Guanxi smiled and said, "This is totally fine."

  Mark Zak was surprised, and then asked: "Then how much do you plan to value? How much equity do you want?"

  "Say it first. I'm just financing Class A shares. I only have 1 vote per share. I won't raise Class B shares."

   "No problem raising Class A shares" Wang Guanxi thought for a while and said: "Google gives you a valuation of 2 billion U.S. dollars, I value you 6 billion U.S. dollars, and raises 2 billion U.S. dollars."

  Mark Zak struggled for a moment, and said: "Six billion dollars is low, you value 8 billion dollars, how about I let you inject 2 billion dollars?"

  "You will own 20% of the equity, all of which are Class A shares"

Anyway, he holds all Class B shares, with 10 votes per vote. He firmly controls the company. He is not worried about Wang Guanxi’s involvement in his company. Unlike Jobs, he founded Apple and was then caught by shareholders. We drove out of Apple, and finally came back to Apple.

  So he must firmly control the company.

Wang Guanxi said: "I valued you 7.5 billion US dollars and raised 2.5 billion US dollars. In the future, Facebook will go public and raise 10%. I still hold 20% of the shares. Don’t worry, they are all Class A shares. Your company is still yours. Company, but you can’t mess around, so we have to sign an agreement. Under special circumstances, I can withdraw half of my investment. How about?”

   Mark Zack smiled and said, "This is no problem, I promise you!"

  "Mr. Wang, you can rest assured that your money will not be invested in vain. As long as I survive the economic crisis, Facebook's future market value will definitely be tens of billions of dollars!"

  "Your investment must be more than 5 times!"

  So the two signed an agreement.

  The No. 1 Fund transferred 2.5 billion US dollars to the Wang Venture Capital Foundation, and injected capital into the future trillion-dollar giant Facebook!

   acquired a 25% stake.

  (End of this chapter)