Soviet Godfather

Vol 5 Chapter 103: Leverage King KKR

Kkr Group is not the most powerful investment company in Wall Street, but this company has its own unique business model, and it has taken a foothold in the global capital center of Wall Street. Kkr Group was founded in 1976 by Kravis Kravs, Roberts Roberts cousin, and the mentor of the two people when they worked at Bear Stearns, one of the five major investment banks, Coleberg Kohlberg co-founded, the company's name comes from The initials of the surnames of the three people.

Kkr Group is a well-known private equity investment institution in the US stock market. The so-called private equity mainly refers to its funds coming from a small number of private investors and institutional investors, rather than raising stocks and bonds through public channels such as the New York Stock Exchange. funds. In addition to the characteristics of the source of funds of the general private equity, the most different point of the kkr group is that this company often uses a high leverage method for acquisitions.

At the beginning of the establishment of the kkr group, the main source of funds was bank loans. They relied on their personal connections to borrow funds from the bank, and later invested in the stock market to gain a big gain. The case of small snakes swallowing elephants was often staged. Thanks to the superb investment level of kkr, although the risks of leveraged buyouts are extremely high, the returns are often huge. Relying on this skill of leveraged buyouts, kkr has jumped from a small workshop-like company to a Wall Street company. Star investment company.

Kkr now manages companies with a market value of nearly 50 billion U.S. dollars, and their financing methods are smoother. Bank loans are no longer the main source of leveraged funds for Kkr. Kkr now relies on the issuance of junk bonds, which refer to bonds that have not been rated by Standard & Poor’s and whose income is not guaranteed, but there may also be bonds that may be normally redeemed to raise funds. Once a company is targeted by Kkr, it often becomes meat on the cutting board. Kkr will **** every drop of bone marrow from this company before selling it.

This time, Kkr focused on Motorola, but not because Motorola itself has something worth investing in, but because Motorola has become the fate of the dispute between Yota Communications and AT&T.

Yota Communications has already placed a heavy bet in the Iridium Project, and it is no longer possible to look back. If Kkr manipulates Motorola’s board of directors to withdraw from the Iridium Project at this time, Yota Communications will suffer a huge loss. For AT&T, Motorola is equally important. If Kkr sells its shares to AT&T, then Yota Communications will be driven to a dead end. At that time, AT&T may be able to use this to buy shares or acquire the king of mobile communications.

This investment by kkr is nothing short of grabbing food and chestnuts from the fire. However, both Yota Communications and AT&T have overlooked this weakness of Motorola. The capital blackmail of kkr is destined to take down Yota Communications and AT&T. However, from the Bloomberg News report, Kkr is more optimistic about AT&T, because everyone on Wall Street knows that in this communications battle, Goldman Sachs and Morgan Stanley are on AT&T’s side. Without Motorola's satellite technology, Yota Communications would never be able to stand up.

Eva now regrets her carelessness. For a long time, Eva has only focused on Yota's leading edge in technology, ignoring capital issues. Yota was unable to go public for more investors due to its own willingness, which also restricted the development of Yota Communications in a disguised form. Now it is useless even if the entire Gorky family funds are staked up, even if Sergei has money no more. May head head-to-head with top investment banks such as Goldman Sachs and Morgan Stanley.

The news that kkr sniped Motorola quickly spread throughout the Wall Street investment community. Now those investors on Wall Street finally understood the logic of investing in Motorola. Everyone started to eat Motorola’s stock crazy. Everyone wanted to be in the United States. The Telephone and Telegraph Company took a share of Motorola's stock before it sold.

But if you want to make money, you don’t need to buy Motorola’s stock. According to the current situation, after AT&T has acquired 20% of Kkr, it only needs to acquire another 10%. , Because once a company acquires 30% of the shares in the open market, it can submit a tender offer to the NYSE. That is to say, whoever grabs 10% of the bargaining chip now is eligible to go. Negotiate the price with the wealthy American Telephone and Telegraph Company.

Eva originally tried to find some partners from Wall Street to try the same acquisition of Motorola, but Eva's action was too late. Wall Street investment institutions are not optimistic about her. And Motorola’s stock is now almost at a price per day. Eva would have to spend a lot of wronged money if she wanted to prevent Motorola from being acquired. This is far beyond the limit that Yota can withstand. Now even if all of Yota's liquidity is taken out, it is impossible to eat 30% of Motorola's shares.

In desperation, Eva can only contact Sergei again. When Sergei learned the news, he also felt a little bit tricky. For a long time, Eva’s Yota communication has been developing smoothly, and never thought that one day would be driven to desperation by a small Kkr.

"How long will it take for our satellite communications experiment to be completed?" Seresha tried his best to calm down his tone. He didn't want Eva to worry too much about these things. Yota Communications has never contacted the capital market since its development~www. readwn.com~ has always been privately invested by Sergey Shah. The excessive protection makes Yota Communications lack of vigilance and guard against Wall Street. Sergey has some connections in the investment community in the UK, but he has no foundation in the United States. Moreover, behind AT&T stands a super luxurious investment lineup of Goldman Sachs and Morgan Stanley. Not to mention Sergey Sha, even if all the banks in the Soviet Union are added together, they are not rivals of these two investment banks.

"It will take about a year and a half, but now Motorola's attitude has changed. I am afraid that the other party will break the contract!" Eva said disappointedly.

"Eva, don't worry about Motorola's affairs, the Iridium plan will continue, and I will take care of the other things?" Seleosa comforted Eva on the phone.

"But Sergey Sha..."

"Nothing but, don't worry, I can handle this!" Sergey interrupted Eva and promised again.

...

In an office building lined with Wall Street in New York, the two founders of an inconspicuous small investment consulting company are carefully reading all the public information of Yota Communication since its establishment, so that they can have a deeper understanding of the company. On the number plate of the company's office, there was an unremarkable name-blackstone. ...

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