The Millennium Semiconductor Survival Guide.

Chapter 306 X.com was not the only one who was fooled
Doesn't anyone in the industry know about Madoff's scam?Obviously not. Even among his investors, many people are aware that Madoff's financial products have abnormal returns.

Why do people still buy it?Because Madoff has been maintaining this scam for more than ten years, he can realize that abnormal customers realize that something is wrong, and will continue to buy in pursuit of stable and high returns.

They believe that no problems will arise during their purchase period and that they can escape disaster.

Madoff maintained his credibility throughout the Nasdaq bubble burst, which made his clients trust him even more.

Customers who are proficient in the financial industry believe that Madoff, as the former chairman of Nasdaq, has inside information and successfully escaped from the top before the crisis and even made a backhand short sale to obtain excess returns.

This allowed Madoff's investment company to not only not shrink in size after the Nasdaq bubble burst, but to grow a lot.

Schulman also holds a similar idea. In his opinion, with an interest rate above 12%, maybe Madoff can really achieve an average annual return of more than 12%, and maybe even an investment guru at the same level as Buffett can do it. .

It’s just that in years when the income was less than 12%, the income from previous years was used to make up for customer losses.

Schulman thought that even if it was a Ponzi scheme rumored by rumors, with Madoff's connections and resume, it would not be difficult at all to achieve a return rate of about 7%.

Therefore, even if it is a Ponzi scheme, judging from the amount of funds, this scam can last for a long time.

But what Schulman didn't expect was that after Madoff got the money, he only knew that it was deposited in the bank and did not do any operations. The hole would be penetrated much faster than he imagined.

Things like in-depth cooperation between the Internet and the financial industry are very popular on Wall Street and Silicon Valley. For Wall Street financial institutions, this can save labor costs to a great extent.

We made a mistake in how we played before. The combination of finance and the Internet is correct, but we did not gain traffic and the trust of users in the past. Financial institutions, one by one, began to build mobile apps.

Anyone with a discerning eye can see that the mobile APP is the key to Yu’e Bao’s popularity. If you switch to NewPay on a computer, Yu’e Bao can still be sold, but it will never be as popular as it is now. The first reaction of everyone who has spare money is to put it in their balance Go to Baoli.

For the Internet giants, this is a new opportunity. Everyone knows how high financial profits are. Money comes from finance much faster than money from entities. Otherwise, why would finance be at the top of the industry and swallow up money from other walks of life? Karmic flesh and blood?
Now tell them that as an upstart in the Internet, you are also qualified to make money from the old money’s territory, and you are even more efficient than the old money. Can these Internet companies in Silicon Valley not be tempted?

Therefore, the news that X.com and Madoff Investment Company had reached a cooperation spread quickly.

"Robin, X.com and Madoff Securities Investment Company have reached a cooperation. According to my sources, they will sell financial products from Madoff on X.com." George Reyes said.

Jorge Reyes is Baidu's chief financial officer. He worked at Sun PC Co., Ltd. before joining Baidu.

His connection with Madoff is that when Madoff Investment Company started in the 60s, it was a specialized market maker. Stocks with a share price of less than 1 cent were called microcap stocks. They were not listed on any major stock exchanges. went public, and if you wanted to buy these stocks, you had to find a specialized company. Madoff Investment Company was such a company at the time.

Sun PC was a micro-cap stock at the time, and while working at Sun, George Reyes frequently dealt with investors who purchased Sun PC stock through Madoff.

Sun PC's stock price rose from 1 cent to $250 during the dot-com bubble, a legend among microcap stocks.

As the most classic publicity case in the early days of Madoff Securities Investment Company, George Reyes and Madoff got to know each other. The private relationship between the two parties can be described as good.There was no need for George to introduce Madoff to Robin. Robin had also worked on Wall Street, so he naturally knew this legend.

"Is it possible for us to cooperate with Madoff? Launch Madoff's financial products on Baidu Pay?" Robin interrupted George's introduction to Madoff and asked directly.

He also realized that this was an opportunity. When X.com began to sell financial products with interest rates of over 10%, Yu'e Bao's customers were sucked away, but more of them were companies that originally had a smaller market share.

After all the major Internet companies got rid of electronic payment, Baidu also got rid of electronic payment. After spending 5000 million US dollars to acquire an electronic payment company, it changed the name of the electronic payment to Baidu Pay.

Baidu's strong technical capabilities allow them to quickly develop electronic payment applications that are available on all platforms.

But users will not choose to adopt your electronic payment application just because your technology is powerful.

Electronic payment is the most critical part of the mobile Internet. Baidu does not want to give up this battlefield no matter what, especially after the Internet and finance can be connected through electronic payment software. Robin wants to give up, but shareholders will not agree.

The helpless thing is that Baidu spent a lot of money, whether it was marketing, activities, or executives personally bringing the goods, but the results were mediocre response and extremely low conversion rate.

Robin even thought about letting Baidu Pay enter China first and mature the product there, but they couldn't get a payment license in China.

George said: “It’s a little difficult because the Madoff Fund has always been known for its high barriers to entry. Now that they have a partner, it’s difficult to convince them to accept a second partner.

But I can try my best. "

Robin nodded: "Go ahead and try it.

We are under great pressure in the electronic payment field. Not to mention NewPay, even X.com has a much higher market share than us.

You said, if Madoff does not agree to cooperate with us, is it possible for us to acquire X.com? "Robin changed the topic.

George subconsciously felt that it would not work: "X.com is too expensive. It would have cost more than 200 billion US dollars to acquire them, not to mention that all electronic payment-related companies are now extremely overvalued. Now the price to acquire them will be doubled. , which is US$400 billion.

We don't have so much cash to make acquisitions now, unless we issue additional shares, but Baidu's current disadvantage in the mobile Internet has caused our valuation to be undervalued in the market.

If we issue additional shares now, the stock price may be lowered again, which is not a good thing for the company's financial health.

I think we should try to negotiate with Madoff first and see if we can cooperate directly with Madoff. In this way, we will not only not lose money, but also make a lot of money. "

(End of this chapter)