Start with hooves

Chapter 69 One plus one is greater than two

A company with a market capitalization of more than one billion US dollars like Netflix has a mature internal management system.

It's not that no one has considered it before. To separate the CD rental business from the Internet TV project, it is nothing more than the difficulty of actual operation, so it is temporarily abandoned.

on the one hand.

The Internet TV project needs to consume a lot of money, and there is no hope of achieving a balance of payments in the early stage. It can only rely on Netflix's traditional business to make money to support it.

on the other hand.

If the two projects are split and operated separately, Netflix's traditional leasing business will lose the gimmick that can be sold externally, and the company's stock price will inevitably plummet.

So Mr. Reed Hastings shook his head immediately after listening to Suri's words:

"Other shareholders will not allow me to do this. Because of the streaming business, Netflix's stock price will rise. If the stock price is at risk of falling by 10%, or even 20%, those investors will go crazy."

Su Rui asked someone to investigate Netflix's information, and also carefully studied the company's data, and immediately said:
"Just let it exist in the form of a subsidiary, and investors still indirectly hold shares and enjoy its development dividends, don't they?" If we cooperate with each other, I can provide [-] million U.S. dollars, or even more funds, so that It develops like a real internet business. "

"This is not only conducive to future financing, but also can bring new profit growth points through the membership subscription business, so as to prevent customers from using it for free like now, consuming the income from your DVD rental business in vain, and splitting them up. On the contrary, it protects the interests of investors and stimulates the stock price to rise..."

Greg Peters, Netflix's chief operating officer, listened carefully to Suri.

After pondering for a moment, the interface asked:
"I want to ask first, what is the valuation of our company's Internet TV business in your eyes?"

Although doing business requires careful consideration, Su Rui does not want to lose more long-term benefits for the sake of small profits.

So he reported a fairly good number and replied:

"This needs to be further understood before it can be finalized. I think it is valued at around 5000 million U.S. dollars. There should be no higher quotation in the market. Your network TV business is definitely not worth so much money. I I am optimistic about other resources on the Netflix platform..."

Netflix just launched its network TV business last year.

A total of more than 4000 million US dollars has been invested in this project one after another. There are only some old resources in it, and the number of users is not high.

Hearing that Su Rui reported a valuation of 5000 million US dollars, both Reed Hastings and Greg Peters were obviously quite surprised.

In all fairness.

Although they are optimistic about the prospects of the Internet TV project, as far as it is concerned, it is really not worth so much.

Even if Netflix has millions of active subscribers, members who are willing to pay for disc rentals have nothing to do with the network TV business.

Whether it can successfully divert traffic and attract users to use streaming media services is another matter.

Therefore, Netflix’s board of directors has actually always had some disagreements on whether it should increase investment.

The main reason is to develop it, which is too expensive.

However, any Hollywood film and television company with a little bit of strength is unwilling to release the network broadcasting authorization to the outside world.

They would rather spend a little more money to build their own video playback website, or continue to rely on CD rentals to enjoy the benefits brought by the film and television library, and do not want to sell the online playback rights of stock film sources.

Therefore, Netflix spent about 3000 million US dollars back and forth, and only bought a bunch of ordinary film and television resources.

Among them, the only "Friends" that looks decent is not a direct buyout. It has to pay NBC and Time Warner according to the number of broadcasts every year, which is tantamount to losing money and making money.

Hollywood has a strong hostility towards online video companies like them.

Reed Hastings, the founder of Netflix, only holds about 8% of the shares in the company.

Thanks to the Nasdaq Stock Exchange, which allows the policy of different rights for the same share, that is, the so-called AB shares, it is possible to use the right to speak of one share worth ten shares to firmly grasp the final decision-making of this company.

When he finished listening to Su Rui's words, his attitude was not as firm as before, and he seemed to see the big benefactor, so he asked wonderingly:

"Why? Are you sure that you will develop it after the split? If we cooperate and you provide 5000 million US dollars, can we really occupy the corresponding shares at a valuation of [-] million US dollars?"

"Of course, I can even try not to intervene in specific management work, but what kind of TV series to produce needs to be decided by me."

The other party felt that Su Rui was spreading money.

Su Rui also knew that from the current point of view, he was at a disadvantage.

The main reason is that if the price is less, the other party may not be willing to take the risk of stock price fluctuations to split the Internet TV project.

The reason for the high price is to make a final decision and persuade Reed Hastings, the talker, as soon as possible.

Compared with other people's hesitation, at least Su Rui doesn't need to think about the possible failure of the project, and the risk is minimal in his opinion.

He snapped his fingers, indicating that the waiter could come and order.

Suri added again:
"If the business is split off, you will continue to hold the majority of shares at that time, and it will still be regarded as a subsidiary of Netflix, which will help the parent company's stock price rise. I can take out 5000 million US dollars in financing, but I only ask for 49% of the shares, and part of the right to speak in the new company, to prove our sincerity. As long as we cooperate smoothly, as people often say, maybe one plus one is greater than two, isn’t it?”

The two parties invested in different ways. This does not mean the valuation at that time, it must be [-] million US dollars.

If the transaction is completed.

The new company has not only the gimmick of external hype, but also Su Rui’s real capital of 5000 million US dollars, coupled with the help that Netflix can provide, perhaps the market valuation can skyrocket to [-] to [-] million US dollars.

Even if nothing is done, there is an opportunity to increase paper wealth.

The reason why countless capitals are obsessed with Silicon Valley is that compared with traditional enterprises, this place is full of opportunities to get rich.

Greg Peters, chief operating officer of Netflix, has been in Silicon Valley for more than ten years, and of course knows the charm.

He was worried that the boss was being stupid, so he couldn't help reminding:

"I thought about it, and I really couldn't find a reason for the rejection. Maybe some details need to be discussed, but it is worth serious consideration..."

Reed Hastings cut him off with a hand, and asked Suri again, "You're only going to run the production department? That's going to cost a lot of money, right? How can I trust you to do it?"

Suri spread her hands and said with a smile:
"I won't make fun of my money. Let me try to make two dramas first. If it doesn't work, I don't need you to drive me away. I will pack up and leave."

Just then the waiter came.

Reed Hastings smiled and replied: "I need to discuss with the board of directors. If no one makes a higher offer, I think there should be a possibility of cooperation."

Su Rui was basically sure that no one would be willing to offer a higher price than himself, and he was not worried that someone would cut him off halfway.

Not really.

He went to the Youtube video site with a similar offer, and maybe he could reach a similar partnership with a lower price.

Netflix was his best choice, not his only choice, so there was no pressure.

Miss Daddario sat next to Suri.

She finally realized that it wasn't that she was too bad, but that Su Rui's circle was too high-end. It was less than 5 minutes before she was seated, and it seemed that she had reached a tacit understanding. This was a business worth hundreds of millions of dollars.

Finally, I understood what Su Rui's so-called acquisition was.

Although it was different from what he had imagined, Daddario was shocked and keenly aware that there seemed to be some new opportunities for fame outside of Hollywood...

(End of this chapter)