Hollywood Hunter

Simon was chatting with Bryce Levison in a low voice, and a slightly hoarse old greeting came in his ear: "Hey, Simon."

Turning to look, it turned out to be Warren Buffett.

At the top circle of this social pyramid, Simon has not been in contact with Buffett for the first time. He has also met in some social situations before, but he is not familiar with it.

The meeting tonight was not deliberately arranged.

Simon knew that Buffett would be there and planned to have a chance encounter. In fact, both sides knew each other's purpose well, otherwise Buffett, a 65-year-old man, would not ask for an invitation to attend such a fashionable party.

In the past, Buffett agreed to sell Metropolis ABC Group to Disney in 1995 because he saw the impact of cable television and the Internet on traditional public television networks becoming more and more obvious, so he chose to cash out at a high level. Facts also basically proved the correctness of Buffett's decision.

After the new century, including FOX, the four major public television networks in the United States have basically declined all the way. In the early days of television networks, TV programs with 20 to 30 million viewers became less and less common after the millennium. It has been making money, but as a whole, it is far inferior to the increasingly prosperous cable television and the Internet, and can only become a vassal of major media groups.

Buffett’s cash-out time seems to be a little earlier, but it is in line with the investment criteria of this veteran investor not seeking to earn the last dollar. It is this prudent investment strategy that makes the original space-time Buffett clear before the subprime mortgage crisis. The two housing stocks have avoided the impact of Berkshire Hathaway.

Smiled and got up and shook hands with Buffett, and casually introduced Blyth beside him. After greeting, Simon whispered in the woman's ear. After Blyth turned away reluctantly, then he and Buffett were together sit down.

Buffett watched Bryce walk away like a mermaid, and joked with Simon: "I really envy you young people."

Simon also smiled, "Warren, you are not old at all."

Speaking of it, Buffett is actually in a state of'one house and two wives'.

This investment tycoon had separated from his original wife in the 1970s, but the two have never divorced. Over the years, they have been in various public places together as husband and wife. At the same time, Buffett has already cohabited with another partner, which is considered the reality of husband and wife.

It is rumored that the relationship between the trio is still very good. Buffett is now sending holiday cards to relatives and friends, and even the signatures are all three together. In recent years, many media have ridiculed Warren Buffett as having two wives out of various thoughts.

In fact, Buffett's one house and two wives are not worth mentioning among the rich.

When one can touch the scenery at the top of the pyramid, one must find that many things go far beyond the most daring fantasy ever.

In addition to the grandiose stingy in spending money, Buffett is no different from ordinary super-rich in other aspects, one of which is often attending various top social gatherings.

Of course, except for charity parties that require donations.

He politely complimented the party, but Buffett’s topic turned to Igreat, and he gushed about the company’s various problems to Simon. Although the billionaire is 65 years old, whether it is memory or His thinking is still very sharp and agile, and a lot of data related to Igrit seems to be printed in his mind.

Moreover, it is clear that Buffett is confused and questioned by the financial data of Eaglet’s rapid rise.

In the past history, no matter how surging the Internet wave, Buffett firmly did not involve new technology industries he was not familiar with. This even led to Buffett being thrown eggs by shareholders at the Berkshire Hathaway annual meeting, accusing him of missing it. The best investment opportunity.

Now, the old-school conservative Buffett obviously still can’t understand the Internet: "So, Amazon Online Mall is indeed the most loss-making part of the business, Simon, have you ever thought about spinning off this part of the business, or reducing investment in this area? , It can be developed more steadily, so the stock price growth potential of Yigrete after listing will definitely be greater."

Simon realized that Buffett was interested in Igreat's IPO.

This is not surprising at all.

Buffett's favorite is the company with a "moat". Now Igreat, whether it is advertising or software business, can be described as "high and deep", and no other company in the industry can compete.

However, for this investor who pays great attention to profit margins, Igreat's flaws are also obvious. The most important point is that the investment is too aggressive, which caused huge losses that he saw as unnecessary. If you reduce or get rid of these burdens, Igreat will immediately become Buffett's most ideal investment target, with high growth rate, high profit rate, and a corporate moat that is difficult for peer companies to cross.

Of course, Simon would not do this in order to cater to Buffett’s investment wishes. He shook his head and said: "Warren, e-commerce is an indispensable part of Eaglet’s business system. This business seems to be losing money, but it can greatly Increase the types of services in the Internet industry to a certain extent, thereby increasing the user’s adherence to the Internet. In short, this is a kind of market cultivation. This is the case for all businesses that Yigrete is doing now, as long as the public is aware that the Internet has With sufficient services, they will gradually consume directly or indirectly in this field."

Buffy nodded and shook his head again, saying: "However, Simon, there is no shortage of capital to develop in any business in the Internet field. I think Igreat can be more focused. You have to know that a company focuses too much on diversity. The results are often not very good."

Simon said: "Of course, I understand that Eaglet is already making relevant arrangements. I will also streamline this company at the right opportunity, but not now."

The appropriate opportunity Simon said was after the burst of the Internet bubble.

The advancement of the Westeros system in the development of new technological fields cannot stop the normal economic laws of the capital society at all. Sooner or later the bubble will burst.

When the time comes, not only will the business be streamlined, but Simon will also streamline the large team of employees that Yigrete has quickly bloated. In the pursuit of rapid expansion in recent years, Igreat has actually accumulated a variety of internal problems. Simon will drastically streamline and solve as much as possible after the burst of the Internet bubble, and realize the company's nirvana.

Buffett obviously couldn't understand Simon's mind. He thought it was an excuse from the young man in front of him, so he could only shook his head slightly and turned the subject: "Simon, I found you are planning to acquire ABC, right?"

In this matter, Simon has actually revealed many flaws.

For example, the ESPN shares acquired from the Hearst family.

For example, last year's large-scale IPO financing.

And in the past few years, several popular TV shows such as "Friends" and "Emergency Room Stories" have been specially delivered to two other TV networks. Simon's thoughts on this arrangement are similar to those of Hollywood's foreign cooperation projects, which are parasitic penetration. However, in Buffett's view, this obviously has the purpose of deliberately inhibiting the development of ABC in order to lower the offer when launching an acquisition. This is actually another part of the fact.

Since this is the case, Simon simply nodded and said: "Yes, after the ban on media integration is lifted, further integration in this field to adapt to global competition is an inevitable trend. Metropolis ABC is my top priority, of course. , Is not the only option. Warren, if you want, we can talk about the offer now."

Berkshire Hathaway holds 25% of the Metropolis ABC Group. Buffett’s voice in this company is actually greater than that of Chairman and CEO Tom Murphy. As long as he agrees, things can basically be finalized. .

Buffett did not respond immediately, but complained: "Simon, Daenerys' current stock price is too high."

Simon just smiled and shrugged.

In my mind, I recalled Disney's acquisition of Metropolis ABC, which was a mixed transaction of half equity and half cash. Obviously, this time, Buffett is also thinking the same way, except that Daenerys Entertainment’s current stock price is very high. The investment tycoon neither wants to obtain a full cash acquisition, but also worried that after a share exchange or partial exchange, Metropolis ABC Will suffer in it.

Because he has been silently paying attention, Simon knows that the current market value of Metropolis ABC Group is about 16 billion US dollars. Because the Westeros system has driven the recovery of the entire North American stock market in advance, the current market value of Metropolis ABC must exceed the original timeline. Counting the company’s debt of about US$3 billion, the overall US$19 billion has happened to be the same as the total amount of Disney’s acquisition of Metropolis ABC.

This time, Daenerys wants to acquire the company, and the assets plus liabilities must be worth more than 20 billion U.S. dollars.

Simon does not feel disadvantaged or pressured by this, because Daenerys’s market value is actually higher, currently more than 130 billion US dollars. According to Daenerys Entertainment’s financial report for the first quarter of the 1995 fiscal year released in February, The price-earnings ratio has reached 120 times that Buffett is absolutely unacceptable.

In comparison, Metropolis ABC Group's P/E ratio is only 37 times.

Seeing Simon smiled and said nothing, Buffett frowned slightly in distress, and then asked: "Simon, do you think Daenerys' stock price has room to rise?"

Simon shook his head: "Warren, who can say this kind of thing. However, I have enough confidence in Daenerys. Many people say that the company's growth has reached the ceiling. However, they only need to pay a little attention. Looking at the financial report, it is not difficult to find that Daenerys’s quarterly financial report announced in February still achieved a year-on-year growth rate of 39%. I believe this growth will continue for a long time."

Buffett frowned and thought for a moment, and seemed determined, and said: "Simon, I can sell Metropolis ABC to you, but I think my shareholders also need to get enough protection of their interests, so I hope to get a cash plus The payment method for convertible bonds is half cash and half convertible bonds based on the current stock price, with a 10-year term and an annual interest rate of 8%."

Every investor has his own specific investment style.

The transaction method of cash plus stocks or bonds is Buffett's common method in acquisition transactions. Cash can ensure security. Stocks or bonds can save a capital gains tax in the short term and maximize benefits in the future. Moreover, Buffett often asks for risk-free benefit maximization.

Simon chose to reject this without hesitation: "Warren, if you insist on this, we don't need to talk about it."

Daenerys Entertainment’s IPO last year was to prepare for this acquisition of the public television network. Taking into account the financing during the IPO and Daenerys’ subsequent profits, the current cash reserves of the entire Daenerys Entertainment Group reached an astonishing 170 One hundred million U.S. dollars. As long as the cash is not spent, it will inevitably bear the loss of inflation. The larger the cash, the more so.

Therefore, for Daenerys Entertainment, even if its stock price is very high, an all-cash acquisition is the most preferred option.

Buffett now wants both cash and a stable high-interest bond. He also requires that this part of the bond can be converted into Daenerys Entertainment's future stock at any time at the right time in the future. This is a good thing. This investor has enjoyed it many times, but it was only agreed when some companies were in trouble.

Daenerys Entertainment's situation is improving. If Simon agrees to such obvious unequal transaction terms, it would be strange not to be pointed at by other shareholders.

Having said that, Simon didn’t want this deal to be eroded. He calmed down a bit and said, “Warren, I will definitely not accept this transaction model with unequal additional clauses. You have to be responsible to your own shareholders. The same is true. So, either all cash or all stocks, or cash plus stocks, without any extra clauses, otherwise, I can only try to cooperate with two other TV networks. And, frankly, Hollywood now owns Only Daenerys Entertainment has enough strength to acquire the three major TV networks. With the development of cable TV and the Internet, the decline of public TV networks is very obvious. The later you choose to sell, or sell to other companies in the future, it is impossible. To get too high a price, if you keep holding it in your hand, unfortunately, the value of this TV network will shrink faster, just like the current paper media industry."

Buffett heard what Simon said, his expression unchanged, and said: "Simon, if you think so, why should you buy a TV network?"

Simon said: "It is difficult for a separate TV network to develop. However, it is an essential part of a large media group. It can provide marketing and sales channels for Daenerys's other businesses. I don’t think you don’t understand."

Buffett shook his head slightly, did not refute Simon's argument, but once again said, "Daenerys' stock price is too high."

The old man still wanted stocks, but he obviously couldn't accept Daenerys's super high P/E ratio of 120 times.

Simon smiled and said: "Then choose all cash, Warren, you should have heard the news. Capital gains tax will be adjusted soon. At that time, the 15% capital gains tax rate will be great for your investment in metropolis ABC. It’s nothing at all in terms of revenue."

Even if the deal is negotiated now, which involves a huge merger of US$20 billion, it will take at least three to five months to wait until the transaction is completed.

According to information received by Simon, it is no surprise that the capital gains tax reform bill will be passed in May. By then, Berkshire Hathaway, which has held shares in Metropolis ABC Group for many years, can enjoy the most favorable Capital gains tax rate.