Video Game Empire

"Boss, where are you going to make Computerworld listed? The New York Stock Exchange or the Nasdaq?" John Martin asked. ∷∷ǎn∷小∷ said,

"Let's determine the underwriter first, and then communicate with the two exchanges through the underwriter. Whichever offers more relaxed conditions will go public!" Li Xuan replied.

Generally speaking, the Nasdaq exchange has more lenient data requirements on the capital and finance of listed companies, so many high-tech companies will choose to list on Nasdaq.

John Martin also found that his question was somewhat amateur, and shrugged awkwardly. Although he was trusted by the founder William Millard at the beginning of the establishment of Computer Garden Company, he became the second person of the company. But he didn't come from a professional manager background. He just got an associate's degree from a community college, not a business school from a prestigious university, so it's inevitable that he's unprofessional in some aspects.

In the past two years, with the rapid expansion of the computer park company, the company's top management has also undergone a major change of blood, and many people whose management ability cannot keep up with the company's development pace have been eliminated. Li Xuan has hired a number of senior professional managers to serve as (Chief Operating Officer), O (Chief Financial Officer) and other positions to strive to improve the company's overall operational level.

But for John Martin, Li Xuan still gave full trust. Martin's greatest advantage is that he can implement Li Xuan's various decisions without reservation. If it was replaced by someone with better abilities, he might have many ideas of his own, but Li Xuan might not be obedient to Martin when he used it.

And under the helm of John Martin, Computer Park has developed well in the past two years. When Li Xuan communicated with him before, he also found that Martin was not without ideas. Also have their own enterprising spirit. He proposed to transform from a monopoly computer to a diversified one, and become a chain hypermarket with a complete range of electronic appliances. This solution may not be the next development path for the computer garden company!

"For Fairchild's M&A project, I think Goldman Sachs and Morgan Stanley are more suitable. After all, both of their investment banks participated in the first resale of Fairchild three years ago. But let's put the news out first, presumably two The combination of projects can generate enough attraction, see the reactions of all investment banks before making a final decision!" Li Xuan thought for a while and said, "Okay, that's all for today's meeting, and the rest will be left to you. !"

Don't think that investment banks on Wall Street are pure white rabbits who will consider their clients wholeheartedly. In fact, they are the most ferocious vampires in the world. If you don't open your eyes, you may be sold for money. These sanctimonious financial elites. Defrauding customers has been done all the time.

Especially this kind of large-scale financing operation, on the surface, the investment bank makes money based on the underwriting rate signed with the listed company. For example, if the rate is 10%, then the listed company raises 1 billion yuan, and the actual payment is only 900 million yuan, and the remaining 100 million yuan is directly deducted in advance as the investment bank's stock issuance fee.

In this way, the higher the financing amount of the listed company, the higher the income of the investment banks. They should be of one mind with the listed company, but the actual situation is far from that simple. Public companies naturally hope that the higher the stock price, the better. This is directly related to how much the company actually raises. But the investment bank is just an underwriter. After it has obtained the stock from the listed company, it will eventually sell it to someone else.

For investors, the higher the stock price, the greater the risk. If the issue price breaks through the bottom line of investors' psychological tolerance. After the investment bank obtains the stock from the listed company, it is likely to have a backlog in its hand and cannot sell it. In this case, the investment bank can only bear the losses and issue at a discount. certainly. Like a certain country in later generations, "playing new" has become a lottery game that will never lose money. This is also the only wonderful thing in the securities markets around the world.

From this perspective, investment banks and listed companies are naturally antagonistic. The two sides will have a fierce game on the issue and pricing of shares. In another time and space, when the Internet bubble in the United States was at its craziest in the late 1990s, countless Internet companies that only burned money without any profit support went public and made money under the operation of Wall Street.

At that time, the entire Internet industry was already in a frenzy, and as long as there was enough Internet browsing traffic, it represented a bright future. However, these companies with free traffic have not achieved profitability after all, so investors are reluctant to accept excessively high issue prices in order to reduce their own risks.

At that time, many investment banks cooperated with their own investment clients to frantically squeeze the issue prices of various Internet companies, taking advantage of the entire market's pursuit of the concept of networking, making a lot of money. In this case, Internet companies, although they are also clients of Wall Street investment banks, are still betrayed.

Of course, all of this stems from interests. The underwriting rate of investment banks is generally between 5% and 10%. Generally speaking, when star stocks with large financing scale and high popularity are listed, they can get the best fees from investment banks. Rate. And those companies that are more risky, the underwriting fee may even reach 15%.

In the dot-com bubble, investment banks sold their clients—many Internet companies—because their profits from other sources far outweighed their losses on stock underwriting fees. The IPO of a listed company is not directly sold to the market, but to an investment bank at an agreed issue price, and then the investment bank distributes it to its own investment clients at a par, and these investment clients sell it to the market on the day of listing.

Therefore, if investors can cooperate with investment banks, first lower the issue price and then sell at a high price when the market is hot on the Internet concept, they can make a huge difference in it. And investment banks, through private profit sharing with these investment clients, get more revenue than issuance fees.

Of course, investment banks will not directly ask these investment clients for profit rebates, but through some more secretive methods. For example, investment clients must invest part of their profits into an investment fund designated by the investment bank. And this fund often charges huge management fees, and investment banks use this method to unknowingly capture their own part of the profits, and others can't find any reason.

Of course, this practice is unethical, but when the profit is large enough, morality can be trampled on. Last year, when Ikon was listed in the UK, the underwriting rate was not high, only 6.25%, but Ikon's two underwriters, Barclays Bank and Credit Suisse First, set Ikang's stock issue price at a low level. of.

The company was established for too short a time, and the management changed frequently. A series of excuses given by the two investment banks forced Ikon to set the issue price of the stock at 6 pounds. But during the global roadshow, investors from all over the world were wildly chasing Ikon's stock. So relying on the many times oversubscription data, Ikon finally succeeded in forcing the two investment banks to make concessions at the last minute, raising the issue price from £6 to £8.

When Ikon went public, Orient Electronics was far from its current popularity. Although Aikang's sales data are very good-looking, the reasons given by the two underwriters do exist objectively, so Li Xuan pinched his nose to recognize it.

Because Li Xuan has suffered certain losses, but the listing of Aikang has brought him even greater benefits. Just after the listing of Aikang, Fleet Street's hype on Li Xuan's personal wealth news made the entire Oriental Group show its face in front of global readers, and the advertising value brought by it is incalculable.

After owning a listed company, the popularity of Dongfang Electronics Group has really begun to move from Hong Kong to Europe and the United States. With the popularity of Aikang computers all over the world, the name of Dongfang Electronics has also appeared frequently in the financial sections of mainstream newspapers in Europe and the United States.

But this time Computer Garden Company went public in the United States, and Li Xuan was obviously unwilling to suffer from this kind of hidden loss again. He deliberately let out the wind, in order to let himself reap the benefits of the fisherman through the competition between multiple investment banks. And in order to increase the attractiveness, so that these investment banks will not compromise in private, he is ready to throw out a merger.

Even Li Xuan himself felt that Morgan Stanley and Goldman Sachs, which participated in the first sale of Fairchild three years ago, were naturally the preferred choices of consultants for Dongfang Electronics' acquisition of Fairchild. In this way, other investment banks such as Merrill Lynch, Salomon Brothers, etc. ~www.readwn.com~ want to get a piece of the pie from Li Xuan, they must strive for the listing project of Computer Garden Company.

It is impossible for Li Xuan to pay twice for the acquisition of Fairchild Semiconductor. Only one of Morgan Stanley and Goldman Sachs will eventually become a strategic advisor for the merger. These two investment banks will definitely not withdraw from the competition of listing and underwriting directly without being able to ensure that they can definitely get the M&A projects in their pockets.

While Merrill Lynch has little hope of M&A projects, it is bound to strive for dominance in listing projects. In this way, several companies privately coordinate their interests with each other, making it much more difficult to form a united front. Li Xuan can sit firmly in Diaoyutai and obtain the most favorable conditions from the competition of these investment banks.

Computer Garden Company has been expanding rapidly since it was acquired by Li Xuan, and it has never made a profit on the books. It has been relying on constant capital injection from shareholders to support its development. But a fool can also see that under the premise that the US personal computer market is about to explode, the computer garden company has an extremely broad prospect, so Li Xuan must make it obtain a high valuation.

Li Xuan finished the meeting and arranged all the tasks, so he started to throw his hands as a shopkeeper. He might have been personally involved before, but now he prefers to enjoy life. These laborious things are left to others to complete, and he only needs to know the result. (To be continued..)