Open business day-to-day

Chapter 404 Drinking Tea
A few days later, Lin Rui hadn't gone to Hangzhou yet, but Lao Ma came to Los Angeles in a low-key manner.

Luojing Club, an antique tea room, Lin Rui and Lao Ma sat opposite each other.Not far away, a woman in classical attire was playing the piano, and another woman in classical attire made a pot of tea for the two of them, then stepped back slowly.

Listening to the mellow sound of the piano, Lin Rui smiled and said: "I was thinking about when I would go to Hangzhou to meet you for tea, and you have come to Los Angeles, Mr. Ma."

"Alright, give me a chance to be the host."

Lao Ma laughed and said, "Brother Lin, you never go to Hangzhou. I can only make a trip."

"This time, I think we need to sit down and have a good chat about our two companies. I have some things to say."

Lin Rui smiled and said, "Mr. Ma, please tell me, I will listen all the time!"

The old horse waved his hand and said, "You're welcome, let's be more casual, and you don't want Mr. Ma... Mr. Ma, just call me Old Ma."

Lin Rui smiled and said: "Well, since you are a straightforward person, old horse, I won't be hypocritical anymore!"

"Can you tell me anything?"

Lao Ma said: "I agree in principle to Xingkong Technology Group's stake in Ali."

"However, you also know that although I am the founder of Ali and I am in charge of the company, the major shareholders are Softbank and Yahoo."

"If it's the company's specific business, I can definitely make a decision, but for matters involving equity, I don't have that much say. Everything needs to be approved by Softbank and Yahoo."

Lin Rui nodded to express his understanding.

The old horse met, and then said: "You also know that Yahoo holds 40% of Ali; In the hands of investment funds; these together account for 28.5% of Ali’s shares.”

"As for myself, I only hold less than 9% of Ali's shares. The company's option pool, management shares, plus the shares held by the founder team including me, add up to only 25%. We rely on Only with 25% of the shares and the establishment of a partnership system can we control Ari."

"Why did Ali delist in the Hong Kong stock market and perform poorly? It is just one of the reasons why Ali wants to package and reorganize all businesses and go public on the US stock market."

"The main reason is that the Hong Kong stock market does not currently support different rights for the same share. Like the A-shares in the mainland, whoever holds more shares has a greater say in the company."

"In this regard, it is very unfavorable for us to control Ali. Although the partnership system has been implemented, it is not safe. Yahoo and Softbank hold a total of 68.5% of Alibaba's shares. As long as they reach an agreement, things will be very bad."

"Unlike Hong Kong stocks and A-shares, U.S. stocks support different rights for the same share. Under this system, we will have more control over Ari."

"This is also an important reason why we delisted from the Hong Kong stock market and went to the US stock market."

"However, all of this still requires the consent of Yahoo and Softbank. But it is difficult for them to weaken their right to speak!"

"Xingkong Technology's shareholding in Ali dilutes their shares and weakens their influence and voice from the root. I support it."

"However, Yahoo and Softbank are not easy to talk to, and they won't just dilute their shares obediently!"

Lin Ruidao: "That's the reason. No company will be too willing to have its shares diluted."

"However, we did not buy shares for nothing. We already hold 18.1% of the shares of Hong Kong stock Alibaba. This is what you must admit. We will spend a large amount of funds to make up the difference in the future, and you will not suffer losses."

"Of course, I will inevitably help you a lot, old horse."

The old horse said: "Of course it's okay to help. In fact, even if you don't intervene, brother, we are already working on solving the problem of Yahoo's equity."

"Speaking of which, I was also dizzy back then. I was stunned by Yahoo's 10 billion US dollars. I directly sold 40% of Ali's shares to them, which laid the root of the current conflict."

"Thinking about it now, the 40% of the shares should be divided into several rounds of financing, and different financial institutions should be introduced into the market, so as not to allow any shareholder to become bigger, so as to ensure our right to speak."

"Brother, if you start your own business, you must be especially careful about equity issues. It is better to raise more rounds and introduce more investment institutions to enter the market. You can't sell too many shares at once, let which investment institution become bigger, and affect your right to speak. "

"I just suffered from this loss. Now that I understand, I can only remedy it slowly."

Lin Rui nodded. What Lao Ma said was indeed reasonable and had some reference value.

But the two companies are fundamentally different. Weiyang Technology was developed step by step by Lin Rui, and all the money was invested by him himself.

So far, there is no outside shareholder, and he holds all the shares himself.

Based on the current situation, even if it needs to raise funds in the future, how many shares can be used up? To reduce his shareholding in Weiyang Technology to less than 50%, a huge amount of funds will be needed.

What's more, Lin Rui is not short of money, so why raise so much money, even if he wants to introduce some cornerstone investors for the future listing plan, it will be ok to take out some shares.

Even if all these shares are concentrated in the hands of one company, they are at most a minority shareholder.Not to mention the impact on Lin Rui's right to speak, if he doesn't want to, don't even think about having a seat on the board of directors.

In comparison, when Ali was founded, Lao Ma's own capital was very small, so how could he have so much money to invest.

There is only continuous financing, the more diluted the shares, the less it is, and it is difficult for external shareholders to gradually grow bigger, and it is difficult not to have an influence on the company.

This is the fundamental difference between the two companies.

Lin Rui holds a wholly-owned stake in the company, and the company is his voice, and no one can challenge his right to speak; Lao Ma has completed the control of the company with a very small number of shares by virtue of the partnership system. It seems good, but he is also walking a tightrope. There is a need to balance the interests of all parties.

A little unsatisfactory, the company's power will be left behind.

Therefore, he needs to divide and disintegrate, introduce new major shareholders, check and balance Yahoo and Softbank, and ensure the right to speak of the management team.

After the two finished the topic, Ma Yun said again: "Brother Lin, to tell you the truth, your timing is really just right this time. Even if you don't intervene, in fact, we have already started to liquidate the shares held by Yahoo."

Lin Rui said "Oh". He heard some rumors about this, but he didn't know whether it was true or not.

"I've heard some rumors outside that you are going to buy back the shares in Yahoo. Is it true?"

Lao Ma nodded: "This matter has been going on for a long time, but recently with Ali's delisting from the Hong Kong stock market, the negotiations have only begun to become clear, and there are some eyebrows."

Lin Rui asked curiously: "Which step is it now? How do you reclaim Ali's shares?"

Lao Ma said: "According to the preliminary agreement, this time we will take out 71 billion US dollars to take back 23% of Ali's shares from Yahoo."

Lin Rui said in surprise: "71% of the shares will be recovered for US$23 billion. Based on this price, the value of the restructured Alibaba Group will exceed US$300 billion."

Lao Ma smiled and said, "Brother Lin, do you think the reorganized Ali Group is not worth 300 billion US dollars?"

Lin Rui nodded, then shook his head again.

"According to the current trend, the restructured Ali Group may be worth the price; but if Yahoo can agree to this offer, you must make concessions and make a premium on the actual value."

"Then, obviously, you guys aren't worth the price in Yahoo's eyes."

"Whether you are worth the price, I can't say!"

The old horse didn't care when he heard the words, but was very confident.

"Yahoo is not optimistic about our management team, or even Alibaba itself. That's normal. Since we broke up the year before last, Yahoo has been picking on us, and even criticizing the company's development direction and performance."

"It's normal that they are not optimistic about Ali's future and have too low expectations for the future, which will affect their own evaluation of Ali."

"But I, Ali's entire management team, have full confidence in Ali's future."

"300 billion US dollars is just the beginning, and it can't reflect the value of Ali. After the company completes the restructuring plan and immerses itself in development for two years, it will go public on the US stock market."

"At that time, it will be the time when Ali really shines, and Yahoo will regret it in the end."

Speaking of this, he stared at Lin Rui with a smile and said, "Brother Lin, you bought so many of our stocks, and now you want to invest in the entire group. Aren't you also optimistic about the future of our Alibaba."

Lin Rui nodded and smiled, "Yes! I'm really optimistic about Ali's development, otherwise I wouldn't invest in it."

"Actually, not only Ali, but also the entire e-commerce industry, and even the entire Internet industry, I am very optimistic."

"In the past two years, how many investments our company has made in Internet start-up companies, Ma, you have probably heard of it, and the target is not just Ali."

The old horse nodded, this is true.

In the past two years, Weiyang Technology has definitely been regarded as an alternative in the Internet circle. Not only is it a start-up company, but it also invests in start-up companies all over the world.

Regardless of any type of start-up company, as long as they have development prospects, they will plug in.

Under this premise, it is normal to feel that Ali is good and want to invest.

However, Lin Rui's reaction made him suddenly feel that Ali's equity may not be that important in the other party's heart, and there is less room to handle the other party.

After deliberating for a while, Ma Yun said again: "Brother Lin, do you know where the real obstacles for Xingkong Technology Group to invest in Ali are?"

Lin Rui smiled and said, "I have to trouble Lao Ma to talk about this point!"

Lao Ma picked up the tea in front of him, took a sip, and said, "According to our original plan, it is a win-win decision for all parties to repurchase Yahoo's 71% stake in Ali with US$23 billion. .”

Lin Rui said: "How do you say that? Are we still redundant?"

The old horse said: "Think about it, we took back 23% of Ali shares held by Yahoo, what will we do?"

Before Lin Rui could answer, Lao Ma went on to say: "We will cancel these shares, and 23% of Ali's shares will be canceled. What does this mean? You should know."

Of course Lin Rui understood!
"This means that all individuals and institutions holding shares in Ali will increase their holdings by 23% out of thin air."

Lao Ma nodded and said: "Softbank originally held 28.5% of our shares. If 23% of the company's shares are cancelled, 23 points of shares will be distributed equally to each shareholder, which is equivalent to an increase of 6.5% in Softbank. It will make their shareholding as high as 35%, replacing Yahoo and establishing Ali’s largest shareholder.”

"Will Softbank support you if you say this operation?"

Lin Rui nodded, and changed from the second largest shareholder to the largest shareholder, increasing 6.5% of the shares for nothing, of course he is willing.

Lao Ma went on to say: "Let's talk about Yahoo, they themselves have encountered a crisis. The stock price has fallen again and again, and they urgently need funds to replenish their blood."

"Plus, they have been pessimistic about our development for the past two years. Is it in line with their wishes to take the opportunity to sell a share, cash out a large amount of money, and maintain Yahoo's development?"

"Also, regardless of the sale of 23% of the shares, their shareholding in Ali is only 17%, but after these 23 points of equity are cancelled, based on the 17% shareholding, their shares will also increase by four. point, reaching 21%, is also a beneficiary of share repurchases."

"Do you think they are willing?"

Lin Rui thought for a while, and it was true that Yahoo was quite happy for Ali to repurchase these shares.

Lao Ma went on to say: "The other small investment institutions have very clear minds, who don't want to increase their own shares."

"Our founder team is also happy to see the success of this matter. If these shares are canceled, our shares will also increase."

"Just like me, now my shareholding in Ali is less than 9%. If the recovered 23% of the shares are cancelled, my shareholding in Ali will even exceed 10%. Do you think I am willing or not."

When Lin Rui thought about it this way, it was really the case. Buying back the shares in Yahoo's hands and canceling them would be beneficial to all parties.

But on closer inspection, it's not without its flaws.

Lin Rui said again: "Although Ali has strength, it will cost 23 billion US dollars to buy back 71% of Ahri's shares in Yahoo's hands. Can you get it out?"

The old horse was choked, and then he began to explain: "It is really difficult for us to spend 71 billion US dollars..."

Lin Rui complained secretly in his heart that it was not just difficult, it was not at all.

I only heard the old horse continue to say: "However, we originally had other plans. These repurchased shares will not be completely cancelled."

"Use part of it to attract some domestic capital, especially state-owned capital, to diversify the equity and attract more people to get on the car."

"With this capital at the bottom, the remaining money can be easily settled through the bank. In the future, as long as we can be listed on the US stock market, the money is nothing and can be easily repaid."

Lin Ruidao: "So, I interrupted your plan by interfering with it."

The old horse smiled bitterly and said, "I really didn't expect that you would intervene suddenly, brother."

"At first, I was quite hesitant. With your 18.1% shares added, even if the 23-point shares are canceled, everyone's shareholding will not increase much."

(End of this chapter)