My Age of Investment

  Chapter 299 Capital Operation

  Xia Jingxing laughed because he remembered it.

  8848, China’s earliest e-commerce company, is also known as the originator of China’s e-commerce.

   was established in May 1998, earlier than eBay and earlier than Ari.

  But because of the short-sightedness of capital, too much ambition, too weak voice of the founder, and catching up with the Internet bubble, the company fell silent in 2001.

  However, it has been brilliant for two or three years. Long before Ari, it had reached a cooperation with China Merchants Bank in 1999 to provide online payment, as well as online purchase of movie tickets and other innovative services.

   Its founder, Wang Juntao, is even more famous. Under the pen name Lao Rong, he has written the famous feeling of watching football "Dalian Jinzhou has no tears."

  As the CEO of this company, Tan Zhi was once also a prominent figure in the domestic Internet at the turn of the new and old centuries.

  But because of the decline of 8848, Tan Zhi was also driven out of the company by capital.

Together with former Sina President and CEO Wang Zhidong, Yinghaiwei founder Zhang Shuxin, Colihua chairman Song Chaodi, etc., this person was named by the media as "Chinese Internet Development in the Past Decade-Top Ten Outstanding People" List.

  This is not a good list, it's all frustrated people who slip from the peak to the bottom of the valley.

At this time, Tan Zhi is over half a hundred years old, with silver hair and white sideburns. From the vice president of UTStarcom, to the vice general manager of Microsoft China, to the CEO of 8848, his career has been ups and downs. Everyone thinks that he has no chance to make a comeback. NS.

  But Xia Jingxing knew that this man eventually climbed out of the quagmire, first became the CEO of Focus Media, and later joined Deng Feng’s Northern Lights Investment as a partner.

  How to enter Focus Media?

  The answer falls on the current company, Frame Media.

  Xia Jingxing now thoroughly recalls that Focus Media finally acquired Frame Media and made it a subsidiary responsible for the frame advertising business.

   did not die halfway through entrepreneurship, but was merged by a listed company.

  From the perspective of entrepreneurship, it's not a big success, but it's a trivial one.

   has a certain investment value.

  Xia Jingxing retracted his thoughts and asked with a smile: "Mr. Tan, I want to know where the frame media has been developed, and the next business plan."

  Chen Hong coughed, took a pen and paper, and handed it to Xia Jingxing, and said with a smile: "This is a confidentiality agreement. It is a routine matter. You have to sign it for Jingxing."

  Xia Jingxing nodded, accepted the agreement, and after reading it carefully, signed the name.

  Tan Zhi hit his waist straight, looked at Xia Jingxing, smiled and said, “Okay, let’s start, I’ll start with the LCD screen advertisement.

  In this market, Focus Media and Juzhong Media have formed a huge competitive advantage.

  They have completed multiple rounds of financing, holding a lot of money, and the contracts signed with many buildings are long-term, and they enjoy the exclusive right to renew...

  So, in this market, we basically have no chance.

  Last month, we sold the LCD advertising business to Focus Media for 17 million yuan, completely giving up this market.

  While getting rid of the burden, it also recovered considerable cash flow.

  Next, we plan to concentrate all our energy and resources on the frame advertising market.

  This is a market where vassals are fighting, we can avoid focusing and gathering crowds to fight a differentiated war.

  My idea is to integrate companies in the same industry, increase our market share in frame advertising, and expand the size of the company.

  As long as we hold onto a segment of the building advertising market, we can compete with Focus and Gathering to seek listing;

  Retire can merge with one of them and get an ideal valuation.

  Because their two companies are currently competing fiercely, the battle is in a stalemate.

  Whoever eats the frame media, the balance of victory may tilt towards whom. "

  Xia Jingxing nodded, he probably understood Tan Zhi's thinking.

   placed abroad, this is a standard case of capital operation.

  Pack a bunch of small companies into one big company, and then sell them for a high price.

  Sounds easy, but the actual operation will have many problems.

  Acquisition negotiations, post-negotiation integration, finding buyers, etc., every step must be stepped on accurately, otherwise it will fall into your hands.

  Chen Hong smiled and said, "Jingxing, what do you think? Does this character meet the four characteristics I mentioned?"

  Xia Jingxing nodded, "It's quite consistent. The investment is large, the return is large, and the return is fast. Of course, the risk is also very high."

   "It's actually okay."

  Chen Hongyi glanced at Tan Zhi, “Didn’t he just say? You can go public, and you can be merged. The risk will not be particularly high.”

   Tan Zhi nodded in agreement, "Yes, the overall situation is relatively controllable.

  In the three months I have been stationed in Frame Media, I have been busy reorganizing the company, and I have achieved initial results.

  There is no problem within the company, the next step is to wait for the growth process.

  These can be adjusted to the full, and I will not have any exaggerated publicity. "

  Xia Jingxing heard what the two said and knew that the other party was paving the way for the valuation quotation.

He couldn't remember exactly how much money Frame Media sold. It was about 180 million US dollars, which was equivalent to 1.5 billion yuan at that time.

  Because the cash + equity payment is adopted, and there is a year's performance for gambling.

  By the time the delivery took place a year later, Focus Media’s share price more than doubled, and the transaction consideration became RMB 3 billion.

  Tan Zhi, who became famous in the first battle, acquired and integrated nine companies in the same industry in nine months, which was as fast as he did, and at the same time created the fastest rate of capital appreciation at the time.

  More than a year, less than two years, the rate of return has reached nearly 100 times.

  Of course, the specific return is not calculated like this.

  Because Frame Media has integrated nine inter-industry companies, a large number of share swap operations have been carried out.

  Frame Media’s initial shareholder return rate is rumored to be only 25 times, which is based on the initial transaction consideration of 1.5 billion yuan.

  Roughly calculated based on the current 35 million yuan valuation of Frame Media, the rate of return is actually more than 40 times.

  The loss of more than ten times is naturally due to the dilution of a part of the equity by the share swap.

  Xia Jingxing is almost finished. Chen Hong guesses that he wants to bring himself into the partnership, invest a lot of cash for Frame Media, and prepare for the next acquisition and integration actions.

  Previous life, without his joining, Frame Media all adopted share swap operations.

  And if he provides a large amount of cash, it can greatly avoid the dilution of equity.

  Why Hanergy Investment and IDG no longer inject capital, naturally it is to avoid certain risks.

   Pulling Envision Capital into the partnership is a good deal of favor. Anyway, the equity will be diluted in the subsequent acquisition and integration operations.

  Xia Jingxing sighed in her heart, she really had a good calculation.

  Understanding the value of his own use, Xia Jingxing is not welcome.

   said lightly: "If you want to complete the integration of the industry, you need a lot of funds?"

  Tan Zhi nodded, "To tell you this, at first, we planned to adopt share swap acquisitions.

  If an investment institution is willing to provide us with cash, using cash for acquisition is undoubtedly the best way to ensure that everyone can get the most benefit. "

  Xia Jingxing smiled, “Then let’s just open the skylight and speak up, how much do you need? What is the valuation of Frame Media?”

  "Pre-investment valuation of 100 million yuan, financing of 50 million yuan!"

   Tan Zhixiao said, “We have calculated that with this money, plus Frame Media’s own cash, and some financial operations, we can basically take down the nine major competitors on the market.”

  (End of this chapter)