Chapter 305: A Big Gamble
Li Xiaofan smiled and said: "Mr. Sun, so far, the price offered by SoftBank is indeed the best among all investment institutions interested in investing in Yahoo!"
"Then why haven't you accepted the strategic investment from our SoftBank Group? According to our understanding, Yahoo seems to be very short of money right now. It's almost time for the rice to fall off the pot..." Masayoshi Son said in confusion while holding a wine glass.
"Mr. Sun, the latest situation may have changed a bit. Yahoo America has just received two large advertising deals from Ascendas Group, Singapore's largest industrial park developer, and Chengfa Real Estate, Singapore's largest luxury home developer. The two pieces of business combined are 1.46 million U.S. dollars. Moreover, many large institutions and companies in Singapore and the Asia-Pacific region are currently communicating with our Yahoo! Singapore company and are interested in advertising on the U.S. Yahoo website. Now, the U.S. Yahoo website has a very high number of clicks. The popularity is very attractive to these big businessmen in Asia!”
"Yesterday, our Yahoo management made an evaluation and found that after receiving these two advertising orders with a total amount of US$1.46 million, it will be no problem for Yahoo to achieve profitability in its annual report for 1995. These latest benefits are from DFJ Investment, This happened after several investment companies such as IDG and Carlyle Group completed DD due diligence. Therefore, Mr. Sun, if we pass this good news to these large companies now, we think they will re-evaluate Yahoo. value……"
Li Xiaofan continued: "In addition, Mr. Sun, you may also know that our Yahoo company has begun the pace of entering the Nasdaq market public offering IPO under the leadership of Mary Meeker, a famous Internet analyst from Morgan Stanley. If everything goes well, it will be listed on the US Nasdaq market around April next year. According to estimates from Morgan Stanley, Yahoo’s reasonable market value will be at least US$500 million!”
In a previous life, on April 12, 1996, Yahoo's shares were officially listed on Nasdaq in the United States. Before going public that year, Yahoo issued 2.6 million shares, accounting for 10% of the total equity, at a public offering of $13 per share, raising $33.8 million. Based on this issuance price, the market value of Yahoo's shares at the time of issuance was US$100 million.
In the previous life, on April 12, 1996, the day Yahoo went public, Yahoo was enthusiastically welcomed by Wall Street investors. The stock price opened at US$24.5 and closed at US$33 that day. The market value on that day directly reached more than 850 million US dollars.
At that time, Yahoo's annual revenue in 1995 was only US$1.3 million, and its actual loss for the year was US$630,000. In other words, this time Li Xiaofan helped Yahoo in the United States obtain US$1.46 million in business, doubling Yahoo's revenue in 1995, stopping losses throughout the year and making a slight profit.
Sun Zhengyi is a top-notch smart man. After listening to Li Xiaofan's words, he asked: "So Mr. Li, according to your shareholders, what should be the current valuation of Yahoo?"
Li Xiaofan held out three fingers: "At least 300 million US dollars!"
After hearing this, Masayoshi Son exclaimed: "Oh my god, 300 million US dollars. Mr. Li, your current offer has already fulfilled all of Yahoo's future imagination! I believe that none of the current Wall Street investors Investment institutions will accept your current offer..."
After hearing Sun Zhengyi's complaint, Li Xiaofan was not in a hurry. He slowly and politely grabbed the wine bottle, filled up the wine glass in front of Sun Zhengyi, then raised the glass and said: "Mr. Sun, come here, I will be the last Here’s to you a glass of wine, cheers!”
"cheers!"
After the two of them drank the drink, Li Xiaofan grabbed a towel and wiped his lips and said: "Mr. Sun, it doesn't matter. Business is not friendship, so let's just make friends! With the current situation between our Singapore company and Nanyang Tang Group, Strength, we have enough funds to support Yahoo! USA to be listed on Nasdaq in the first quarter of next year..."
Seeing that Li Xiaofan looked like he wanted to stop today's exchange and get up to leave, Sun Zhengyi became anxious. He said to Li Xiaofan: "Mr. Li, the quotation you just made is not without room for negotiation!"
"Mr. Sun, I'm sorry, I need to go to the bathroom first, please wait a moment!"
It turned out that Li Xiaofan got up to go to the bathroom, and Sun Zhengyi found that he was a little too hasty.
But I have to be anxious! SoftBank Group, which he previously controlled, bought the U.S. Comdex exhibition business for US$3 billion, and recently planned to acquire the publishing department of Ziff-Davis for US$3 billion. Next, he has many acquisition plans to build up his business. The huge SoftBank empire...
Behind these dazzling mergers and acquisitions, he and his SoftBank Group will face a huge debt crisis. Some Wall Street media have published many questioning articles.
So for Son, the best way to balance debt is to take a big gamble and invest in an Internet dark horse like Yahoo that has not yet been listed, and make a lot of money after it goes public!
These little thoughts of his have long been clearly understood by Li Xiaofan who has returned from rebirth!
Now, Li Xiaofan has picked up on Masayoshi Son, so Li Xiaofan is not anxious at all. He knew that the most anxious person at the moment was Masayoshi Son across the wine table.
Li Xiaofan slowly came back from the bathroom and sat down. He smiled at Sun Zhengyi and said, "Mr. Sun, did you just say that there is still room for negotiation between us?"
"Mr. Li, if I agree to the condition you just proposed to value Yahoo at US$300 million, when can this investment agreement be signed?" Son gritted his teeth and said.
Then, he continued: "Mr. Li, I have been very busy recently and may not have more energy to deal with you Yahoo shareholders. In this way, I accept your $300 million valuation, and our SoftBank Group will invest $100 million." U.S. dollars! In order to avoid long nights and long dreams, I ask all of you Yahoo shareholders to reach a consensus and sign a contract with us before get off work tomorrow. Can you meet this condition?"
Li Xiaofan smiled and said: "I personally think this condition should not be a big problem, but after all, such a big matter involves the interests of every old Yahoo shareholder. Therefore, the condition you mentioned also requires me to consult with all shareholders after calling them I will reply to you after you give me your opinion..."
"Can I make a call now?" Son Zhengyi asked impatiently.
Li Xiaofan checked the time on his watch. It was only 8:30 pm local time in the United States.
"Okay, Mr. Sun, please wait a moment. I will go out and have a phone call with Mr. Yang Zhiyuan, Ferro and Mr. Moritz to listen to their thoughts and then give feedback to you!"
When Li Xiaofan called Jerry Yang, the two founders, Jerry Yang and Ferro, were working overtime in Yahoo's new office.
"What, an investment of US$100 million and a valuation of US$300 million? Did I hear correctly?" Li Xiaofan's call shocked Yang Zhiyuan.