Chapter 109 Analysis

Chapter 109 Analysis

Chapter 109 Analysis
There is a problem with Fenzhong Media!

SEC announces public investigation into whether Fenton Media violated securities laws!

Shen Nanpeng knew something had happened when he heard the secretary's report on the phone.

He is quite familiar with the relevant mechanisms of the SEC. The fact that they are conducting an open investigation is a sign of their attitude, which in itself proves that they have relatively certain evidence in their hands.

As for whether there is any problem with Fenzhong Media...

Shen Nanpeng hung up the phone without even hiding his expression, which was quite solemn.

When he invested in Fenzhong, Sequoia Capital China had not yet been established. He was an individual investor at that time. Later, he became an independent director of Fenzhong Media and had a good relationship with the head Jiang Nanchun.

Shen Nanpeng often receives calls from Jiang Nanchun, and has also given advice to Fenzhong on whether to acquire other companies, and is generous in sharing his experience in strategy and capital.

Even Sina CEO Cao Guowei joined Fenzhong Media as an independent director, which was also strongly promoted by Shen Nanpeng.

"What's wrong? What's the matter?" Xu Xin noticed the change in Shen Nanpeng and asked.

Shen Nanpeng did not hide the public information. He let out a long breath and replied: "The SEC is going to investigate Fenzhong Media."

After a brief thought, Xu Xin hesitated and said, "That's going to be bad."

Shen Nanpeng pursed his lips and couldn't help but pounded his fist on the table: "Yeah! The deal between Sina and Fenzhong is probably going to fail!"

Just last month, Sina and Fenton reached an agreement, whereby the former will issue an additional 4700 million common shares and acquire Fenton's building TV, frame advertising, store advertising and other businesses and related assets at an initial price estimated at approximately US$13.7 billion.

This batch of assets is Fenzhong’s core assets, accounting for more than 50% of its revenue.

The relationship between Sina and Fenzhong has always been very good. In addition to Sina CEO Cao Guowei being a Fenzhong director, Fenzhong's advertising company "How to" also represents Sina's advertising. Earlier, there were rumors that Fenzhong would acquire Sina by exchanging shares, but as Fenzhong's stock price fell in 2008, Sina eventually changed from a seller to a buyer.

Xu Xin sensed Shen Nanpeng's annoyance and anger, and asked tentatively: "I heard that Sina's management wants to do an MBO?"

Shen Nanpeng nodded slightly, confirming this.

Yu Xing didn't mind being interrupted in his financing talk, so he interrupted and asked, "What is MBO?"

Xu Xin also didn't mind listening to more news by way of explanation: "MBO is a management buyout. Sina's equity is dispersed. I heard that CEO Cao Guowei wants to have a firm control."

Liu Jiankai, vice president of Capital Today, who was in the office, heard this and said, "Sina's equity has always been dispersed, and the personnel struggle is quite fierce. It has also faced a hostile takeover by Shanda."

Both of them were explaining for Yu Xing, but Shen Nanpeng knew that they were also talking to himself.

But there is nothing bad to say about taking a bath.

"If it weren't for Sina's internal problems, it would definitely be better than it is now." Shen Nanpeng frowned and said, "So, Sina's acquisition of Fenzhong's assets by issuing additional shares this time is also to introduce new shareholders, which is the more important thing."

Xu Xin nodded and said, "Indeed, the market is not very optimistic about the effect of this acquisition, even though Sina claims that it will become a better new media company."

The acquisition of a company requires a reasonable reason, but the purpose of capital operation has a higher priority.

"The two sides have reached an agreement, but the acquisition has not yet been completed. It will be completed by September this year at the latest." Shen Nanpeng sighed, "However, the SEC is now investigating Fenzhong, so this acquisition will definitely not work."

Upon hearing this, Yu Xing expressed his humble opinion: "Even if the SEC investigates, there may not necessarily be a problem."

Shen Nanpeng glanced at the young college student entrepreneur and said nothing.

"No, ahem." Vice President Liu Jiankai took care of the feelings of the Fenzhong directors present and said, "This will mainly undermine market confidence. Sina's internal opinions are not unified. If there are problems with the acquired assets, the transaction cannot be carried out anyway."

Shen Nanpeng was silent for a few seconds, avoiding the discussion of this topic, and shook his head and said: "It's not just the impact of this matter. If the transaction between Sina and Fenzhong goes smoothly, the next step is actually to let 'Haoye' go public in disguise."

Xu Xin immediately understood after hearing this: "Oh, the core business has given way."

Liu Jiankai also understood: "The current environment is not suitable for the spin-off of 'Haoye' to go public."

Yu Xing didn't quite understand, so he asked, "How do you say that? How do you say that?"

He heard Xiaoying mention the asset acquisition of Sina, but that had no impact on Guoshanfeng's action. However, he did not hear about the "good thing" of this disguised listing.

"The original core asset was taken away by Sina, and 'Haoye', which ranked behind, naturally became the new core asset, and Fenzhong, a listed company, was directly transformed." Shen Nanpeng said lightly about Fenzhong's plan, "The impact of this financial crisis is very large. If 'Haoye' is split and listed, the procedures are complicated and the price is not good. It is better to go public in disguise like this."

Yu Xing nodded, "I understand. I've learned a lot. Thank you for your answer, you are a good person."

"The transaction between the two listed companies, Sina's MBO, and Haoye's disguised listing," Shen Nanpeng said helplessly, "all these plans have been disrupted."

Yu Xing didn't say anything and just listened silently.

Xu Xin was indeed curious and asked, "Why did the SEC suddenly investigate? This situation seems a bit serious."

Shen Nanpeng frowned again: "There is a research company called 'Guoshanfeng' that released a report questioning Fenzhong's data and financial statements almost a week ago, but it didn't have much impact before. This time it should be their work again."

"Because it released a detailed 40-page research report within five minutes of the SEC announcing the investigation, it was very clear."

Yu Xing remained silent. It sounded like some people in Fenzhong were paying attention to it and even taking it seriously.

Xu Xin repeated the name he heard: "Guo Shanfeng? This name is a bit strange."

"Another name for the King Cobra." Shen Nanpeng took off his gold-rimmed glasses and rubbed his eyes. "Now we can be sure that this is a new short-selling organization. I don't know if it is domestic or foreign."

Liu Jiankai said with interest: "Short-selling institution? Since it is named like this, there should be no such name abroad. It is likely that it is done by people in China."

Yu Xing remained silent. Under such circumstances, he heard the name "Guo Shan Feng" from others...

Wonderful!
So exciting!
Xu Xin said with some emotion: "The name is not wrong, it is quite poisonous. Sina and Fenzhong will definitely fall when the market opens."

Yu Xing took a sip of tea and asked for your good wishes.

Well, Sina’s was an accidental injury…

Who knows about your capital operations? In the final analysis, as Vice President Liu said, flies don't bite seamless eggs!

There was a brief silence in the office.

The attack over the mountain peak comes at a critical juncture and will lead to a series of changes. In addition to the two listed companies, the direction of the assets acquired by Fenzhong itself has also deviated from the plan.

As a party with relevant interests and even deep stakes, it is hard for Shen Nanpeng not to feel excited.

But no matter how excited he was, he talked about the information that could be made public and the information that could be invalidated. He could not discuss the rest with Mr. Xu, and it was not suitable for others to hear it.

It is better to solve the current problems first, and then look at the related changes.

Shen Nanpeng had a headache. He drank half a cup of herbal tea and looked back at the founder of Bai Xiaosheng. This time, he did not discuss it with Xu Xin and his tone was a little cold: "Yu Xing, I would rather look at Bai Xiaosheng's development model. 250 million US dollars, 30%, and the rest remain unchanged. This is the best price."

Yu Xing was a little surprised and said regretfully: "Mr. Shen, I just said that Bai Xiaosheng's A round has been shelved. If a B round is needed, I will definitely consider you two again."

Shen Nanpeng's face darkened, and he felt that this was a game of haggling over the price.

But he really wasn't in that mood right now, so he said bluntly: "Boss Yu, you just started your own business. I heard that you achieved some results in your last project, but that was not enough to support the operation of Bai Xiaosheng for even half a year. What Bai Xiaosheng needs least now is your arrogance or pride." "On the contrary, what Bai Xiaosheng lacks most is experienced guidance. You don't have to doubt what Boss Xu thinks of your company."

Seeing that Yu Xing was indifferent, Shen Nanpeng said more sharply: "At the very least, the scale of Bai Xiaosheng should be larger and more amazing, then we might have some unnecessary ideas."

Yu Xing stood up again, and Zhong Zhiling and Lu Haiying beside him also stood up.

They had actually stood up once just now, but Shen Nanpeng's reaction after receiving the news made the three of them sit back down.

Yu Xing extended his right hand gracefully: "Mr. Shen, Mr. Xu, I look forward to our future cooperation."

At this moment, Shen Nanpeng finally confirmed the decision of the young man opposite him. It was not a tug of war, but a real intention to shelve the A round of financing with Sequoia Capital and Today Capital.

He was inevitably confused, so he didn't reach out his hand and uttered three words: "Why?"

"I hope to get $300 million in financing. I feel that 30% of the shares is too much. Bai Xiaosheng needs money, but I believe our mechanism is suitable for the current market." Yu Xing saw that neither of them had the intention to shake hands, so he withdrew his right hand. "Workplace social networking is not a new thing, but the fact that there has been no successful company means that past experience is not that important."

Xu Xin said at this time: "Yu Xing, you are indeed a little too confident."

Yu Xing glanced at the head of Today Capital in front of him. The excitement of the success in the first battle over the mountain made him feel a little inflated, but he still controlled what he wanted to say and just gave Xu Xin a smile.

Mr. Xu, don't be anxious. I know that Today Capital has invested in Tudou.com, and I know that the couple who founded Tudou.com don't have a good relationship.

"Business experience is often interlinked." Shen Nanpeng was first rejected, then impacted by the SEC investigation, and now puzzled by the decision of the young man in front of him. His voice was cold and his words were inevitably mocking. "If everyone thought like you, there wouldn't be 32 CEOs present at Sequoia China's annual meeting."

Yu Xing grinned and politely asked, "Really? Then can you show me the list of those 32 CEOs?"

He was really a little curious.

Shorting only Fenzhong not only involves Sina, but also is related to Haoye. There are obviously other capital operations. So, I wonder if there are any more exciting targets among the 32 CEOs?

Shen Nanpeng felt confused by such a request. Did he think that he was lying about this matter?

He looked at Yu Xing coldly, but saw an abnormally passionate look in the other person's eyes.

Shen Nanpeng was confused, but he was no longer interested in talking, and finally expressed his thoughts: "Your valuation is too high, it's impossible."

Yu Xing smiled and said: "Although I don't have much experience in entrepreneurship, I feel that running a business is similar to when I was studying medicine. The mechanism of Bai Xiaosheng is like the human skeleton."

——After the SEC officially announced its investigation, many employees at Fenton Media quickened their pace, some rushed to their boss’s office, and some answered the suddenly increasing number of phone calls.

"The letter of intent is like a scalpel. It makes a Y-shaped cut from the shoulders down to the lower end of the sternum, showing the skeleton of our project, and you agree that there is no problem with such a skeleton mechanism."

——Many financial journalists and well-known media are taking action. Sina reached an agreement with Fenzhong last month, which was already eye-catching. Now Fenzhong has suddenly encountered unexpected changes, and the changes in it are the best reporting material.

"For bone health, users are like internal organs. Baixiaosheng's 10 users prove that there is such a demand in the workplace. Whether it is positive or negative, their daily activities are providing us with strength and will further strengthen ourselves."

——In the chairman’s office of Fenzhong, Jiang Nanchun slammed his phone to the ground with a loud bang, “Over the mountain! Over the mountain?! Over the mountain… peak!!”

"We hope that the money we raise will be our flesh and blood. After our bones and internal organs have been examined, I believe there will be people who will recognize that our flesh and blood will become abundant along with our bones and internal organs."

—— Senior Vice President Ma Ruifeng broke into the chairman's office and informed him of the latest news with an unpleasant look on his face, "Boss Jiang, the Securities Regulatory Commission here also called to ask about the situation!"

"So, Mr. Shen, don't worry about whether our valuation is high or not. If we must discuss it, we can discuss it during the B round."

——"Clatter", Jiang Nanchun swept the things on the desk to the ground, and the chairman's office of Fenzhong Media was in a mess.

Yu Xing finally said: "Boss Shen, Boss Xu, see you next time."

Bai Xiaosheng's trio left the office of Capital Today with no one seeing them off.

Shen Nanpeng and Xu Xin looked at each other in confusion.

A few seconds later, Shen Nanpeng commented: "The thinking sounds unusual."

Xu Xin shook her head: "If he has an extraordinary mindset, then he is not an ordinary person."

She thought for a moment and then said, "What if a bastard has unusual thinking?"

Shen Nanpeng said with some black humor: "Then we have to chase him quickly, which means he is about to succeed!"

Having said that, neither of them had any intention of continuing the financing. Bai Xiaosheng did have potential, but there was a limit to his valuation, and considering the performance of the key figures...let him be.

The two of them didn't move. Vice President Liu Jiankai, who was in charge of the matter recently and felt that it was a sure win, still wanted to fight for it one last time. He said, "Boss Xu, Boss Shen, I'll go see them off and ask them one last time."

Shen Nanpeng did not comment.

Xu Xin still nodded slightly.

Liu Jiankai hurriedly chased out of the office.

About five minutes later, Liu Jiankai came back.

"How is it? Still pretty arrogant, right?" Xu Xin knew from his expression that it was not unexpected, and smiled, "What did he say?"

"Well, I don't want to hear about his mechanism and anatomy." Liu Jiankai said carefully, "I just said that Bai Xiaosheng was short of money and asked him to give a more reasonable reason. Well... he said that Bai Xiaosheng had previously said that he would not accept investment from large companies, and Mr. Shen has the background of Xiecheng..."

Shen Nanpeng just found it funny: "How could I be eliminated because of Xiecheng?"

Seeing Liu Jiankai's eyes evading, he asked again, "What else did you say? Just say it."

Liu Jiankai actually didn't mind the big deal, so he said directly: "Yu Xing said that he had doubts about the operations of Mr. Shen and Fenzhong. Uh, that's the general idea."

Shen Nanpeng's face turned dark and he didn't know what to say.

Xu Xin asked: "What if I reject Capital Today? Because I want to set up an office at Bai Xiaosheng? Valuation?"

Liu Jiankai really didn't want to say anything more to his boss.

Xu Xin was impatient: "Just say it directly, why are you trying to hide it?"

Liu Jiankai took a deep breath and said, "He said he didn't want to hurt the relationship between you and Mr. Li."

Shen Nanpeng's eyes became obviously surprised.

Xu Xin laughed after hearing this, but there was no smile in his eyes. He gave a two-word evaluation: "You have guts."

Liu Jiankai pursed his lips and said, "Well, the words were slightly embellished, but it's okay."

Yu Xing said that if Fenzhong was cut open, the inside would stink, but Mr. Shen didn't find it smelly and didn't want to take Sequoia's money. The New Year was approaching and he had just seen the couple arguing at the company headquarters, so he didn't want to cause a scandal in the industry.

Hmm...kind of.

(End of this chapter)