Return to 1958 and build a century-old giant

Chapter 820 Best Buy's Financing

“No problem, that’s only right,” Li Iacocca replied.

Now that I'm begging others to invest, I naturally have to follow their arrangements in many things. As long as they don't look at my company's core secrets, that's fine. Generally, it's just the information that listed companies should provide, only a little more detailed.

"That's good. I also hope we can cooperate soon," Yang Wendong nodded.

Even the current CEO of Chrysler isn't very confident he can save Chrysler, given the current state of the company and the uncertainty surrounding when the oil crisis will end.
But as a time traveler, Yang Wendong naturally knew that 80 years later, oil prices would fall from their peak, and that in the next ten years, the United States and the Middle East would have a good relationship. In order to cooperate in cracking down on the United States' oil export industry, the Middle East would begin to increase oil production on a large scale, leading to a sharp drop in oil prices.
This gave the Big Three American automakers a chance to revive and even go further.

Take Chrysler, for example. From 1979 to 1985, it went from losing $500 million a year to making a net profit of $1 billion in just five years—that's nothing short of a miracle. Of course, the drop in oil prices was part of the reason, but Lea Iacocca's abilities also played a part.

Therefore, now is the best time to invest in Chrysler. Currently, Chrysler's stock is worth less than one billion US dollars, but in five years, it will soar to more than five billion US dollars.

The increase of seven or eight times is higher than that of gold. However, the market is limited and cannot accommodate too much capital. Yang Wendong never thought of acquiring Chrysler, which was impossible. A Hong Konger with insufficient background could not possibly take on such a large piece of the pie. The US Congress would not agree to it either. He might as well just invest.

This is why he needed to prepare to invest in Chrysler before receiving the gold proceeds. If he waited until the US Congress gave Chrysler $15 billion, they would certainly not refuse to invest, but the terms would not be as readily offered as they are now.
Li Aike said, "Okay, I will fully cooperate."

Investing in Chrysler is not something that can be done overnight. At least in terms of procedures, it needs to go through the proper process. Even if it can be done quickly, it cannot be done by investing as soon as you meet with them. This is not an internet company where you can just look at some data. Chrysler is a large industrial group with assets of billions or even tens of billions of dollars.
The rest can be handled by professionals. Once they've completed the process, as long as there aren't any major problems, he can start investing directly.

On May 15th, Yang Wendong arrived in New York, not far from Washington, D.C. It was his first time staying in his newly purchased penthouse apartment in front of Central Park. The floor-to-ceiling windows offered a panoramic view of Central Park, America's most famous park, and to the side, the Statue of Liberty and the Twin Towers could be seen in the distance.
The world's most luxurious homes are not villas in mountainous or coastal areas, because these places are easily replaceable. Instead, the best quality apartments in the city center of megacities are gradually becoming the most sought-after.

Similarly, this is also a very safe and private fortress. The windows are all made of bulletproof glass, which is difficult to penetrate even with a sniper rifle. Even if it does penetrate, the aim is usually lost. There are also strict bodyguards at the bottom of the building.
This place is also a popular spot for many people to keep mistresses, and Yang Wendong was no exception. Occasionally, he would engage in casual affairs, and some actresses from Hollywood and Hong Kong were frequent visitors to his mansions. However, these were just for fun, and he would not leave any children to avoid unnecessary trouble.
The next morning, Yang Wendong arrived at the Twin Towers, one of the two buildings that went bankrupt in 01. Although he knew that the incident would not happen again, he still felt a little uneasy. However, he could not refuse the invitation, as the invitation was extended to the elite group of Wall Street.
"Tang, we meet again." Yang Wendong said with a smile, shaking hands with one of them.

This person is Don Valentine, the founder of Sequoia Capital. Although his main investment target is IT companies, as a venture capitalist, his funding sources are inseparable from Wall Street, so he can be considered a hybrid of finance and IT.

Don Valentine also smiled and said, "Eric, the last time we met was when Apple was raising funds, right? Haha, I have some good news for you. Apple should be preparing to go public next year."

"That's really good news." Yang Wendong's heart skipped a beat, and he asked, "Is it the first half of the year or the second half?"

Don Valentine replied, "It should be in the first half of the year? Is there a problem?"

Yang Wendong laughed and said, "No, the sooner it goes public, the better."

Originally, Apple was supposed to go public in December 1980, but due to its early support and Best Buy's strong distribution channels, it performed better than before, which naturally affected the launch date.
This is good, as he can cash out some of it sooner. The return on this Apple investment is the highest conversion rate he has ever achieved since starting his business, almost without exception.

In reality, Apple's profitability is not very strong, but it is precisely because capital across the United States and even the world is optimistic about it that its market value has skyrocketed. This is the charm of finance; it can be more profitable than IT itself.

Looking at the various large internet or mobile internet companies of the past, it's clear that the ultimate goal of IT is finance.
“Yes, it’s better to cash out sooner rather than later, it’s more reassuring. It’s a pity that Sequoia Capital didn’t participate much, far less than you, Eric,” Tang Valentine sighed.

Yang Wendong said, "I was among the first investors, so I benefited from this, haha."

Those who invest in the first batch naturally receive the highest returns, which is true in any era. Later investors, who invest after Apple has grown, spend a lot of money and resources, but their stock returns are far worse than their initial investment.

“That’s why I said your vision is even better than mine. Just Apple and Intel are enough to make all venture capitalists envious.” Don Valentine paused, then asked in a low voice, “Eric, I heard you’re going to invest in Chrysler?”

"Yes, that's possible," Yang Wendong nodded.

This kind of thing can't be kept secret. Chrysler is already facing a joint attack from banks, creditors, and suppliers. When it has a possible lifeline, it will inevitably publicize it to temporarily block out its creditors.

Furthermore, for a large company like Chrysler, contact with the team in Hong Kong involves hundreds of people, so it's impossible to maintain complete secrecy.

Anyone in the upper echelons of American society who pays even a little attention will know about this. Yang Wendong didn't intend to keep it a secret anyway, since it's necessary to disclose information when making an investment. In fact, the fact that the outside world knows about this now is actually an advantage for him, because if he stops investing, Chrysler will face an even bigger blow, which will become a bargaining chip for him.

Don Valentine said, "Eric, I'm not very familiar with traditional industries, but I do have some understanding of US government policies, the domestic economic situation, corporate operating debt, and so on."

Chrysler is now a huge quagmire. Even though some large banks on Wall Street, American oil giants, Chrysler and some people in the White House have approached them, they dare not get involved.

"I know you're financially strong, but compared to these giants, you're probably no match. You'd better be very cautious about things they wouldn't dare to get involved in." "Thank you, but I naturally have my own plans. Besides, I'm just making an investment, not guaranteeing anything for them. Even if I lose money, I'll only lose the amount I invested. I'm aware of that," Yang Wendong said with a smile.

Based on current data, Chrysler is indeed a huge problem. It was a top industrial giant in the United States with a huge scale, but once a company of this size falls into crisis, it will become a huge financial black hole. Even the US Congress has been arguing for a long time about whether or not to bail out Chrysler.

On the one hand, providing assistance would break the US government's principle of not intervening in corporate operations, and there are also concerns that the country's money would be lost once invested. On the other hand, not providing assistance would cause an unprecedented economic shock, potentially leading to hundreds of thousands of people losing their jobs and banks incurring bad debts, among other problems.

The White House also wanted large corporations and conglomerates to get involved, as that would be the easiest way. But these conglomerates aren't fools. Even families like the Rockefellers and Morgans wouldn't dare to get involved so rashly, because the risks are just too great.

Only Yang Wendong dared to invest because he knew the future, but that was all he did; he didn't care about anything else. This was also to avoid the possibility that if Chrysler failed to be saved, he would only lose that part of the investment.

“Alright, since you’ve put it that way, I won’t try to persuade you anymore.” Don Valentine continued, “Eric, let me take you to meet some elite figures on Wall Street. They are also very interested in investing in your Best Buy. Regardless of whether it succeeds this time, it’s good to get to know them first, so we can cooperate in other areas in the future.”

"Okay, thank you very much." Yang Wendong nodded and said;

As his business in the United States grew, it was time for him to meet the Wall Street tycoons who controlled the Americans behind the scenes.
There will inevitably be many areas where we need to cooperate in the future. As my business in the United States grows bigger and bigger, and I am still making money in the United States, it is natural that I need to cooperate with them. This is the safest way.

However, ostensibly, the reason for coming here this time is for Best Buy's financing;
When sales of personal computers from companies like Apple, IBM, and HP increased by tens of percentage points each quarter, these people also realized that the electronics industry was about to explode. Best Buy, which controlled the sales terminal channels and after-sales service, suddenly went from being an investment joke to a hot commodity.

As a result, many American capitals also wanted to get involved. Industrial capital invested in businesses similar to Best Buy, while Wall Street financial capital wanted to invest directly in Best Buy.

This is also one of the reasons why Yang Wendong was willing to accept investment. If Best Buy did not accept investment, its competitors would have access to massive amounts of capital to wage price wars or other forms of competition, which would be a loss for him.

“Eric, this is from Goldman Sachs. This is from Morgan Stanley. This is from Lehman Brothers,” Don Valentine introduced them one by one.

Yang Wendong shook hands with each of them and got to know them. These people may be employees, but behind them is a group that truly controls Wall Street and even half of the United States.

After getting to know more than a dozen people, everyone sat down.

"Ladies and gentlemen, I have brought Best Buy's financial data. This is prepared according to the information published by listed companies. Please take a look first, and we will discuss it later." Yang Wendong said.
His assistants then distributed documents to the investors who had come to the event.
As a retail company, Best Buy doesn't really have any major core secrets. In addition, Best Buy is preparing to accept financing and even go public in the future, so it's not a problem to release some appropriate information.

Wall Street elites also began to take a serious look at Best Buy's data. From early losses and heavy debt to its gradually improving financial situation, Goldman Sachs Vice President Barney exclaimed in surprise, "Best Buy is already profitable? Last quarter's net profit was $360 million?"

“Yes, that’s because the previous investment was too huge, plus the recent increase in the benchmark interest rate, which has increased the interest figures. Otherwise, it wouldn’t be difficult to break ten million in profit.” Yang Wendong said, “And according to the current trend, the future profit margin will become stronger and stronger, especially since personal computers have become a dream home appliance for many people, which will inevitably drive Best Buy’s business to grow stronger.”

More than a decade of hard work and investment is finally starting to pay off. With the rise of new electrical appliances such as personal computers and portable music players, coupled with the chip industry driving the further upgrading of traditional home appliances, people's demand for electrical appliances has become extremely high.

Traditional supermarkets' services are gradually falling behind the times. After all, their core business is still daily consumer goods retail, and they cannot afford to invest huge resources in the electronics market, nor do they have that much room for it.

Another major challenge is after-sales service. If after-sales service is inadequate, blindly expanding sales will only backfire.

Best Buy, on the other hand, was positioned from the very beginning as a comprehensive, spacious, and well-equipped system with complete after-sales service. Today, with the expansion of the electronics market, it has finally ushered in its spring.

The Wall Street bigwigs huddled together in hushed tones for a while. After a moment, Barney asked, "Eric, what's your valuation of Best Buy?"

“15 billion US dollars,” Yang Wendong said with a faint smile.

"15 billion?" Many people's expressions changed, and the noise in the conference room suddenly became much louder.

After a while, Barney asked, "Eric, isn't a valuation of $15 billion a bit too high?"

$15 billion is an astronomical sum. You know, Chrysler only applied for $15 billion from Congress, and it caused a huge uproar in Congress over it.

PS: Please give me a monthly ticket
(End of this chapter)