What's wrong with me being a rich man?

Chapter 570 Connection (4k)

360 is actually going to be privatized and delisted.

This was beyond Yu Xing's expectations.

Although he knew about this matter and that 360 would be relisted in China after its delisting, he was unclear about the specific timing. His pessimism about the small short sellers trying to take action against 360 was simply based on the big short sellers' judgment on the timing of their short selling.

Of course, this matter was not important to him. "Real research" is not a misstep. It is not a horse at all, and it does not have hooves. Adding another stroke to a failed attempt is irrelevant.

Yu Xing was considering the impact of 360's privatization on the potential deal with Universal Key, because the scale of such privatization would inevitably be huge.

In layman's terms, privatization means buying back the company's shares on the stock market. However, the U.S. SEC actually requires the acquisition of all issued shares, not just those traded on the secondary market.

Simply put, the transaction structure for privatizing US stocks is to make a full takeover offer to all shareholders, including the shares held by major shareholder Zhou Hongyi, which will also be acquired at the same price.

The buyer will definitely still be led by Zhou Hongyi, but he will need to establish a new private company as the acquirer, which will be specifically used to acquire all the shares, including his own.

This way, 100% ownership is achieved, turning a publicly listed company into a private company.

Therefore, the amount of funding required will inevitably be huge, the process will inevitably be complicated, and the time required will be foreseeably not short.

Yu Xing doubted whether 360 had the time, funds, and energy to handle the transaction with him at this critical juncture.

While he was considering this, Xiong Xiaoge, who learned through an online meeting that silicon carbide was interested in selling the universal key, obviously had similar thoughts. He then called and offered to help find a new buyer.

"Mr. Xiong, the market is so small, who else can you help me find?" Yu Xing asked, already having the answer in mind.

The internet market is huge, but there are very few buyers who can handle a transaction like Master Key.

Competitors like Alibaba and Tencent are immediately excluded, as they are unlikely to invest in silicon carbon at such a juncture, thereby putting pressure on their own products in the short video market.

Other companies like Sina, Weibo, Sohu, and NetEase don't have much incentive to make a name for themselves with such software. In other words, even if they wanted to buy it, they would definitely want an extremely low price that would be very attractive.

So, besides 360, the only other option left is Baidu, which still retains its status as a giant.

Xiong Xiaoge has a good relationship with Baidu; he approached Baidu back when he wanted to support WeChat.

Sure enough, the answer was the same as what I had in mind.

Xiong Xiaoge replied, "Baidu should be somewhat interested. Although your relationship isn't great, these things are negotiated."

The main reason for the strained relationship between Lingang and Baidu is the existence of the Baixiaosheng Forum. With BOSS Yu Xing on board, Baixiaosheng has always been known for its high standards in the industry, and it has discussed many negative aspects of Baidu. Several attempts to communicate with Baidu were rejected, and they even contacted Yu Xing himself, but the result remained unchanged.

“Alright then, you can ask around for me. No need to make a big fuss, we’re not in a hurry. Let’s try Baidu. I doubt they’ll be willing to pay a high price. I saw they invested in two bus Wi-Fi companies this year.” Yu Xing thought it was worth asking around and added, “Part of this funding will be used in the merger of Carbon Silicon and Douyin, and the rest will be used for the company’s development.”

Xiong Xiaoge smiled and said, "How do we negotiate this price?"

"Given the size of Universal Key, Baidu spent $19 billion to buy 91 Assistant back then, so asking for $20 billion isn't unreasonable, is it?" Yu Xing asked.

Xiong Xiaoge pondered for a moment and said, "I don't think it's excessive. Asking for an exorbitant price and then trying to bargain on the spot might scare people away."

He immediately came up with an idea: "How about this, Mr. Yu, the official statement is that Silicon Carbon is reluctant to sell the universal key, but has no choice but to sell it due to the pressure of competition in the short video market. Then we can talk about it again. There's also the matter of Silicon Carbon merging with Douyin."

Yu Xing agreed to cooperate: "Okay, no problem. And don't forget 360, maybe we can still squeeze out some money."

It doesn't matter who the buyer is for Master Key. 360 has been slow to make a move. I initially thought it was part of their acquisition strategy, but now it seems that they may simply be lacking resources.

As for Baidu, its sluggishness makes it hard to believe it has the determination to acquire Universal Key. It's currently thinking about going all in on O2O, and soon it will go all in on AI. Its own strategy is in a daze.

After ending his call with President Yu, Xiong Xiaoge felt that taking such a big risk was not a good idea, so instead of contacting Baidu immediately, he discussed with IDG partner Zhang Suyang how to execute the plan.

Zhang Suyang's primary focus was not on the universal key, but on the merger of Carbon Silicon Data and Douyin.

He asked Mr. Xiong, "Should we keep trying to merge Silicon Carbon and Douyin? I think it would be great if Douyin could develop independently and eventually go public. We hold a 4.8% stake in Douyin. If that stake is transferred to Silicon Carbon's parent company, it will definitely be weakened. It's far better to have it listed independently in the future."

TikTok raised two rounds of funding last year, with its latest Series B valuation at $13 billion.

Ten institutions entered in these two rounds, taking a total of 44% of the equity. If they join forces, they will have a lot of say in the merger.

“Carbon Silicon Data itself is developing very quickly. Every time I talk to others about the advertising effect of its latest hot topic, I can’t help but marvel at how things that didn’t work in the PC era have actually worked in the mobile internet era,” Xiong Xiaoge said calmly. “If Carbon Silicon Data hadn’t been short of resources, Douyin wouldn’t have been so aggressive in raising funds. It’s already quite good that they were able to get these shares.”

In hindsight, IDG, Capital Today, and other institutions made the right decision to invest, as Douyin did indeed achieve a leading position in the domestic market, even against competitors like Alibaba.

However, there was indeed a risk involved in paying that money at the time.

Xiong Xiaoge believed that the gains from the initial risk were already satisfactory, but he also knew that it wasn't limited to the mindset of Zhang Suyang and others. He then said with a smile, "The problem isn't what we think, but whether we can succeed even if we do it."

He calculated: "There are 10 institutions in total. Let's assume the 5 from Series B are opposed. As for the 5 from Series A, we don't need to count Red Falcon, they're definitely on Mr. Yu's side. We don't need to count Zhejiang Investment Group either. Carbon Silicon Group is in discussions with Zhejiang Province about cooperation, so they won't offend Mr. Yu on this matter. Ms. Xu from Today Capital... she's probably a bit hesitant, but still leans towards supporting Mr. Yu. Qiming Venture Partners, uh..."

Thinking about Qiming Venture Partners' actions, Xiong Xiaoge vaguely said, "Qiming's people are rather chaotic in their work. I don't know what they're thinking yet. Just look at these few companies; their combined proportion is enough to drive things forward."

Based on this calculation, the shareholding ratio in Yu Xing's camp is 70.4%, which already constitutes absolute control.

Zhang Suyang frowned and thought for a moment, then said, "How about I ask around again and see what others think?"

Xiong Xiaoge remained noncommittal: "Why bother with this effort?"

Zhang Suyang felt that President Xiong's attitude was not firm enough, so he decided to ask about the situation again.

His first call was to Xu Xin of Capital Today, hoping to get a clear answer.

After listening quietly to Zhang Suyang's probing, Xu Xin asked directly, "Is this your idea or President Xiong's idea? Why is President Xiong changing his mind again? In principle, I support President Yu."

Zhang Suyang raised questions about this principle.

“President Yu has built this business empire in Lingang; he’s successful. Of course, I’ll follow a successful person,” Xu Xin replied.

Zhang Suyang understood that President Xu's stance was firm but conditional. He said, "President Xu, as long as you stand with us, we can succeed."

Xu Xin laughed and said, "Never mind then, Mr. Zhang, why don't you ask someone else?"

After being conditionally rejected, Zhang Suyang thought it over and over again and then called Hu Xubo of Qiming Venture Partners, hoping to get clear support so that he could persuade President Xu and even Zhejiang Investment Group's position.

Hu Xubo was a little confused by President Zhang's roundabout words and asked, "Wait, President Zhang, wait a minute, is Silicon Carbon going to acquire Douyin? Is it confirmed? I haven't heard anything about it."

"Uh, I'm not entirely sure, but let's talk about this first. It's going to happen, so we need to have a plan in mind," Zhang Suyang said.

Hu Xubo said without hesitation, "Then I'll listen to President Yu. I'll do whatever President Yu says."

"..." Zhang Suyang asked after a moment of silence, "Judging from the current situation, it would be a better choice for institutions for Douyin to develop independently and go public."

"A low-grade donkey can't guess the quality of a high-grade horse." Hu Xubo advised instead, "President Zhang, don't make wild guesses. If you can judge so well and accurately, why don't you go into the market and make a name for yourself? If you have the guts, go and compete head-on with President Yu. We should be friends with time and friends with President Yu."

He hung up the phone immediately, unwilling to get involved in such matters.

Zhang Suyang was furious.

At this point, there is almost no hope left.

However, he still called Cai Haoyu of Zhejiang Investment Group. Considering the relationship, he wasn't so direct this time, but simply asked Cai Haoyu about his thoughts on the future merger of Carbon Silicon Data and Douyin.

Cai Haoyu was very decisive; he hung up the phone and immediately filed a complaint with President Yu.

Upon hearing this, Yu Xing laughed and said, "Oh, it's nothing. He was just asking. It's normal to have different opinions on this kind of thing. It's not like I can't even ask him."

Cai Haoyu praised President Yu's demeanor.

But he felt that this matter couldn't just be left unresolved.

Cai Haoyu then called Zhang Suyang again and berated him mercilessly. Regardless of whether President Yu knew about it or not, he wanted to demonstrate that Zhejiang Investment Group and Lingang Carbon Silicon were on the same side.

Zhang Suyang's attempt to orchestrate the situation only resulted in a humiliating defeat, and he then briefly explained the situation to Xiong Xiaoge.

Xiong Xiaoge laughed and said, "That works too. The five companies in the Series B round will definitely ask the same questions after they find out. Let's treat it as a stress test."

Zhang Suyang had no choice but to admit defeat.

Two days later, a report from IDC (International Data Corporation) circulated widely in the industry. It mainly analyzed the competition in the domestic short video market and concluded that the current situation is very close, and both Douyin (TikTok) and Silicon Carbon Data are under financial pressure.

International Data Corporation (IDC) is a consulting firm under IDG, and such reports are likely to be influenced by relevant factors about 50% of the time.

Xiong Xiaoge's reposting of this report on his WeChat Moments shattered any possibility of a second chance, sending a clear signal that both Silicon Carbon Data and Douyin (TikTok) indeed need more funding.

Two days later, a post on the Baixiaosheng Forum revealed that Carbon Silicon Data Company was considering the monetization of its businesses and hoped to obtain funding to support the competition in short videos. The post included a summary of the latest hot topics, the prospects of Universal Key and Together Karaoke.

The carbon and silicon data did not respond to this speculation.

Just as the industry was discussing the matter, Zhang Suyang inadvertently attended a dinner in Beijing where Baidu executives were present. He successfully made contact with them and relayed this interest to Baidu's decision-making level.

Like 360, the software that provides free Wi-Fi sharing is now known in the industry not only for its core business but also for its ability to boost traffic on Douyin (TikTok).

When Baidu discussed the Universal Key feature, the discussion naturally turned to the prospects of short video services.

Ok……

Anyway, with Meituan's investment in Tencent, Baidu's group-buying business is already in a mess, so why not try short videos? After all, we're already in a mess anyway.

Baidu contacted Lingang Silicon Carbon, but the response was that they had no intention of selling at the moment, which contradicts the rumors circulating online.

Zhang Suyang acted as the middleman, explaining, "It seems 360 has already inquired about prices, and the negotiations are probably going well."

Baidu and 360 have a rivalry and animosity. Upon learning that 360 had intervened, the focus of the discussion naturally shifted to Xiong Xiaoge, the head of IDG, hoping that this silicon carbon shareholder could mediate.

While Xiong Xiaoge was communicating with Baidu, Zhou Hongyi of 360 became restless after witnessing the industry news.

Zhou Hongyi contacted Yu Xing directly and questioned him: "President Yu, didn't you say you'd give us time to consider? How come you're talking to Baidu again?"

“I haven’t talked to Baidu. I don’t know where they got the information. They contacted Mr. Xiong from IDG. I haven’t had any specific contact with them yet. I’m just waiting for your reply.” Yu Xing didn’t mention Zhou Hongyi’s cold treatment of the acquisition, and said considerately, “I heard that 360 is going to be privatized. Mr. Zhou, I’m not in a hurry. Let’s talk about it after you’re done with your work.”

Upon hearing these words, Zhou Hongyi immediately sensed that things were not going well. President Yu was being too polite; it sounded very fake.

He judged others by his own petty standards and laughed, "Mr. Yu, you're not thinking of getting Baidu to inflate prices, are you? There's no need for that."

“Mr. Zhou, you’re overthinking it. Go ahead and ask. I haven’t planned to talk to Baidu yet,” Yu Xing said calmly. “There’s no need to speculate like that.”

Zhou Hongyi readily agreed, "Okay, I'll go ask."

Although he had a grudge against Baidu, it wasn't impossible for him to communicate with them. He immediately went to inquire about the situation with Baidu and the information he received was almost identical.

Subsequently, Zhou Hongyi called President Yu again to express her distrust: "President Yu, let's be frank first, LeEco will not buy Master Key. It's just that I always felt uncomfortable when you mentioned LeEco."

He avoided internal conflict and went straight to the root of the problem.

"I don't know if LeEco will actually buy it. We haven't talked about it yet, but Baidu is quite interested." Yu Xing wasn't surprised by Zhou Hongyi's reaction. "President Zhou, since you said to be cautious first, let's not bring up our past relationship on WeChat. Let's just do what we need to do. You've been thinking about this for a long time. If we can talk, we'll come to Hong Kong to talk. If we can't, then let Baidu come over to talk."

Zhou Hongyi believes that there are not many buyers for Universal Key on the market, and Baidu's actual motivation may not be that great, while 360 ​​has invested a lot of resources in projects such as WiFi sharing.

When his attempts to deflect the issue failed, and hearing Mr. Yu's demands again, which, despite their apparent pressure to close the deal, finally turned his determination to enter the short video market into action. He assembled his team, headed straight to Lingang, and demanded a refund on the spot.

(End of this chapter)