Huayu: From charlatan to great entertainer

Chapter 471 Xiao Liu: What if I traveled back to when I was 15?

The straight-line distance from Sixth Avenue to Wall Street is less than 5 kilometers, but traffic is quite congested when passing through Broadway and Church Street.

Especially during the evening rush hour, nearly 10 employees throng the streets, and the financial district in the twilight resembles a golden beehive that never goes out.

At the intersection of Church Street and Broadway, between the changing traffic lights, a dense crowd of people in black suits poured out from the nearby Morgan Stanley Building and Goldman Sachs headquarters, their briefcases and cell phones reflecting the cold metallic light of the setting sun.

Taxis lined up in the middle of the road, their meters ticking faster than the Dow Jones Industrial Average.

After winding their way through several turns, Boss Lu's convoy arrived at a relatively secluded location, the low-profile base of the major short seller.

The bodyguard team guarded the exits and main passages. Afei accompanied him to the trading room, where they were greeted by Paulson's hearty laughter.

"Lu! You should have come earlier! Do you know how much you made this afternoon?!"

You should say "we," not "you."

Paulson's smile widened; he liked the Chinese director's humor, a quality he didn't often find in other Asian people he knew.

The two sat down on a simple sofa in the trading room. Lu Kuan politely declined his coffee, but the latter raised an eyebrow helplessly and made himself a cup of instant coffee.

Even now, with a net worth of billions of dollars, Paulson still prefers instant coffee.

This is similar to his CDS operations; the seemingly simple structure can extract the maximum profit.

Boss Lu laughed and said, "Actually, I know the current situation even without you telling me. Just look at the faces of the Goldman Sachs, Lehman Brothers, and Merrill Lynch employees through the car window when I came here, and I'll know."

Paulson was disappointed that he had been deprived of the opportunity to report the good news: "Lou, you're amazing. I still don't know why you were more certain than I was back then."

Boss Lu joked with him, "Do you know about Taoism in China?"

“I know! There were Chinese people in the community where I grew up who did this, and I could hardly look them in the eye!”

Lu Kuan smiled and nodded: "Yes, you're right. We should always be in awe of the unknown."

"In a way, all of this is a revelation from religion that I have to believe in. Just like the opening ceremony of this Olympics, even the world's most cutting-edge technology couldn't stop it from raining that day—"

"But what happened? We went to pay our respects to a Chinese goddess, and she kept the rain away."

Paulson was somewhat dazed, unwilling and afraid to believe it, but he couldn't understand why such a wealthy man and an artist who had just been interviewed by Time magazine would lie to him.

The short seller smacked his lips: "Now that you mention it, I'm thinking of going to China after I finish this deal."

"Come on in, I'll treat you to some good food and drinks." After a few jokes, Boss Lu got down to business: "Paulson, I'd like to withdraw some of my profits now. Is that easy to do?"

"Why is it like this again!"

The short seller was somewhat helpless. He really didn't have time to deal with so many ordinary clients. However, because he had cooperated with Netflix on a strategic basis, he was very dissatisfied with the young tycoon's "spendthrift" behavior!
Even if it wasn't his money, his obsessive-compulsive disorder couldn't bear to see his predetermined gains disrupted and ultimately reduced by a chaotic plan.

Earning less is even more frustrating than losing a lot!

“Lu, last time you bought Netflix, you mortgaged it to get a loan of 35 billion.”

"Do you know how much the CDS price went up after your account was partially frozen? You lost at least 3 to 4 million!"

The dedicated short seller confidently declared: "Today, Lehman Brothers has fallen below $7, shrinking by 95% since the beginning of the year. Merrill Lynch is in talks with Bank of America about an acquisition, and AIG's credit rating has been downgraded to A- by S&P. We are just before the big harvest, so we absolutely must not cash out prematurely!"

Lu Kuan looked at him amusedly: "Don't rush! I'm just asking first."

"How much has my account's total profit grown to now?"

Paulson lowered his voice slightly: "The large account is around 40 billion, and the small account is less than 10 billion. As long as you can wait until the end of the year, I expect the total return to be around 60 billion!"

Boss Lu nodded, frowning as he pondered something.

In his previous strategy, in order to expand his gains and acquire the streaming company that would become the world's most valuable company in the future, he mortgaged the then-hot subprime mortgage contracts to Goldman Sachs in exchange for the funds to launch a surprise attack on Hastings.

The tricky part is that the $35 billion obtained by pledging CDS was used for Netflix's full acquisition, including debt, but the assets that were pledged again could not be reasonably valued.

This is due to the market's downward revision of industry expectations following the bankruptcy of traditional DVD rental companies such as Bestone.

At this time, Netflix's streaming strategy has not yet gained market recognition, and it is currently making necessary technological preparations and accumulating original drama scripts. It is not yet able to obtain a reasonable valuation.

In the previous life, Paulson's highest CDS yield was only 590%. Even if the $35 billion obtained from the initial mortgage for the Netflix acquisition were fully invested, it would be difficult to achieve a higher return on the initial $10 billion.

Even if, as Paulson stated, the two accounts receive a total of $60 billion in revenue at the end of the year, after deducting $35 billion for the Netflix acquisition and mortgage interest, the net proceeds would be less than $25 billion, and that would be the ideal scenario.

Of this $25 billion, there is also a highly confidential political donation, namely the small account Paulson mentioned, which is protection money. (Chapter 350)
In other words, the $10 billion that was initially scraped together by selling everything they owned, plus subsequent sporadic additions, ultimately resulted in a complete Netflix and around $15 billion in cash during the subprime mortgage crisis.

It wasn't that he didn't want to earn more, but under the circumstances at the time, he couldn't afford to invest more, and Netflix was a valuable American asset that he had no choice but to acquire.

Netflix is ​​a key channel for cultural export, the largest traffic pool for the future "three-screen integration" of movies, and the initial platform for developing big data algorithms.

The various rights, including the adaptation rights to "House of Cards" and "A Song of Ice and Fire" acquired at the beginning of Netflix's acquisition, are all laying the groundwork for future strategic development.

In a sense, the money that went through Paulson's channels, disguised in several ways, and entered the key person assigned by the haters without even knowing who the ultimate target was, was also the money for acquiring Netflix.

It can ensure that one's private property in America is "sacred and inviolable" in critical moments.

But now there is a very tricky problem:
Even if it's not until the end of the year, how will this 15 billion yuan in cash be secretly smuggled back into China?

The amount is too large.

Paulson looked at his hesitant expression with some helplessness. This wealthy man from the East really didn't treat money like money. Did he really want to cash out early?
"The road? I still think..."

"Wait a moment." Boss Lu breathed a sigh of relief: "Is there any way to transfer all or part of this 15 billion to the mainland or Hong Kong through financial channels?"

He can repay part of the loan secured by Netflix, and use the remainder as strategic capital for the North American company.

But now domestic cinema chains like Wenjie Cinema and Butian Pictures are eager to capitalize on this opportunity, and even DJI is eager to do so.

Paulson's expression faltered slightly: "It's not easy. In fact, you have to keep it a secret to safely transfer this money into your personal and corporate accounts."

"It is now almost foreseeable that a large portion of the American lower class will also be ruined by the financial crisis."

“Lu, considering your nationality, they will be very disgusted by your short-selling behavior of ‘profiteering from national crisis’ during the financial crisis. Even I have to consider the impact.”

Lu Kuan was well aware of this. Even if short selling was legal, given the US authorities' high sensitivity to the flow of Chinese capital, this was a Achilles' heel that he could not expose.

. . .

After discussing some confidential matters, Boss Lu left Paulson's place, where Anna Huang had already arrived at the hotel to wait for him.

She represented the company at an industry association meeting and was subsequently summoned for questioning, which was still conducted in the manner of discussing her alleged "absconding with funds."

Anna Huang is a senior legal expert.

In her previous life, she worked at Google until 2011 as Vice President and Legal Counsel, helping Google establish a privacy and copyright compliance system and handling the crisis of withdrawing from the Tokyo market.

For the next two years she served as Twitter’s legal counsel until 2013, when she joined the White House as Obama’s appointed Chief Privacy Officer.

When it comes to exploiting loopholes in US law, Huang Anna is currently the only person Boss Lu can trust and who is also capable of doing so.

However, she didn't know where the money came from, and even if she guessed, she wouldn't be foolish enough to say it aloud or ask about it.

"Mr. Lu, I've been considering this since I received your message a few days ago. We have several options, but we still need to conduct more in-depth feasibility studies."

"First, find Miramax or Lionsgate and make payments under trade terms under the guise of their film companies investing in your domestic film projects or purchasing scripts."

"Second, we invest directly in heavy asset projects such as cultural industrial parks in the mainland under the name of North American Wenjie, and you then use your connections there to extract funds."

"Third, inject funds to establish a domestic limited partnership fund to invest in cultural industry projects in China."

Lu Kuan sipped his coffee at the hotel, frowning as he pondered the pros and cons of several options.

When conducting such fund transfers, security is the primary consideration, followed by the rate of fund loss. Regardless of the method used to achieve the goal, fund losses, including taxes and fees, are unavoidable.

Payments under film trade agreements are the safest option, but for a massive sum of 15 billion, it is necessary to maximize the intellectual property valuation of the project and script in order to achieve overpayment.

Given the US foreign exchange controls, transactions under $3000 million are the safest bet, but too many transactions would make it difficult to conceal the transaction.

If you want safety, invest in live-action films. Although the loss rate is high, it is relatively safe. After all, the phrase "art is priceless" can be used to refute many rules and regulations regarding premium valuation, which is also the choice of most funds.

The second option is actually the most convenient. As long as it involves real estate projects with land and infrastructure, it has the highest capital utilization efficiency and can be settled in one or two payments.

However, he had to risk communicating with domestic departments about "selling dog meat under the guise of mutton," since this was a purely arbitrage activity, and even if Leader Liu could help, the policy risks were too great.

"A limited partnership fund, perhaps!" Mr. Lu sighed deeply. In fact, this was the earliest plan he had researched.

Qualified Foreign Limited Partner (QFLP) funds are currently the most accepted form of overseas investment in China under domestic policies.

Even so, a domestic entity (SPV) must be set up in Hong Kong because the cinema industry has strict restrictions on foreign investment.

Although the money belonged to Lu Kuan, he must have disguised it under the guise of foreign investment.

Anna Huang is well-versed in the business: "Limited partnership funds are fairly standard. The capital loss rate is slightly better than that of investments under trade, but the convenience is slightly worse than that of investments in the cultural industry."

“Every penny counts, and domestic construction can’t wait.” Lu Kuan pondered for a few seconds: “Use this newly established QFLP through the Hong Kong SPV to sign a performance-based agreement with Wenjie or its non-sensitive subsidiaries.”

"Both parties agreed that the deadline would be around 2011-2012. If Wenjie or the target company failed to complete the listing by then, they would have to repurchase the shares with the principal and an annualized interest rate of 8%."

Huang Anna's eyes lit up: "President Lu, that's a great idea!"

"If there is a shortage of funds in China at that time, we can keep dragging it out, or we can just announce that we will not go public, pay off three or five hundred million yuan and leave the rest as bad debts."

"If there's a shortage of funds overseas at that time, this money can legitimately flow back to North America! I'll go and refine the details!"

Lu Kuan said helplessly, "There are risks too." Huang Anna was well aware of this: "The only risk is that with this limited partnership fund, whether you are the GP or LP, if the US authorities investigate thoroughly, you will face regulatory scrutiny regarding self-circulating capital injections, and in serious cases, you may be accused of transferring assets."

GP stands for General Partner, and LP stands for Limited Partner.

In a typical investment fund, a well-funded asset management company would act as the general partner (GP), and an individual would act as the limited partner (LP).

However, this kind of investment is essentially a transfer of funds between Mr. Lu's own hands. He must maintain absolute shareholding and decision-making power. Even if he acts as a limited partner (LP) and finds a de facto general partner (GP), he must strictly limit core matters such as investment direction and profit distribution through terms and conditions.

But no matter which one it is, even if he adds several layers of cover in addition to his LP identity, it is not 100% safe.

Both China and the US have "Ultimate Beneficiary Declarations" when filing QFLP investments. If we really want to get to the bottom of things and trace Lu Kuan to him through offshore companies, it is entirely possible to intervene through forceful administrative means.

He's not too worried about his family, but what about the US side in the future?
Once the honeymoon is over, harsh winds and swords will come, and it's uncertain whether the Black Sea will be able to ferry me to the other side.

Anna Huang tentatively suggested, "Should we still ask Miss Liu's mother to be the wife?"

"Forget it, the risk is too great. Besides, I'm getting married to Xiao Liu soon, so this won't achieve the so-called effect of keeping things a secret. Instead, it will expose her position on Twitter."

While Liu Xiaoli is indeed the current de facto controller, she is also the de facto controller after various "face-changing" maneuvers, and is relatively safe under the circumstances of geopolitical harmony.

Lu Kuan pondered for a long time. All the preparations that could be made, even the "Black Sea Plan" had been fulfilled several times, and with the protection of his status as a world citizen, this was all he could do.

"Should we put it in the previous gunman fund? Emil's mother can help find an asset management company."

"No need. Gunner Fund's holdings in Xinlang will probably be revealed next year, and we can just cancel them then."

Huang Anna nodded: "What should the new fund be called? I'll register it as soon as possible and wait for your news at the end of the year."

Lu Kuan touched the ring on his hand: "Hmm... Donkey Fund, Little Donkey Fund."

"OK."

Huang Anna then remembered the phone call from China, and her expression became somewhat strange: "President Lu, Strong Dong from China called me."

"Who?"

“Liu Qiangdong,” Huang Anna explained, “He kept trying to speak English to me, and I couldn’t stand it anymore, so I started communicating in Chinese, but my Chinese isn’t very good either.”

Strong Dong...

This guy is such a show-off.

"I gave him the latest updates on Android and we agreed to stay in close contact."

Mr. Lu asked, "Android has generated a lot of buzz since Google announced it was open source last year. When will there be products that use it?"

"Next month, HTC, a manufacturer based in the Taiwan region, will launch the HTC Dream, which will be the world's first Android phone to hit the market. It will be equipped with the Android 1.0 system and have basic functions such as email and browser. The specific details will depend on market feedback."

Lu Kuan glanced at his watch and stood up: "Okay, then pay more attention to the pre-installation of Android systems on domestic platforms like Zhijie Video, Weibo, and the online store. Try to get it installed in the next 2.0 version."

"Ok, no problem."

The relationship between mobile phone operating systems and mobile phone manufacturers is close. Android's real rise to prominence came with the release of Samsung's Galaxy S series in 2010, and by the end of that year, its market share in North America officially surpassed that of iOS.

Two years ago, Mytube was sold, and Schmidt, representing Google, ultimately agreed to a $23 billion acquisition price.

Lu Kuan took $10 billion in cash to operate companies like Twitter and to introduce special effects technology. He then pledged shares of companies like Focus Media and handed them over to Paulson that year to establish a CDS fund.

The remaining $13 billion was converted into shares in Google and Android.

At Google's 2006 price of $450 per share, this "huge sum" would only represent less than 1% of the shares, with its only significance being future investment appreciation.

Therefore, Lu Kuan had an extra trick up his sleeve at the time, by including his shareholding in Android Company in the transaction terms of the contract.

Android was previously acquired by Google for $5000 million. In order to acquire Mytube, they had to agree to the demands of this Eastern director and traded 30% of the equity at a premium of up to $8000 million, which was the limit they could accept.

Mr. Lu then converted the remaining $10 billion into a controlling stake in Google.

All things considered, his shareholding in Android is approximately 31.06%.

In 2020, Android will become a core division of Google, accounting for more than 35% of its revenue.

At that time, it remains to be seen whether the latter will regret the deal he made with the Chinese youth.
-
Cai Guoqiang, Ma Wen, Lin Ying and others have lived in New York for a long time. After the dinner that night, the old comrades from the Olympics flew directly to Los Angeles the next day.

At noon, I invited Harvey and Disney's Iger to lunch to discuss matters, and also introduced them to Su Chang, who was already in North America filming "Inception".

The flight from New York to Los Angeles takes nearly five hours. While the husband was still in the air, the wife was entertaining her best friend and chatting about her experiences on the set of "Inception".

Su Chang was somewhat surprised and said, "I've always heard President Lu talk about the industrialization of Hollywood's film industry, but after experiencing it myself these past few days, I've really seen it for myself. It's indeed very professional!"

“Even when I was filming ‘You Are the Apple of My Eye’ and ‘Bad Genius’ with Director Xue, the crew would issue a call sheet as required, but their call sheets were accurate to within 5 minutes.”

"I glanced at the stuntman's name tag yesterday, and it even had his workers' compensation insurance number on it!"

Liu Yifei sat on the sofa reading a novel, chatting idly with her: "I only found out about it when I was reading 'Alien Land,' because I was also a stand-in back then!"

"The Screen Actors Guild mandates that lead actors and stunt doubles purchase workers' compensation insurance, or they will face penalties and lawsuits. The purpose of the employee badges is to allow for quick access to medical records at the hospital in case of an accident."

"Because if a stunt double gets into an accident, it can be fatal; it usually requires emergency medical attention."

"Coming out here has really broadened my horizons. Mr. Lu is right, there are things we should learn." Su Chang said sincerely. She is considered one of the new generation of Chinese actresses who has gone abroad.

Not counting the early, low-quality works by Bai Ling, Chen Chong, Yu Feihong, and others.

Starting with Gong Li, then Zhang Ziyi, Liu Yifei, Yang Mi from "The Forbidden Kingdom," and now Su Chang, who has solidified her position as a rising star thanks to "Magic Phone" in the first half of the year.

The TV series "Magic Mobile Phone" was a hit on CCTV in April, achieving a peak single-episode rating of 5.76% and an average rating of 4%, setting a new record for CCTV-4's ratings in 2008.

"Silly Girl" has become a new nickname for Su Chang's fans, following her classic roles such as Shen Jiayi, Tian Ling'er, and Xiao Yu.

Su Chang, still buzzing with excitement from her recent experience working on a Hollywood film set, chatted with her best friend, "And also! Leonardo DiCaprio is so handsome!"

"That day, during that scene, he emerged from the water wearing a suit. I watched it from behind the monitor, and his eyes looked like frozen Lake Michigan!"

She talked to herself for a while, then poked Xiao Liu with her finger in annoyance: "Why aren't you talking to anyone! You're talking about handsome guys!"

"Who?"

"Little Li!"

Liu Yifei pursed her lips: "Oh, it's just so-so, much worse than Lu Kuan."

After a while, he looked up again and added, "Leonardo is handsome, like a fine Western oil painting."

Su Chang curled her lip in mockery: "What about Boss Lu?"

Liu Yifei put down her novel and said matter-of-factly, "Lu Kuan is an extraordinary man! His appearance is his least noticeable advantage! There's no comparison."

"If you insist on making an analogy, then it is like the freehand landscape painting of China, with its ever-changing scenery. Once you step into it, you can never come out again."

Su Chang laughed and said, "It's all black and white, isn't it? You might as well say he's your giant panda."

"This is so boring!" Su Chang got up to pour herself some water. "There's nothing to talk about with a woman who's about to get married. You can't even accept anyone else in your heart now, wait—"

"You've never been tolerant of anyone else! It's like your life has been ruined by that washing machine!"

Su Chang leaned against the island counter and laughed, "Liu Yifei, you're getting married soon. Will you regret wasting your girlhood?"

"You need to think about it, you might never be able to get out of here again in your entire life."

Xiao Liu said seriously, "I want to travel back to when I was 15!"

"and then?"

"Then I'll tease and play with the washing machine, ruining all his good deeds! I'll make her unable to resist me! She'll fall head over heels for my long legs!"

"And then what? Kick him away?" Su Chang asked excitedly. "This plot could be written into a novel! Your 1600 million fans would definitely love it!"

"How about we call the novel 'The Playboy of the Entertainment Industry: How Did He Get Transformed by a Celestial Beauty?'?"

The youngest Berlin Film Festival Best Actress in history travels back 15 years and starts from scratch to renovate a washing machine. What a powerful female lead storyline!
If this were a female-oriented novel, she would immediately give it a gold reward and urge the author to update day and night.

Liu Yifei pondered for a few seconds, seemingly having nothing else to do, and thus abruptly ended the story after the first three chapters.

"And then... and then I just went for it! I couldn't resist! Hehe! Just experience it for yourself."

Su Chang: Damn it! Delete the book and refund my money!
Xiao Liu teased her best friend a little, then smiled and continued reading her novel.

Su Chang noticed her engrossed in the activity from the moment she entered. Curious, she glanced over, but seeing that it was all in English, she gave up.

"Is this 'Game of Thrones' really that interesting?"

Liu Yifei nodded: "It's alright. It's a script that North American Wenjie acquired. I heard it's going to be made into a Netflix original series. I saw Sun Wenwen reading it when I went to Twitter yesterday, so I brought it back to pass the time."

Martin, the author of Ice: Power, was originally a Hollywood screenwriter. After his script was severely criticized and he was frustrated, a scene appeared in his mind: "a direwolf was killed by a deer's antlers in the snow, and the wolf cub was adopted by a child." So he began to write.

The novel was first published in 1996, but in the previous life it was not acquired by HBO until the end of 2007, and it took three years to launch the related TV series.

In this life, when Netflix first acquired the novel, this fantasy novel, along with "House of Cards," was already in the hands of the time traveler.

Around noon, Mr. Lu returned to his Beverly Hills mansion. At the same time, Harvey and Egger were also invited. The two also had residences in the mansion and had been waiting for a long time.

A few laughs came from outside. Liu Yifei and Su Chang watched as Lu Kuan pushed open the door and entered, followed by the pot-bellied Harvey and the elegant Aiger.

(End of this chapter)