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Chapter 326 0323 [Rising Against the Market Trend]

During the company's listing period, it is not allowed to engage in speculation; there is a quiet period for 40 days after the listing.

This includes promoting the company's prospects and stock price expectations, as well as having executives give interviews discussing IPO details or business outlooks. These are all prohibited.

Information from the prospectus can only be disclosed to the media.

However, "compliant advertising" is also acceptable.

For example, financial media outlets could be asked to analyze the publicly available prospectus and provide a purely objective and neutral evaluation.

When the media proactively seeks interviews, you can passively confirm publicly available information. For example, if a reporter asks, "On page X of the prospectus, your revenue increased by 80%, is the data accurate?" you can answer, "Yes, it is." But you cannot provide any further explanation.

Alternatively, they could invite third-party experts to comment on industry trends in their reports, indirectly mentioning the company's name but not commenting on its IPO.

Alternatively, they could publish technical white papers or industry reports related to their business.

Chen Guiliang dared not act recklessly, so he directly asked underwriters such as Goldman Sachs to plan the operation.

In fact, Goldman Sachs had already started building momentum after the F-1 filing was made public; otherwise, how could they underwrite the stock?

The first person invited was O'Reilly, the originator of the Web 2.0 concept.

This guy made some careless remarks a few months ago, which severely damaged the lives of those in the industry, and incidentally, he also ruined his own career. Ever since he started making those remarks, Web 2.0 companies have had a hard time not only going public, but even securing venture capital.

O'Reilly readily accepted the invitation and went to a financial media outlet to discuss the development trends of Web 2.0.

He first discussed Yahoo's newly launched targeted advertising, and then said that Web 2.0 websites are naturally more suitable for this model than portal websites.

He also casually mentioned ByteDance, saying it was the world's first Web 2.0 company to adopt this model, resulting in a significant increase in advertising revenue. He stated that this was not against regulations because it was disclosed in ByteDance's prospectus.

Following this, a research report on China's Web 2.0 industry was released. It objectively and fairly described the development of Web 2.0 in China, and incidentally mentioned ByteDance's specific performance.

We also request that financial media outlets conduct a neutral analysis of ByteDance's prospectus.

We cannot hype things up or use inflammatory language; we must simply present the facts for investors to see.

everything's ready.

After discussions, Chen Guiliang, venture capital shareholders, and underwriters ultimately set ByteDance's offering price at $10.5.

This price is very low.

This year, Chinese internet companies that went public in the US priced their products at $16 each: Perfect World, Giant Interactive (listing in November), and China.com Software (listing in December).

It can be seen that the issue price was set lower and lower as time went on, because the overall economic environment deteriorated.

For a Web 2.0 company like Chen Guiliang's, the price needs to be set even lower.

The pricing meeting has concluded, and the product will be launched the following day.

Chen Guiliang dragged his tired body back to the hotel and casually picked up his phone to call Shi Yuzhu: "How much has the price increased over there?"

Shi Yuzhu was ecstatic: "The market just closed, and it surged 32% on its first day. We're quite destined to be listed around the same time. I also read your prospectus a couple of days ago. I wish you a phenomenal opening!"

"Thank you," Chen Guiliang said.

Giant Interactive went public on the New York Stock Exchange.

ByteDance will go public on Nasdaq in 2.

In fact, Chen Guiliang started preparing for the IPO much earlier than Shi Yuzhu. However, the nature of his company meant that the review process would inevitably be delayed, and every issue would be questioned repeatedly.

For profitable companies like Giant Interactive, compliance is the only requirement; they get the green light all the way.

Chinese media are already buzzing about the fact that Giant Interactive, ByteDance, and China.com Software will all go public before the end of the year.

After the F-1 filing is disclosed, it will be published on the SEC's website within 10 minutes, and Chinese financial media will soon be able to see the news.

China's financial experts were analyzing it there two weeks ago.

They are optimistic about Giant Interactive and China.com Software.

Giant Interactive, needless to say, makes a fortune in the gaming industry, and its listing in the United States is a boon to the American people.

China.com Software is a subsidiary of China.com, and its revenue reached $2.5 million last year. Its parent company, China.com, was the first Chinese internet company to be listed on NASDAQ.

Only ByteDance is not viewed favorably.

It's not that ByteDance is incompetent, but rather that the Web 2.0 model has cooled down. There were countless stories about Web 2.0 in the past, but none of the stories related to profitability materialized.

A Chinese financial expert predicted: "Chen Guiliang's roadshow may go unnoticed. If the underwriters bring in 10 investment institutions, 8 of them may back out. Even American Web 2.0 companies have had difficulty securing venture capital in recent months."

Some financial experts also predicted: "Even if ByteDance manages to go public, its stock price may fall below the offering price on the first day. Firstly, Web 2.0 is facing a downturn, and secondly, the overall environment of the US stock market is worrying. The combination of these two factors will have disastrous consequences. Chen Guiliang chose a very bad time... but he had no other choice. A company founded in 2004 could not possibly go public in 2006."

In any case, Chinese financial media are all pessimistic about ByteDance's IPO.

However, public opinion in the United States seems to have undergone a slight shift.

After O'Reilly explained that the precise advertising model is naturally more suitable for Web 2.0 websites, a large group of Web 2.0 entrepreneurs in the United States came out to promote it.

They all claimed that their websites were also developing precise advertising systems. This was an attempt to attract attention, boost investor confidence, and persuade venture capitalists to continue investing.

At this very moment, Facebook announced the official launch of its precision advertising system and actively promoted this model to advertisers.

Zuckerberg even held a press conference to detail Facebook's precise advertising model. He did this, of course, not to help Chen Guiliang, but to persuade his own advertisers.

The Web 2.0 concept, which had cooled off in the US for six months, has unexpectedly become popular again.

It seems that as long as this advertising model is adopted, all Web 2.0 websites can solve their profitability problems.

……

At 4 a.m. on the day of the IPO, the investment banks were finalizing the settlement.

Fortunately, no organization withdrew its orders at the last minute.

Giant Interactive's stock price surged 32% on its first day of trading yesterday, significantly boosting investor confidence in Chinese concept stocks amid widespread losses in the US stock market.

The collective hype surrounding the precision advertising model within the Web 2.0 industry also makes ByteDance appear more valuable for investment.

ByteDance issued 14.29 million shares this time, which, at an offering price of $10.5, equates to raising $1.5 million. This is about the middle level among Chinese companies that went public in the US in 2007.

In addition, there is a 15% greenshoe option. This is a must-have when the market is down; otherwise, underwriters will be unwilling to cooperate.

After the greenshoe option is exercised, Chen Guiliang will still hold 47.67% of the shares.

However, the voting rights of the employee stock option pool will be held by Chen Guiliang on his behalf for a period of time. This portion accounts for 9.87%.

In other words, Chen Guiliang effectively controlled 57.54% of the voting rights.

Judging from the founders' shareholding, it's almost a carbon copy of NetEase's IPO back then.

7:30 a.m.

The convoy arrived at the exchange.

Chen Guiliang led his team through a side entrance of the stock exchange to the place where the company was to ring the bell for its IPO.

Halfway there, Ao Yanchen whispered, "My hands are shaking."

Chen Guiliang laughed and said, "You are the heroine Ao, you can't be a slacker at crucial moments."

Ao Yanchen said, "Nervous. Or maybe excited."

Xie Yang said, "My legs are shaking."

No prospects!
Look how calm Guo Feng is.

Guo Feng even yawned; he hadn't slept well these past few days due to overwork.

The lawyer is reviewing Chen Guiliang's speech word by word to ensure it doesn't contain any suggestive or inflammatory content. So it's all just polite talk; there's not much to elaborate on.

In the investment bank control area, traders are frantically making phone calls; the opening price still hasn't been determined.

Chen Guiliang sat there with his eyes closed, waiting patiently for the bell to ring.

Xie Yang kept adjusting his tie, appearing anxious and restless.

Xie Saobang liked to wear suits in high school to make himself look mature and composed. But they were all old suits that his brother had worn, and they were too loose and didn't fit him well.

He was wearing a custom-made suit that fit him perfectly, but he still felt awkward in it.

Especially the tie, it's so tight.

He never wore a tie before. Suddenly, the underwriter's representative warned, "After the bell rings, just smile and wave; don't talk nonsense in front of the cameras. You Chinese have done that before! If you shout out any target share price and urge everyone to buy, you could go to jail!"

Xie Saobang's focus was always different. He stopped fussing over his tie and asked in English, which was even worse than Chen Guiliang's, "Who shouted that?"

The underwriter's representative ignored him.

nine in the morning.

Chen Guiliang led his team on a tour of the trading hall.

The traders lined up to applaud and congratulate, and Chen Guiliang took out a custom-made commemorative hat and threw it into the crowd, making the atmosphere even more joyful.

Inspired by this, ByteDance's senior management team finally calmed down.

Half past nine in the morning.

Chen Guiliang and Guo Feng held the wooden mallet together.

The moment the bell rang, numbers exploded on the giant screen in the trading hall.

The opening price was $11.3, a 7.6% increase over the offering price!

The exchange's expert brokers announced loudly: "ByteDance, opening price $11.3!"

The whole crowd cheered.

The entire team breathed a sigh of relief.

Lü Zhihui smiled and said, "It feels like a breath of spring in the dead of winter."

Chen Guiliang muttered, "He's still not as good as Shi Yuzhu. His stock rose 17.7% at the opening yesterday."

“We are, after all, a Web 2.0 company. The market has been falling, so it’s good that ByteDance’s stock price is rising,” said Lü Zhihui. “Foreign monks are better at chanting sutras, and this is also true for Americans. They think China is mysterious and have an inexplicable obsession with Chinese concept stocks. They don’t trust American companies now, but feel that Chinese companies are more worthwhile to invest in.”

Chen Guiliang led his team back to the lounge.

But no one had time to rest; they were constantly watching the stock price.

The underwriters have been keeping a close eye on the situation, and if the share price falls below the threshold, they will activate the greenshoe option to support the price.

The US stock market has been extremely volatile this month, with the Dow Jones Industrial Average frequently fluctuating by more than 2%. Enthusiasm in the morning could drive up stock prices, only to be followed by profit-taking in the afternoon, causing a pullback.

An underwriter representative told Chen Guiliang, "Short selling surged in September and October because market panic was spreading. Your listing now is actually a good time amidst the bad. The government has been implementing policies to rescue the market for several days, and short sellers are afraid of being squeezed out, so they dare not make large-scale moves."

Amidst the tense gazes of the crowd, around 10 a.m., a large influx of speculative buying drove ByteDance's stock price to $13.2, a 25.7% increase.

Before everyone could celebrate for long, the price suddenly plummeted to $11.5 near noon.

There are definitely institutions manipulating things behind the scenes, taking advantage of the morning's enthusiasm to short sell, then reaping profits and leaving in the afternoon, rarely lingering. It's become a routine.

The underwriters had already prepared a solution, allowing Chen Guiliang to make preparations in advance and urgently announce ByteDance's Q4 profit forecast.

The announcement of the expected increase in profits prompted some institutions that had been waiting for it to immediately buy in, driving up the stock price.

The stock closed at $12.6 in the afternoon, a 20% increase on its first day of trading.

"Damn, this is even more tiring than being a 'seven times a night' guy! My heart was pounding the whole time." Xie Yang was a little dazed when he left the exchange.

Chen Guiliang also breathed a sigh of relief: "Let's send a good news report back to the country."

On the way back to the hotel, Shi Yuzhu called: "Congratulations, congratulations!"

Chen Guiliang said, "Congratulations! I heard Giant's stock went up again today?"

Shi Yuzhu laughed and said, "Haha, the market has been falling, but Giant Interactive is able to rise against the trend. I estimate that ByteDance's stock price will continue to rise. Americans don't buy their own country's stocks, but instead they're eyeing our Chinese companies. No, wait, it's newly listed Chinese companies. The stock prices of previously listed Chinese companies are also falling."

Chen Guiliang remarked, "Baidu's stock price has been quite stable."

It's not just stable, it's skyrocketing!

While the US stock market is experiencing a sharp decline, Baidu's stock price has risen rapidly, remaining above $400 for several consecutive days. And it continues to rise.

Countless American stock market investors dare not buy shares in American companies, but instead are pouring money into Baidu.

Due to the phenomenal performance of Baidu's stock price, Baidu may even become the first Chinese company to be included in the Nasdaq 100.

ByteDance and Giant Interactive are in similar situations, both inexplicably benefiting from a poor environment, only their growth wasn't as dramatic as Baidu's.

The following day, ByteDance's closing price rose to $13.7.

At the same time, Baidu, Giant Interactive, Perfect World, and other companies also saw their stock prices rise.

This bizarre situation began when the Americans announced their market rescue policies. For some reason, they didn't really help American companies' stock prices, but instead helped a bunch of Chinese companies.

American stock market experts have begun analyzing this bizarre phenomenon.

But the more experts analyze, the more American investors buy Chinese stocks, as if Chinese stocks have become a safe haven.

No one expected this phenomenon.

Although Lü Zhihui ended his cooperation with ByteDance, he called again a few days later: "Sigh, I should have set the offering price higher. I discussed countless possible outcomes with the underwriters, but none of them could have predicted this situation."

"Aren't you really considering developing your career at my company?" Chen Guiliang extended the invitation again.

Lu Zhihui said, "Let's see how things go. If things don't work out in the future, we'll have to ask President Chen to take us in."

Chen Guiliang said, "You're welcome anytime."

Lu Zhihui felt that Chen Guiliang's company was too small and the annual salary was not enough.

After the subprime crisis broke out, he will probably start looking for a job.

ByteDance not only successfully went public, but its stock price also rose for a week. The news, when it reached China, astonished many experts.

They didn't quite understand.

Of course, what they understand even less is Baidu.

When Chen Guiliang returned to China, Baidu's stock price was already close to $430.

It's worth noting that Baidu went public two years ago with an offering price of only $27. At the end of last year and the beginning of this year, its stock price was only around $100.

How did it suddenly jump to $430?

It has risen by more than $30 in just one week!
Wasn't the overall environment for the US stock market bad? How come it's rising so ridiculously?
When Chen Guiliang landed at Shanghai Airport, all the venture capital managers from both the A and B rounds came to welcome him home.

Some financial media outlets, having received the news, pointed their cameras at Chen Guiliang at the arrival gate, saying, "Mr. Chen, look this way!"

Chen Guiliang smiled and made a "V" sign.

Based on ByteDance's current stock price, Chen Guiliang's net worth is now 10 billion... US dollars!
Of course, it will definitely fall after a while.

No matter how impressive the concepts behind Chinese concept stocks are, they cannot truly withstand a stock market crash.

But the others didn't know that; they only knew to calculate Chen Guiliang's assets using stock prices. They arrived at a figure of $10 billion, and were all shocked.

What a young super-rich man!

Many media outlets are now praising Chen Guiliang to the skies.

Even Guo Feng, who was a business partner, now has a net worth of more than $8700 million.

Many other employees who held stock options became millionaires.

The company currently has only about 300 employees, many of whom were hired within the last year. There are still some vacant stock options in the pool, reserved to reward high-performing employees in the future.

It's estimated that ByteDance's job openings will be extremely competitive next spring!

"Is that a Korean celebrity? There are so many reporters at the airport."

"You don't even know Chen Guiliang?"

"Who?"

"His company just went public, and he's worth a billion dollars! In US dollars!"

"How many?"

Near the arrival gate, many passersby were discussing the matter.

-

(You got the chapter about the college's founding ceremony wrong. The one who broke up with his girlfriend was roommate Jiang Junlai because she was going to America. Partner and shareholder Guo Feng graduated long ago.)
(End of this chapter)