Tech startup: I really do make mobile phones!

Chapter 115 Strategic Shareholding Nietzsche
In the conference room at Nietzsche's headquarters, Jiang Yongde, along with General Manager He and his assistant, entered from the left side of the long table.

On the right side of the long table, Chen Mo, standing next to Lu Laowu, raised his eyes and chuckled, while Lin Junfeng opened his laptop, the cold light of the screen reflecting off his frameless glasses.

Upon seeing Chen Mo from Orange Technology, Jiang Yongde suddenly kicked over a chair and roared, "You surnamed Lu! You've let a wolf into the house!"

"Damn it, this is still better than you taking advantage of my misfortune!" Old Lu was so angry that he spat on the face of Boss He from Duowei, which drew a look of disgust from the other party.

Chen Mo stood to the side, turning a disposable paper cup as he watched from the sidelines. Through the gaps in the conference room's blinds, he could see a storm raging outside, with thunder and lightning.

I had imagined that the misty, rainy Jiangnan region during the plum rain season would be filled with beautiful women speaking soft Wu dialect, but who would have thought that Yingtian in July would be so irritable.

The beautiful woman Zhao Tiezhu mentioned has run off with the money, so all I can do here is listen to two rude coal bosses arguing.

Mr. He wiped his face with a wet tissue, casually tossed it into the crystal ashtray, and slammed Preda's briefcase onto the table. Rainwater seeped through the crocodile skin, and the conference room suddenly fell silent.

Catch the thief first to catch the king.

"President Chen!" He looked at Chen Mo with icy eyes: "If you Orange are going to play these little tricks, why don't you just show your cards directly?"

It's obvious that President He misunderstood. The scene where Lu Laowu and Jiang Yongde were fighting on the spot was not at Chen Mo's behest.

Of course, Lu Laowu's confidence stemmed from Chen Mo, a fact he did not deny.

"Ha! Mr. He, you speak so frankly, that suits me just fine!" Chen Mo gestured for Lin Junfeng to unfold the offer, taking the initiative: "Orange's first offer is 19 billion, with an investment of 6.346 million, to acquire 33.4% of Nietzsche's equity."

Lin Junfeng gave Nietzsche's comprehensive valuation range as 19 to 29 billion, which indicates that its net fixed assets are at least 19 billion.

Chen Mo has 8.5 million yuan in funds as an "ammunition depot," while Lei Jun's side of the capital can pledge 10% of Yuancheng shares, about 0.5 million yuan, as a "reserve ammunition depot."

His bottom line is to acquire Nietzsche's direct-sales channel for 9 million yuan; anything more than that would not be worthwhile.

After all, with just 9 million yuan in cash, Orange Technology could emulate Nicholas's approach of purchasing stores and open 600 to 800 self-operated Orange mobile phone stores.

Of course, the time and manpower costs of channel development are not included.

Orange reported a bid of 6.346 million, which means that subsequent bids for Duowei cannot be less than this amount.

With a cold laugh, Mr. He tossed a folder out of his briefcase, the metal back nails scraping against the conference table with a series of sharp sounds.

"Duowei 20 billion!"

He chose to compete with Chen Mo at the preset share of 33.4% for oranges.

The young people lacked martial ethics, and Nietzsche didn't even have a host, which was too unprofessional. Duowei suffered a setback right from the start, as Chengzi seized the initiative with the pre-set quota. How much quota their own ammunition arsenal could support needed to be calculated on the spot.

"Dovie offered 20 billion yuan, but actually invested 6.680 million yuan to acquire 33.4% of Nietzsche's shares," Mr. He's assistant added slowly after completing the calculation.

Amidst the bidding from the two companies in the first round, Lu Laowu loosened his tie, while Jiang Yongde clenched his fists.
Whether Orange or Dovi wins today, one of them will be eliminated from Nietzsche.

The first round of bids has been revealed: Orange's bid is 19 billion yuan, while Duowei's bid is 20 billion yuan.

The current price increase is 1 million, which clearly shows they're not serious yet.

There wasn't even a moderator at the Nietzsche event, so Lin Junfeng stepped in to break the deadlock: "Now we'll begin the second round of bidding. Does Orange Technology have any more offers to make?"

This is blatant favoritism and has no shame whatsoever. The hosts are all Chengzi's people, and Jiang Yongde is staring intently at that bastard Lu Laowu.

“21 billion!” Chen Mo looked directly into President He’s cold eyes and pushed the supplementary agreement over: “Additional terms: OEM manufacturing + extended payment period of 30 days.”

Mr. He stared at the two clauses, "OEM manufacturing" and "deferred payment period," and his pupils instantly contracted.

Immediately afterwards, he crumpled the two sheets of paper in the folder into a ball, flung the price list out, and sent it flying through the air with a sharp whistling sound.

"23 million!"

Lu Laowu's Adam's apple bobbed as he silently calculated how much the price had increased with each round of bidding: 6.346 million → 6.680 million → 7.014 million → 7.682 million. Each of these amounts represented his entire year's profit when the coal mine had relaxed price controls!

The second round of bids has been revealed: Orange 21 billion vs. Duowei 23 billion.

Duowei's plan was clearly disrupted by Orange's supplementary agreement, with the price increase jumping to 2 million, and tensions between the two sides were starting to rise.

"Let's begin the third round of bidding!" Lin Junfeng looked at Chen Mo and raised his hand: "Does Orange Technology want to make an offer?"

"The third round, 26 billion!" Chen Mo's voice shattered the suffocating atmosphere in the conference room. He pointed a pistol at the other party and fired a shot: "Mr. He! It's your turn!"

Lin Junfeng turned his laptop around at the opportune moment, revealing a personal account balance of 8.5 million, which stung President He's eyes.

Their confidence suggests they have backup plans.

Sweat beaded on Mr. He's forehead as he calculated that his own ammunition reserves were insufficient to make an offer, and then he shook his head slightly at Mr. He.

"Goodbye!" Mr. He suddenly stood up, causing the quotation documents in the Duowei folder to scatter all over the floor.

Chen Mo glanced at it and saw that Duowei's bottom price was 24.5 billion, which was a bit too high. He would find an opportunity to squeeze it out of Nietzsche later.

He picked up his briefcase and left the conference room with his assistant without looking back.

"Mr. He! Mr. He!" Jiang Yongde cried out in despair, his face ashen as he slumped into a chair, watching helplessly as Mr. He's figure disappeared behind the gilded door frame, as if he saw the coffin lid of his TV shopping empire being nailed shut.

"The third round of bidding is over!" Lin Junfeng smiled and looked at Chen Mo, announcing loudly, "I hereby declare that Orange Technology has won this acquisition battle with a bid of 26 billion!"

"You surnamed Jiang!" Lu Laowu stepped onto a chair and then onto the conference table, shouting hoarsely, "Are you going to get out of here on your own, or do you want me to take you?"

Jiang Yongde reached out with trembling hands to touch the cigar box, but Lin Junfeng pressed his wrist down.

At that moment, a "Withdrawal Agreement" slid up to his eyes, on which it read:

Nietzsche's estimated value: 26 billion.

Jiang Yongde holds 32.63% of the shares, which can be cashed out at 8.4838 million yuan.

Redemption Terms:

1. Private equity firms take over within 12 months.

2. Any overdue amount shall be made up by the remaining shareholders.

The former king of TV shopping took one last look at the "Nietzsche" logo he had personally written on the conference room wall. The slightly dark ink dot left by his pen when he signed it seemed to mark the end of his business career.

This also foreshadows a brand new future for Nietzsche.

Jiang Yongde was filled with resentment but had no choice.

Back when we all retired from the entertainment industry, why is it that Lu Laowu, that "big fool," has a booming real estate business while his TV shopping business is declining?

As a result, he trapped himself by allowing Xiaoli and Lao Wang to collude and abscond with the money. Not only did he fail to acquire Lu Laowu's 1200 stores, he also lost his own TV shopping channel.

In terms of shareholding structure, Chen Mo and Lu Laowu hold 33.4% and 33.97% of the shares respectively, totaling 67.37%.

According to the current articles of association of my country's Company Law, the two individuals have firmly grasped the dominant power in the company's major decisions and daily operations.

In contrast, Jiang Yongde's shareholding ratio does not grant him veto power, and he is unlikely to be able to compete with the two in business negotiations. If he continues to hold shares, he may not only be squeezed out by the other party through business means, but he may also end up not receiving a single penny.

It's wise for the shrewd person to concede defeat, cash out, and leave the game now.

After Jiang Yongde left, Lin Junfeng created a simple baseline diagram of Nietzsche Technology's equity restructuring and projected the new equity structure onto the screen:

Overall company valuation: 26 billion yuan
Shareholder structure
Lu Laowu: 33.97% shareholding (originally 51% after dilution), corresponding valuation: RMB 8.8322 million.

Orange Technology: 33.40% shareholding (acquired through a cash injection of 8.684 million yuan), corresponding valuation: 8.684 million yuan.

Equity pool to be disposed of: Sourced from Jiang Yongde's divested shares, representing 32.63% of the total shares, with a corresponding valuation of RMB 8.4838 million. (Disposal terms: to be taken over by private equity within 12 months; otherwise, Chen Mo and Lu Laowu will replenish the shares according to their shareholding ratios.)
After Lin Junfeng clearly defined Nietzsche's shareholding ratio in a visual way, Chen Mo invested 8.684 million yuan to secure a second stable distribution channel for Orange Mobile.

As the downpour subsided, the blinds in the conference room at Nietzsche's headquarters were swished open.

Lu Laowu rubbed his hands together and pointed to the closed flagship store downstairs.

"Don't worry, Mr. Chen. Once the funds are in place, all 800 stores will be open within three days. Half of the remaining 400 stores will be reserved for Orange's storefront renovations!" He lowered his voice, his Adam's apple bobbing. "Orange will only charge 15% for its distribution channels. Is that acceptable to you?"

Chen Mo tapped his knuckles on the window frame, his eyes fixed on the people passing by below.

"no problem!"

The usual practice for mobile phones entering the direct-sale store channel is a 30% commission, and Orange's strong channel in North China even requires 35%. 15% is already the bottom line, after all, store operation also requires costs.

As the citizens walked by, they would occasionally glance at the dazzling green signboard of Nietzsche's shop.

"What about your TV shopping channels?" Chen Mo asked, seemingly casually.

"It'll be popular for at least another two years!" Lu Laowu hurriedly rummaged through the documents on the conference table and handed over a set of data: "Last month, Nietzsche shipped 28 units through TV shopping! You can send us a recording of your segment in Shenzhen, and it can be played on a loop. Nietzsche will provide landline customer service, and the channel fee will still be 15%."

Lu Laowu understood perfectly that Nietzsche needed to demonstrate his value to the orange before Chen Mo would be willing to go to great lengths to pull it out of the pit. "Regarding the recording, I'll have Zhao Tiezhu contact you later."

As Chen Mo turned to leave with Lin Junfeng, Lu Laowu suddenly raised his hand.

"Mr. Chen! Please wait a moment!"

Chen Mo frowned and suddenly turned around to stare at Lu Laowu.

He didn't say anything, but raised an eyebrow at Lu Laowu: "Is there anything else, Mr. Lu?", which made Lu Laowu's neck tingle.

Lin Junfeng, the elite lawyer, stopped behind him. The reflection in his glasses accentuated Chen Mo's imposing aura.

Lu Laowu's palms involuntarily broke out in a light sweat as he forced himself to endure the uncomfortable feeling of oppression.

"Mr. Chen! There are still two million sets of spare parts in the Shenzhen OEM warehouse. The guys over there are waiting to get paid!"

Chen Mo pinched his fingers together before speaking: "It depends on the quality of your spare parts!"

“I heard that you bought acid-washed parts. If you clear out the mid-range goods through strong channels in North China and buy them back at 30% of the market price, you can get 30 million back.”

Lu Laowu's pupils suddenly contracted - this 30 million was not just a repayment, but also a way to clear out inventory by leveraging the connections of the other party, a powerful local figure in Shenzhen and North China, and at least save Nietzsche's OEM factory.

Nietzsche was ripped off back then, buying acid-washed parts for 1.8 million yuan at the price of brand new spare parts. Now they're worth only 3000 million yuan, which is more than a drastic price reduction.

There was nothing he could do about it; Lu Laowu still had to thank Chen Mo, since he had no way to sell such a large batch of goods in North China.

Orange, acting as a middleman, always leaves some profit for himself; this is considered an unspoken rule in the business world.

"President Lu! From now on, prioritize Nietzsche for all OEM orders for Orange and the 'X' machine!" Chen Mo took a half-step closer: "But from now on, Nietzsche's new machines will only have their labels attached; the R&D and production will be handled by Orange!"

He planned to have a backup plan while Nietzsche was still recovering: by putting Nietzsche's overall design, parts configuration, supply chain, and system in Orange's hands, he would essentially have Nietzsche by the neck and could shut it down at any time.

“It should be paid! It must be paid!” Old Lu nodded vigorously.

The setback that Lao Wang suffered with his self-developed Nietzsche N5 three-crystal shell-changing machine still leaves him with lingering fear.

Okay! This is going to be interesting. Nietzsche has its own mobile phone brand and its own contract manufacturers, but... it doesn't directly manufacture mobile phones for its own brand.

Nietzsche places the order → Orange branding → Nietzsche outsources manufacturing → Orange ships the goods → Nietzsche labels the goods.

It seems much more complicated, but in reality, Orange not only has to suck blood, but also has to grasp Nietzsche's Achilles' heel.

Nietzsche's major shareholder has always been Lu Laowu, and we must take advantage of his weakness to tighten his leash.

"We'll take our leave now, Mr. Lu!"

"I'll send you off!"

As the elevator doors closed, Lu Laowu's face turned pale, and he leaned against the wall, exhausted.

Although Nietzsche survived a great ordeal, he became a puppet of the orange.

Jiang Yongde suffered a crushing defeat, but standing on the side of the victors, isn't he also experiencing a kind of failure now?
There's no such thing as a sugarcane that's sweet at both ends.
Nietzsche chose to let the orange save his life, so he had to hand over his lifeline as a pledge of loyalty.

"Ding dong!"

Lu Laowu's 8847 titanium alloy phone lit up, and Orange Technology's first batch of 5 million yuan in funding arrived.

He suddenly perked up and immediately called Nietzsche's headquarters to gather core employees to get the stalled management team back to work and then revitalize the entire company.

5 million is just enough to help Nietzsche resume work as a whole.

Lu Laowu is not completely destitute now; he still has a chance to make a comeback. Besides, his precious daughter is still "starving" in North America, so he, the old man, cannot afford to be decadent.

The five-star hotel's shuttle van arrived, and the driver, wearing white gloves, opened the car door for the two of them, after which they took their seats.

Lin Junfeng sat next to Chen Mo, listening to Chen Mo make a phone call to Lei Jun.

"Mr. Lei, about the matter of pledging 10% of Yuancheng's shares to borrow money that we discussed before?" Chen Mo asked.

Lei Jun laughed: "President Chen, you're quick on the uptake! You've got Nietzsche?"

"Don't even mention it!" Chen Mo said helplessly, "The acquisition went through, but we also offended Mr. He from Duowei. There's a lot going on, so it's better to have some cash on hand for peace of mind."

What wasn't said was—that Lu Laowu isn't as honest as he seems on the surface.

Try it. If Orange Technology shows even the slightest weakness, Nietzsche will have a chance to turn against them.
Therefore, Orange needs to have a lot of money in his account to feel at ease.

“Okay, I’ll talk to Lao Xu and speed up the process for you!” Rebus paused, then suddenly changed the subject: “By the way, Mr. Chen, I have something I’d like to ask you for a favor.”

Chen Mo raised an eyebrow: "Mr. Lei, you're too kind. Please go ahead."

He said it, but he didn't say he would definitely agree; he was just being polite and saying he would do what he could.

"Do you know Lu Qingyue, the Executive Director of Morgan Stanley Asia Pacific TMT Group?" Lei Jun asked tentatively. "Could you introduce me to him?"

Chen Mo paused, somewhat surprised, as this wasn't a big deal.

"I do know Lu Qingyue, and she can pass on the message for you. But what does President Lei want with her?"

There was a two-second silence on the other end of the phone, then Lei Jun lowered his voice.

"To be honest, I'd like to use my connections at Morgan Stanley to make a connection and meet with the powerful VP of the Asia-Pacific region of the Bank of America." Lei Jun lowered his voice even further: "This is a roundabout way of doing things, and I don't want Fantasy to know about it. I'll have to rely on entirely new connections to make the connection."

This is interesting -- Fantasy just announced that it was abandoning its self-developed music machine system, fully siding with AnAn Table, and even becoming an ally of GaoKong.

The "selling point" of being the first domestically produced high-barrel chip is now a card exclusively for fantasy.

Logically speaking, if President Liu has his fantasy, then Xiaomai will follow suit.

But Lei Jun was not willing to let Xiao Mai be a follower of Fantasy.

In his previous life, his social circle almost completely overlapped with that of the imagined CEO Liu. He had no choice but to wait until he himself became incompetent and Qualcomm sought new allies before he could start pushing into the high-end market. But in this life...
High-capacity chip + gaseous lithium battery = enhanced version of Wheat 1? ??

Here's a fact that most people don't know: the initial positioning of Wheat and Meizu was the same – both focused on performance.

One is called "Born for enthusiasts" and the other is called "Geek Spirit." They are essentially smartphones that pursue performance, so there is no such thing as cost-effectiveness.

Based on Lei Jun's current assessment of Xiao Mai, he might actually... well, right? Of course, he still respects President Liu.

Business is business, but personal relationships are about recognizing each other.

The new players in the domestic smartphone market are getting more and more interesting; things won't be boring anymore.

“Okay!” Chen Mo raised an eyebrow and replied, “I’ve got it. I’ll get in touch with them for you later.”

Even if Lei Zong had just lent him money, Chen Mo would still have to lend a hand if Lei Zong wanted to poach talent from Fantasy.

I imagine you always brag about being the boss!

Before the enemy even attacked, he tripped and fell, and started yelling that he wanted to surrender. He's not even as good as wheat!
At least in later generations, wheat was voted for by Chrysanthemum in all three rounds of voting for 5G, and relations with Gaotong soured, and the promised first chip was given to Lexi.

Unlike a seasoned player like Fantasy, who throws a high bucket in the first round, a chrysanthemum in the second, and then forfeits in the third.
Good grief, a global company based in China? Are you kidding me?

"Thank you, Mr. Chen!" Lei Jun laughed heartily. "Then I won't keep you any longer. I'll follow up on the procedures immediately."

Chen Mo hung up the phone.

Lin Junfeng frowned: "President Chen, the remaining payment of 3.684 million for the acquisition of Nietzsche's 33.4% stake is 3.5 million in the account, only 1840 million is short. This shortfall can be covered by a short-term loan or by holding the accounts payable for a few days. Why pledge the shares and pay interest?"

Chen Mo rubbed his temples and looked out the window, passing by a vegetable market.

“Brother Lin, the money in my company’s account has various uses. We need to keep at least 30 million as a safety net so that operations can be stable next month. Right now, orange promotion, production, and distribution are all burning through cash. I can’t sleep if we don’t have enough cash in the account.”

The cash flow crisis that Orange experienced in its second week of release taught Chen Mo a good lesson: the money in the cash pool is the company's lifeline, meant to save the company in critical moments, and cannot be withdrawn and spent recklessly.

He paused for a moment: "Just like having surplus rice in the rice jar at home, even if you have to pay a little more interest, it's worth it to borrow money and keep it safe."

Lin Junfeng nodded: "I understand. You're trying to create a financial safety net for Chengzi. Cash is king, and it's always good to be prepared."

Chen Mo hummed in agreement, and the car continued towards the hotel.

Orange Technology currently has monthly revenue of around 10 billion yuan, but its debt is as high as 73 million yuan. (The debt-to-asset ratio is 7.3%, far exceeding the healthy threshold of 50% for most mobile phone manufacturers.)
In addition, the absolute control of Yuancheng requires a large initial investment and a long payback period, and the strategic shareholding in Nietzsche results in an excessive one-time capital investment.

It is essential for Orange to keep a large amount of cash in its accounts as a cash pool (funding pad) to buffer revenue fluctuations and supply chain disruption risks.

(End of this chapter)