How can you become a star without money?

Chapter 205 'The White Knight'

The questionable actions of the past few months have proven that Wu Kebo is definitely not a good CEO or leader; he is both reckless and greedy.

Of course, if Meishe doesn't have a scandal, their opinions will be reversed.

"Mr. Wu, is there an investor willing to invest?" Yang Zi asked, raising an eyebrow.

He just wants to get the money quickly, or assets that can be mortgaged for cash. Last month, he announced an investment of 2 million yuan to film "The White Snake". Now the production team is about to start preparations, but the company's accounts do not have enough start-up capital.

He's going to spend a fortune to get Jet Li to make the film. Getting him to do it requires throwing money at him. You'd have to put at least tens of millions in cash as a down payment for the film's fee in front of him to get him to agree. If he can't even come up with the down payment, the project is definitely going to fall through.

Moreover, it's not just a matter of projects failing. Juli has made a big splash since its inception, but if its first investment project fails, the company will probably go under as well.

More importantly, Huang Shengyi, this stupid woman, has become increasingly irrational since she became famous recently. She actually claimed that she wanted to participate in the company's operation and control its development path, otherwise she would threaten to divorce and divide the family property.

Facing crises in both his career and family life, he is now more anxious than anyone else.

Money really does give a hero courage. If the company had money in its accounts, he wouldn't be so intimidated in front of Huang Shengyi.

"I suppose so, but it's not a direct investment. Instead, I need everyone's cooperation to put on another show," Wu Kebo said with a smile.

"Acting? Mr. Wu wants to debut as an actor to pay off his debts?" Xu Chen couldn't help but chuckle.

“Of course not. Everyone knows about the 01 Fox Poison Pill Project, right?” Wu Kebo said.

Everyone perked up upon hearing this.

In 01, due to the impact of the first dot-com bubble, Sohu's stock price plummeted. Taking advantage of this, Jingda Jade Bird acquired a large number of shares and prepared to make a takeover bid for Sohu. However, Zhang Chaoyang launched the poison pill plan, directly increasing Jade Bird's acquisition cost several hundred times through internal share issuance at an extreme ratio of nearly 1:50, and finally successfully forced the acquirer to back down.

During the process, Zhang Chaoyang's decisiveness and methods as the decision-maker established his position as the core manager of Sohu. Although his equity was diluted significantly, he later stabilized his decision-making position by repurchasing shares at a low price.

Wu Kebo also wanted to follow suit.

"When the poison pill plan was launched, Sohu's stock price actually rose by 30% against the trend. Now that the stock price has fallen to rock bottom, we can use the poison pill plan for marketing and let shareholders see our determination to protect the company."

Besides, haven't people been complaining that I'm too controlling as CEO? After this share issuance, my shareholding will most likely be diluted. In the future, everyone can participate in company decisions, especially Mr. Xu. Meishe no longer has any business, so why not focus your energy on Chengtian?
After all, our cinema business is still profitable. Recently, the films "Lost in Thailand" and "The Gunman" have helped our cinemas achieve a box office revenue of over 10 million yuan for a consecutive week, firmly securing our position as the number one cinema chain in China.

"The offline one-day store manager program is quite effective," Wu Kebo said with a smile.

After the college entrance examination, Kanpianer.com launched a series of promotional activities, which directly boosted the performance of Chengtian Cinema. This greatly stimulated Wu Kebo and Morita Ryu's determination to keep Chengtian.

Although the stock price is currently depressed, putting aside the debt, the entire Chengtian Cinema chain model has great potential. As long as it can weather this difficult period, it will definitely be able to sit on the throne of China's number one cinema chain.

However, the investors behind Morita School were unwilling to spend money to help them through the crisis, and even threatened to launch a shareholders' meeting to remove Wu Kebo and then auction off the company if things were not handled properly.

Just when Wu Kebo was at his wit's end, an unexpected person found him.

Tan Hui of Xingmei Group, a well-known figure in Beijing, is a senior figure whom Wu Kebo would bow to, and many of his operations were based on Tan Hui's deeds.

Xingmei Entertainment is not only the second largest investor in China after Huayi/Bernard, but also a major partner of Huaying Xingmei, the fourth largest cinema chain. Huaying has a partner in both the north and south. In the north, it is Xingmei Cinema Chain. Together, they control more than 120 cinemas and nearly 355 screens in the north.

The two cinema chains that cooperate with each other, Xingmei Cinema and Kanpianer.com, have just over 700 screens. Although they have an advantage in quantity, their actual value is vastly different. This is because Xingmei Cinema consists of first- and second-tier high-end cinemas, while Kanpianer.com mainly consists of small, dilapidated, and old cinemas in third- and fourth-tier cities.

In terms of box office potential, Xingmei even has the upper hand.

After finding Wu Kebo, Tan Hui proposed that Xingmei and Huaying should also accelerate the integration of cinema layout, and planned to invest another 15 billion yuan in the second half of the year to acquire 15 directly operated cinemas and add 100 screens.

It just so happens that several of the target cinemas belong to Chengtian Group, so Tan Hui came to inquire whether they were interested in selling.

When discussing movie theaters, the only topic that can't be avoided right now is movie streaming websites.

The two naturally talked about Wang Yao as well. Tan Hui mentioned Wang Yao's disruption of "Wang Yan," which made Wu Kebo realize that he should also be a 'victim of Wang Yao' like himself and Yang Zi.

Wu Kebo tearfully recounted how Wang Yao, this jinx, had tricked him step by step into his current predicament.

Although Tan Hui felt that it was all Wu Kebo's own greed that led him to try to swallow an elephant, what did it have to do with Wang Yao?
But Wu Kebo insisted that there must be a connection, but he didn't know what the connection was, making a fuss like a woman who had been abandoned by a scumbag.

However, Wu Kebo was quick-witted. Since Xingmei was going to invest in acquiring the cinema chain, why not integrate it with Chengtian?

Moreover, Chengtian still holds shares in Kanpianer.com. Although Meishe is defunct, the "One-Day Store Manager" service value-added activities can still continue.

Moreover, once Tan Hui's money comes in, it will not only directly help Cheng Tian alleviate his debt pressure, but will also lead to a strategic partnership with Xingmei Cinemas, which will definitely be a major positive for the stock price!

Tan Hui thought it made some sense, but the two sides disagreed on the control of Chengtian. The two companies had different business expansion goals. Chengtian was developing both overseas and in mainland China, while Xingmei only focused on the potential of the domestic market.

Moreover, Tan Hui didn't really trust Wu Kebo's abilities.

On the surface, Wu Kebo was angry, but in reality, he had other plans. After the collapse of the cross-shareholding Meishe, his relationship with the Japanese investors behind him had already been strained, otherwise he would not have been unwilling to lend out even a few hundred million yuan.

Without financial support, Wu Kebo knew that his control over the company would be greatly weakened. He knew the true nature of these bloodsuckers better than anyone else, and even if he was interested in the future development of the cinema chain, he felt it was meaningless.

His most important goal now is to find a way to sell his 16% stake. He initially invested 300 million yuan, but now it's only worth a little over 100 million yuan. He can't let half a lifetime's hard work go to waste.

He no longer cares about control. Anyway, he's lost his woman and his reputation is ruined. All the effort he puts into managing the company will ultimately benefit someone else. Why bother?

But finding a sucker to take over the losses is impossible, but Tan Hui, who is essentially a sucker, is the best opportunity to recoup losses.

If the stock price can be pushed back up to above 10 yuan, then he can break even with a small loss!
So the story of Sohu's poison pill plan in 01, which boosted its stock price, automatically came to mind; he had been thinking about it for a long time.

In fact, he was well aware that the reason for the consistently low stock price was that there were too few shares circulating in the secondary market, and that most of them were likely already controlled by that scoundrel Chen Hao.

Although he had reported the matter to the Hong Kong Supervisory Commission many times, it was rejected each time because the other party did it very cleverly.

Moreover, as the CEO and the publicly acknowledged major shareholder, he couldn't openly sell his shares. That would be tantamount to telling everyone that the company was going to go bankrupt, and not only would his shares be worthless, but Morita and his group would probably not let him off the hook.

However, the poison pill plan allows for a reasonable internal share issuance and demonstrates Wu Kebo's determination to "live or die" with the company. Coupled with the upcoming announcement of the good news that the revenue from theatrical films in Q2 will increase by 80%, it will definitely boost the stock price.

This poison pill is a godsend for his current predicament!

Therefore, he finally decided to compromise with Tan Hui, agreeing to sell his shares to Tan Hui at a discount if the poison pill plan succeeded.

But the prerequisite is that Tan Hui's Xingmei must act in a play with him.

Its name is 'White Knight'!
“The plan is simple. Mr. Xu’s Meishefang already holds more than 30% of Chengtian’s shares, so they can directly make a takeover bid. After the poison pill is triggered, Mr. Tan from Xingmei will be invited to participate in the acquisition of shares at a premium as the ‘white knight.’ We expect to increase our holdings by 1.6 million shares,” Wu Kebo said in a deep voice.

A tender offer refers to a situation where a shareholder or party acting in concert owns a certain percentage of the shares of a listed company (more than 30% in Hong Kong stocks) and launches a full tender offer to all other shareholders to acquire the target company.

Once the acquiring party acquires more than 90% of the shares, the offer is successful, and the remaining shares will be forcibly acquired at par value, granting the company 100% ownership. After the success, the company may choose to privatize, suspend trading for restructuring, or resume trading.

Last year, the Li family privatized the telecommunications company through a tender offer.

The poison pill plan is designed to counter such takeover bids. Common examples include the "pop-up poison pill" (e.g., Sohu in 01, Sina in 05), and other types such as "pop-in," "debt," and "executive" poison pills. The goal is to increase the acquiring party's costs, forcing them to back down. This is a defensive mechanism, representing the company's management and board's confidence in operating the company, which is why it can boost the stock price. Stock buybacks and cancellations are also methods to increase confidence.

Wu Kebo's plan was to first have Xu Chen act as a takeover bidder. Once the poison pill was triggered, all shareholders except the acquiring party could reasonably increase their shareholdings according to the poison pill rules. For example, if it was stipulated that one share could buy two shares, then it would be equivalent to a 50% discount.

Whether or not to buy is entirely up to the other shareholders.

Because the shares have been issued, the equity of other shareholders will be diluted, and the stock price will fluctuate accordingly. The current total share capital is 1.6 million. According to Wu Kebo's crazy plan, the ratio is 1:50, which can directly increase the total share capital to 80 billion shares.

Although he said he controlled 1.6 million shares, based on the discount ratio, Xingmei could acquire nearly 50% of the company's shares for less than 7 million yuan, which would directly dilute the shares of all the shareholders present by half.

Acquiring a listed company with fixed assets of at least 7 billion yuan for less than 20 million yuan, although the debt ratio is a bit high, is not a big problem for investors with strong financial strength. With integration and restructuring, the stock price may be driven up.

The stock price is currently around 7 yuan. How much will it be worth then?

I'm afraid that Wu Kebo will use our shares to pay off the debt.

Poison pills are essentially a game of strategy.

Internally, it's a power struggle between shareholders and management; externally, it's a power struggle between acquiring parties. Ultimately, what everyone values ​​is the company's development and profits.

Because most poison pill plans are just a show, but nobody knows where the show is taking place.

For example, in 2005, Shengda acquired Jiulang. Shengda ultimately failed, but because the poison pill nearly doubled Jiulang's stock price, Shengda eventually sold the shares and made a profit of over 100 million.

After listening to Wu Kebo's plan, the meeting room fell silent.

They weren't shocked, but rather they were all making plans.

1. Is Wu Kebo reliable or not?

Second: Is Tan Hui, the White Knight, reliable?

Third: Is this movie theater chain reliable?

Wu Kebo seemed to have anticipated the outcome, and directly released the Q2 financial report, showing that cinema revenue was close to 4 million! That's an 80% increase compared to Q1!

If this had happened before Meishe's scandal, Wu Kebo would definitely have been the biggest contributor to the success of the project.

But now, revenue growth alone seems like a drop in the ocean in the face of massive debt.

"Chengtian's current debt ratio is close to 70%, which is considered a junk stock in the film and television sector. Based on the revenue of the cinema chain, even if the revenue exceeds 1 billion this year, the net profit is estimated to be less than 10 million, because the interest on the 14 billion debt is too heavy."

If there are no other business growth opportunities in the future, it will take at least 5 years to return to a normal business model. Everyone's money is tied up in it. Who can say for sure what will happen in 5 years?" The first person to raise this question was A Liwei, who is now the largest shareholder of Meishe. He has more authority to speak than Xu Chen.

Cheng Wei's questioning made everyone else frown as well.

"The poison pill plan is a good method, but what if the stock price doesn't rise? What if it falls?" the brokerage representative said in a deep voice.

"You are all regulars in the stock market, and you all know in your hearts whether the company is valuable or not, so I won't waste my breath. I'm just making a suggestion, and you can discuss whether to accept it or not. If you all disagree, then I will, in the name of the major shareholder, propose a privatization offer on my own. At that time, I will sell the company's assets to Xingmei at a discount, and everyone will share the spoils."

But the reason for having Meishe play the 'bad guy' is mainly because Meishe represents Alibaba's attitude. If shareholders see that Alibaba, as an investor, is willing to acquire Chengtian, doesn't that indirectly prove Chengtian's value?" Wu Kebo maintained his smile.

But without a doubt, it is a threat.

Because he also holds more than 36% of the shares on behalf of others, he can also launch a takeover bid.

He consulted with everyone simply because he saw that Alibaba, the company behind Sino-American Film Studio, could make the show sound better and boost his confidence. But if there were no villains, he could entertain himself.

In an instant, everyone's expression changed. This was one of the drawbacks of having a major shareholder holding more than 30% of the shares—it was too reckless.

"Looks like this isn't a discussion, it's a notification." Yang Zi laughed. "I don't care what happens every day. Anyway, I don't have any shares. Whether it goes up or down is none of my business. I just want to get my money back."

He was clearly happy to see the luggage being divided.

"Aren't you afraid that Mr. Wu will give you a poison pill of debt and force you into bankruptcy protection?" Xu Chen chuckled.

"Hey, Mr. Xu, don't say things like that. My reputation with women is so-so, but I'm absolutely loyal to my brothers." Wu Kebo said somewhat displeased.

"So, the cooperation that General Manager Wu and our General Manager Cai reached was canceled?" Cheng Wei's expression was rather grim.

Wu Kebo had previously begged Cai Chongxin for a hand, hoping to use his resources to control Tianhuo. Now that he has a better partner, he not only kicked them out but also wants to use them as pawns.

His character is really terrible.

"President Cheng has misunderstood. This performance was intended to boost the stock price and expand the business. After introducing Xingmei, Chengtian will indirectly hold 1100 screens, occupying one-fifth of the entire cinema market."

"They are the absolute leader in the cinema industry. It will be easier for them to raise funds or borrow money. We still have value to Alibaba." Wu Kebo's expression was solemn. He dared not offend Alibaba.

Cheng Wei's expression softened upon hearing this. They didn't care about whether the cinema chain was the leader or not; they only cared about the 20% stake in Tianhuo Shares that Cheng Tian held.

"I have high expectations for Chengtian's future development. As the saying goes, 'No destruction, no construction.' This poison pill plan may be the first step for us to dominate the cinema industry. In fact, everyone, you can consider increasing your holdings. After all, a 40-50% discount is a once-in-a-lifetime opportunity," Wu Kebo promoted.

"A 40-50% discount? I'm just afraid it'll turn into a 0.1% clearance sale later." One of the brokers sighed, preparing to take this opportunity to sell off some shares.

The meeting ended in less than half an hour.

The more important the meeting, the shorter it is, and everyone goes back to discuss it with heavy hearts.

After receiving Cheng Wei's report, Cai Chongxin became even more irritable, already feeling frustrated by the recent string of bad news surrounding Alibaba and the resulting slump in its stock price.

"He's more trouble than he's worth. This Wu Kebo is really delusional. If a poison pill plan could bring the stock price back up, what would be the point of short sellers?" Cai Chongxin was speechless.

In his view, only companies with super potential, or shell companies whose market value has bottomed out and are about to be delisted, need to use poison pill plans to pull off some shady operations.

Why is a company that's barely surviving getting involved?

“However, if 7 million can buy 50% of Chengtian’s shares, it would indeed be quite worthwhile. Most of Chengtian’s assets are real estate, and housing prices have been rising rapidly recently.” Cheng Wei’s mind was a bit quicker.

"Let's leave it for now and see what happens." Cai Chongxin frowned as he spoke, deciding to wait and see. After all, Alibaba had ample liquidity and could adjust its strategy at any time.

Wang Yao naturally received Xu Chen's report immediately.

This made him suddenly understand the phone call he had received from Morita Ryu earlier.

Wang Yao looked at the reply to an international email from Wall Street six hours earlier in his inbox, a smirk playing on his lips, revealing his gleaming white teeth.

"Poison pills? Aren't you afraid of poisoning yourself to death if you swallow them?"

(End of this chapter)