Those Years When I Was Forced to Top the Forbes List

Chapter 381 Let Nature Take Its Course (Long Chapter, Please Vote)
Chen Xuebing was well aware of the situation regarding the Battle of Yaba.

Jack Ma readily accepted Yahoo's investment, but now he regrets it after realizing Yahoo's ambition to control Alibaba's board of directors.

According to the original agreement between Yahoo and Alibaba, although Yahoo bought 39% of the shares, it only held 35% of the voting rights for the first five years. The management had an additional 4% of the voting rights, so the management actually held 35.7% and Yahoo held 35%, making the management the largest shareholder in reality.

But after five years, the situation will reverse.

Yahoo's voting rights increased from 35% to 39%, while management's voting rights decreased from 35.7% to 31.7%. Yahoo will become the largest shareholder in practice. The number of board seats increased from one to two, equal to the number of management seats. SoftBank will retain one seat. The CEO protection clause in the original agreement that "Jack Ma will not be dismissed" will also be invalidated, and Yahoo can remove Jack Ma in accordance with its bylaws.

This is the biggest control crisis Jack Ma has faced in his business career. His founding team's equity is too dispersed. Currently, Jack Ma holds 6.984% of Alibaba Group, and Joseph Tsai holds 2.162%, which together amount to only 9% of the equity. If Jack Ma is removed from the position of CEO, the management team may be divided up.

Compared to losing control, Taobao's 10% stake is insignificant. After all, the shares acquired belong to Yahoo, so it won't affect the equity structure of his team. Taobao still controls 90% through Alibaba, maintaining absolute control.

However, Tsai asked him to buy half of Yahoo's shares, but he was not just buying shares; he was also buying control of Yahoo.

Even if Yahoo accepts, it will definitely charge a huge premium.

"Yahoo holds 39%, so half of that is 19.5%. How much do you estimate it will cost to acquire it?" Chen Xuebing asked tentatively.

Joseph Tsai seemed to have a plan in mind and immediately replied, "Based on a valuation of $50 billion, which is twice the valuation Yahoo was when it invested in 05, plus our pressure from the sidelines, we can force them to give up their half of the shares. When Mr. Ma spun off Alipay last year and let you invest, he had already shown them his power."

50 billion, 19.5%, that's 9.75 million US dollars.

Chen Xuebing was a little surprised, surprised that the price wasn't so outrageous.

I was somewhat enlightened.

So that's the hidden meaning behind letting me invest in Alipay.

By leveraging his position as the largest shareholder and with the support of Masayoshi Son, Jack Ma forcibly relinquished 30% of Alipay's equity, which was a clear indication to Yahoo that he could also find ways to divest other Alibaba assets.

It wouldn't take long for a CEO who can't be dismissed for the time being to completely destroy Alibaba.

If Yahoo doesn't concede shares, it's a declaration of war, and they'll just have to watch Jack Ma struggle for three years.

A valuation of $50 billion is much higher than his planned separate investment in Taobao.

Although there is still room for appreciation of forty or fifty times.

Although this is a rare large-scale investment opportunity, even the highest returns from ordinary investments cannot accommodate so much capital.

Although…

Never mind, I have to vote for it.

But this money.

Where can I get it done?
“President Cai, you’re treating me like a Japanese person… No, damn it, the Japanese only spent $2000 million to get 34% of your shares.”

"Masayoshi Son's initial investment of $2000 million, just like Mr. Chen's current investment of $9.75 million, did not overestimate Alibaba. Alibaba will continue to grow rapidly," Joseph Tsai said with a smile.

No wonder he's the man who designed the concerted action and VIE for Jack Ma.

"What valuation do you give me for 10% of Taobao?"

“It’s $30 billion, but I have one condition.” Jack Ma felt he had been taken advantage of and said without further ado, “Whether it’s Alibaba or Alipay, you must sign a joint action agreement with me to ensure consistency in action. If there are any disagreements on decisions, you have to listen to me.”

Joseph Tsai explained from the side: "Mr. Chen, we brought you in because we don't want any more disputes over control, so we must have some safeguards."

The two of them were singing in unison, it seems they had planned this beforehand.

“Alibaba and Taobao are fine, but Alipay is not.” Chen Xuebing also responded in a relatively fair tone: “You think Taobao should be under your control, I don’t deny that, you are better suited to run this company, but Alipay is in the financial field, my opinion is more professional than yours, I even think you should listen to me on important matters, you don’t know Alipay better than me.”

"With my support, Alipay will become a company no weaker than Alibaba, understand? Now, while it's still relatively small and not controlled by Alibaba, quickly spend money to transfer all the shares, preferably as a one-time compensation. The shareholders can just keep you and Mr. Cai."

As Chen Xuebing spoke, he gave the three of them a look that suggested they were dividing the spoils.

Jack Ma was very interested, but he also looked at Joseph Tsai with slight hesitation.

Joseph Tsai sighed: "I'll help you persuade them."

“That’s right. I suggest that no matter how many shares Mr. Cai holds, he should have 30% of the voting rights in Alipay. I’ll have 30%, Mr. Ma will have 40%, Mr. Ma will take the lead, and the three parties will jointly manage it. That would be better.”

A 334 partnership structure is a recipe for disaster, meaning that any decision must be agreed upon by both parties, resulting in extremely poor management quality.

In reality, however, Joseph Tsai and Jack Ma are on the same side, and this does not affect decision-making; in fact, Tsai has absolute control over the matter.

Chen Xuebing's design was simply to plant a seed in Jack Ma's mind from the very beginning: Alipay cannot be a dictatorship.

Jack Ma thought about it and did not refuse, but he put forward conditions.

"Mr. Chen, Alipay's equity independence is one thing, but the VIE structure must be retained in part. At least 50% of the profits must be transferred back to Alibaba, otherwise it's unfair to Alibaba."

Alipay's only current interest income from its reserve funds comes from Taobao merchants. The board of directors would certainly not agree to simply pocket all of it.

"Yes, but this transfer agreement can only include the interest portion of Taobao's reserve fund. The remaining 50% can be used entirely for Alipay's business expansion and technology research and development. After all, the improvement of Alipay's technology and business is of great help to Alibaba, so it can be considered as giving back to Alibaba. As for the other user account revenue, it is Alipay's own business and has nothing to do with Alibaba. I will apply to the central bank for two regulatory accounts, one for Alibaba's reserve fund and the other for Alipay user balances. The two must be kept separate."

Under Chen Xuebing's design, Alibaba's internal relationships became much more complex, with many more protocols and networks added.

In fact, company management doesn't need to be this complicated; it's just that it's become complicated because of profit motives.

Chen Xuebing was secretly glad that he had designed a holding group that was 100% his own to mobilize the resources of the subsidiaries. The company was him, and he was the company. It was not so troublesome for him to realize his own interests.

Both Jack Ma and Joseph Tsai seemed somewhat relieved as they accepted the complexity of the situation.

"Alright! That'll settle things then!"

After all, Chen Xuebing owns 30% of Alipay's shares. If he doesn't agree to this transfer of benefits, there will be endless disputes about the interest on the reserve funds in the future.

Chen Xuebing also gleaned some information from the subtle changes in their facial expressions.

His previous judgment was actually somewhat flawed.

Neither Jack Ma nor Joseph Tsai realized that the interest on this reserve fund would eventually become so high as to cause disputes. Perhaps they thought it was only enough for Alipay's own use, so they didn't consider this issue when transferring the equity to him.

It's only now that we're starting to care; it's belated realization.

This means that they are not entirely sure what scale Taobao's future business will reach, or what the scale of Alipay's reserve fund will be.

Their apparent determination was merely an attempt to convince themselves, the investors.

Since the other party is not firm, we should use some PUA (Pick-Up Artist) techniques.

"Mr. Ma, I still need to study the investments in Alibaba and Taobao. After all, it's a large sum of money, and it will take me at least six months to a year to raise the funds. Moreover, 3G is coming soon, and it's uncertain whether Taobao can still maintain its dominant position in the new field. After all, our Kunlun system aims to provide an open and competitive environment for everyone. As an investor, I should also consider the risks. I need to spend some time seeing if there will be any new dark horses in the mobile internet market and decide whether to diversify my investments. What I mean is, I do have the most confidence in you, but we may not need to invest such a large proportion. We can reserve some money to give other dark horses a chance."

"Mr. Chen!" Jack Ma was very displeased upon hearing this. "Give other dark horses a chance? What do you mean by that? We only decided to bring you in because we saw the huge support you can provide to Alibaba! You are a strategic investor, and the price we gave you was an internal price, not an institutional price! If you are not firm, how can we be allies?"

Chen Xuebing spread his hands, looking helpless: "Of course I will be firm once the investment is agreed upon, but after all, I need time to raise funds. I'll just take a look, just in case."

Ma and Cai exchanged a glance.

Is Chen Xuebing planning to cultivate a competitor to drive down their prices?

They actually understood what Chen Xuebing was thinking, but they had no choice but to comply.

The reason boils down to those three words: What if?
“Mr. Chen, just tell me directly, how long will it take you to raise the money? We’ll try to give you some time to ease up on the funding cycle, and the price will be locked at 9.75 million,” Jack Ma said.

Chen Xuebing was about to speak.

Joseph Tsai quickly chimed in, "Mr. Chen, how about this: you raise the price to exactly $1 billion, and we'll help you negotiate and get the contract signed as soon as possible. We'll also help you delay the payment until the end of the year, in December."

Jack Ma's tone is too lenient. 9.75 million? Give him time to process it. How long?

Let him decide? That would be terrible!
Chen Xuebing laughed.

He originally planned to delay until September or October.

By then, investments in the secondary market should be liquidated, and a profit of seven or eight billion is certain.

Three more months would be good too.

The second half of the year is when the US subprime mortgage crisis will become apparent, and the RMB exchange rate may rise significantly. The extra $2500 million may be made up for by the exchange rate fluctuations.

"The people I've met with the surname Cai in the past few years have all been quite remarkable. Mr. Ma is truly blessed to have found such a capable and supportive wife as Ms. Cai."

After speaking, Chen Xuebing glanced at Cai Chongxin with a suggestive look in his eyes.

The people with the surname Tsai he mentioned included Tsai Chih-chien, Tsai Chung-hsin, and Tsai Ming-chieh of MediaTek.

It is said that Tsai Ming-kai has been actively contacting him recently. MediaTek does not want to be left behind on the 3GTurn-key issue. When he acquired ADI, he promised to provide technical support. However, Tsai Ming-kai tricked Terry Gou by revealing that his mobile phone chips are manufactured by TSMC. If he hadn't kept Terry Gou in check, he would have been in trouble.

If MediaTek wants to enter the market next, it will have to be carefully managed by him.

While the 3G market appears calm on the outside, various deeply interconnected stakeholders have long been making strategic moves within it.

Communication standards are a source of immense profits.

He simply held onto the TD-SCDMA standard, a Chinese 3G standard, and that's how he got everyone to flock to him.

After Chen Xuebing finished talking with Ma Cai and had a brief conversation with the two brothers from Huayi Brothers, he came out of the second-floor office. The bigwigs downstairs were also about to leave.

"Xuebing! Xuebing! How did your talks with Zhongjun and Zhonglei go?"

As soon as Chen Xuebing entered the Peacock Hall, Liu Chuan, reeking of alcohol, greeted him.

"It's settled," Chen Xuebing said with a smile.

The two brothers didn't discuss any conditions with him. They readily agreed to his proposals for equity transfer and investment, to start a national high-end clothing company, and even to contact Wong Kar-wai. They also mentioned that they planned to take out a loan of 200 million yuan in Songjiang, Shanghai to acquire an industrial land and build a "Huayi Cultural City," and invited Chen Xuebing to visit the Shanghai branch more often for guidance.

What kind of cultural city? With Huayi Brothers' current financial resources, it's impossible for them to actually build one. He was too lazy to expose the two brothers' idea of ​​following the trend and hoarding land.

"Their matter is settled, but I need to talk to you about mine!"

Liu Chuan pulled Chen Xuebing aside and said, "Tell your brother, how much will this investment increase?"

Chen Xuebing didn't waste any words, and secretly made a "five" gesture with his hand: "At least this much."

"If we lose money, is there a guarantee?" Liu Chuan asked, shaking his head. Chen Xuebing frowned, but still nodded and said, "Yes, we'll sign a contract."

Liu Chuan immediately beamed with joy: "Guang Chang, Zhi Qiang, and I have pooled together 20 million! Didn't you negotiate a quota of 310 million? This 20 million shouldn't be a problem, right?"

Chen Xuebing looked troubled and sighed, "Fine, if you're introducing me to this business, how could I not include you?"

He wasn't faking his difficulty.

He can definitely raise the remaining 200 million through a trust. Trust interest rates are low, and the highest return will not exceed 100%. However, if the quota is given to Liu Chuan, he will have to give him a 40% return. Based on a return of about eight times, the profit after deducting the principal would be about 300%.

Twenty million, with a return of sixty million US dollars.

In the future, it will be necessary for everyone to take advantage of each other and make money together.

"Haha, let's go take a shower later, sign the contract, and I'll arrange for someone to transfer the money to your overseas account tomorrow!" President Liu was unusually agreeable this time.

"You don't need to take a shower. You've had too much to drink. Go home and rest early. Let's sign the contract at the company tomorrow."

Chen Xuebing glanced at the time, then looked outside the door, and said.

He actually invited someone else today, but they haven't arrived yet.

"Alright! Thank you, Xuebing, you're so considerate of your older brother!" Liu Chuan laughed heartily.

A few minutes later, everyone arrived at the entrance to exchange pleasantries, and one luxury car after another drove up and parked in a long line at the entrance.

Mr. Chen was extremely warm and friendly, exchanging phone numbers with local bigwigs.

A tall figure hesitated for a while, and seeing that there was an opening in front of President Chen, she came up to him with a flushed face and said, "President Chen, I heard from President Wang that you are our new boss. Can I save your phone number?"

Chen Xuebing looked up and saw Fan Bingbing.

Fan Bingbing, with her short hair, looked youthful and radiant with natural collagen.

Chen Xuebing actually admires another Bingbing, but since she took the initiative to make overtures, he smiled and said, "Work hard, take on more roles, and if you're not satisfied with the contract percentage, just say so. I'll have President Wang add some for you. I'll also arrange some commercial activities for you when I have time."

Gong Li seemed a bit aloof last time, so having Fan Bingbing handle the business reception would be a good choice.

Fan Bingbing later went solo. Improving the contract earlier would help retain talent and benefit Huayi Brothers.

"Alright! Mr. Chen, I'm taking this seriously!" Seeing that Chen Xuebing was young, Fan Bingbing didn't hold back and appeared quite energetic.

After chatting for a while, Chen Xuebing felt quite comfortable, more so than when he chatted with Gong Li. No wonder Xu Pidao was so fond of her.

Just then, a Porsche pulled up in front of the car, and the woman driving it rolled down her window and called out, "Chen Xuebing!"

Everyone turned to look at Lin Huixiang, who addressed President Chen by his first name.

Xin Mengzhen, wearing a light-colored sequined long dress, attracted even more attention when she got out of the passenger seat.

She was dressed exquisitely today, with her long hair styled up, her slender figure and neck, and her stunning face, making her even more dazzling than the two celebrities.

"Senior, I'm sorry I'm late." Xin Mengzhen shook hands with Guo Guangchang.

"Haha! Junior, we meet again! I knew it! President Chen's girlfriend is a celestial beauty! President Liu, don't you agree!"

"Hahaha! A perfect match! A talented man and a beautiful woman!"

Xin Mengzhen exchanged a few polite words with the bigwigs before approaching Chen Xuebing, crossing her arms and tilting her head slightly.

"I'm a little late because of something. Are you going to show me around, or do you have something else to take care of?"

She didn't seem to see Fan Bingbing beside her, but there was a hint of displeasure in her tone.

Just now, Fan Bingbing was chatting with Chen Xuebing, laughing charmingly, and even put her hand on Chen Xuebing's arm. She and Lin Huixiang both saw it.

She could yield to Yang Qingyue, but she couldn't tolerate anything else.

Chen Xuebing was also very unhappy because he could smell a hint of alcohol as soon as Xin Mengzhen got close.

"Where have you been? Drinking so much?" Chen Xuebing retorted.

“The client,” Xin Mengzhen said coldly.

"I've already brought the client to your door, are you going to talk to other clients?" Chen Xuebing glanced in Liu Chuan's direction.

"Hello, boss lady! You're so beautiful!" Seeing that things were getting out of hand, Fan Bingbing immediately reached out her hand to Xin Mengzhen.

Xin Mengzhen forced a smile, without explaining whether she was the boss's wife, and reached out to shake hands.

The old men around chuckled to themselves as they watched. They hadn't been caught making lewd jokes with the two female celebrities by their wives, but Mr. Chen was incredibly unlucky; he was just chatting with his girlfriend at the door when she caught him in the act.

Chen Xuebing had nothing to hide and was quite bold. He reached out and grabbed Xin Mengzhen's hand, then walked up to Liu Chuan without saying a word.

"Mr. Liu! My girlfriend owns a company called Huawi Electronics, which does computer OEM manufacturing. It's located in Zhangjiang. You'll have to take care of her!"

"Haha! We're all on the same side! Of course! Huawi Electronics, right? Got it! I'll call Yuanqing in a bit!"

Liu Chuan immediately agreed. With Lenovo holding the OEM orders for Chen Xuebing's girlfriend, he felt even more at ease about his investment.

Xin Mengzhen tried to pull her wrist away, but couldn't.

After a slight hesitation, she smiled and said, "Mr. Liu, I heard that your ThinkPad T60 series 2007MT1 is looking for OEM manufacturers. The key materials are a Core 2 Duo T7200 processor, 1GB of memory and a 120G hard drive. We have submitted a bid, but the competitor is Compal Electronics. Could you please mention it to give us a fair chance to compete?"

Upon hearing that it was a mainstream series OEM, Liu Chuan's expression turned serious: "Oh? How much production capacity can you produce?"

"To meet your production cycle, we can probably make about 6,000 units."

Liu Chuan did the math and realized it was only a little over 20 million in orders. He immediately laughed again: "Oh! No problem! Although Compal is a big manufacturer, we sell over a million units every year, with each product exceeding 100,000 units. They can't possibly handle that much! As long as your products pass quality control, I'll take charge! I'll put 6,000 orders in your hands for OEM manufacturing! Our OEM cycle is basically three months. The fact that you can do so much shows you're quite capable!"

Xin Mengzhen thought of the radiant Fan Bingbing standing beside her and spoke without backing down: "We are actually still working on orders from Toshiba and ASUS. Our main factory is in Hong Kong, and our quarterly production capacity can reach 17,000 units. We have been doing electronic ODM for more than ten years. In addition to computers, we also manufacture and brand electronic products such as learning machines and game consoles. We also have very strict quality control. President Liu, I look forward to cooperating with you."

"Oh? Hong Kong? Then you can do overseas orders! I'll have to keep a close eye on you guys! Hua Wei, I understand!" Liu Chuan laughed.

Those around him gasped in astonishment. This Mr. Chen, even his girlfriend is no ordinary woman. She's so beautiful and runs such a large-scale computer OEM business!
This was actually the first time Chen Xuebing had a direct understanding of Xin Mengzhen's family's strength.

With a quarterly production capacity of 17,000 units and an annual capacity of around 70,000 units, this factory is worth at least 100 million yuan. And since it's located in Hong Kong, if it owns the land, it could be worth over 200 million yuan.

Her family had only been involved in computer OEM manufacturing for less than a year, and they invested in such a large factory right away, so their financial situation must be quite good.

After chatting for a few minutes, Chen Xuebing pulled Xin Mengzhen away.

The two didn't get in the car, but strolled along the Bund, with Lin Huixiang following at a distance in her car.

After walking for a long time, the two finally separated.

"Mr. Chen's business is booming, he's become a celebrity boss." Xin Mengzhen said calmly, arms crossed to ward off the evening breeze, looking across the Huangpu River.

"Mr. Xin's business is booming, and he's constantly attending drinking parties. He must know a lot of young talents in Shanghai, right? It's getting harder to get him to come over," Chen Xuebing complained, folding his hands as he admired the European-style architecture on the other side.

"Don't dare."

"Disrespect, disrespect."

The two exchanged a sarcastic remark.

Xin Mengzhen was actually quite moved. In just a few words, this man had completed twice the amount of the task her grandfather had assigned her for a year.

Huawi Electronics, the Shanghai office of her family's main factory—that sales company that belonged to her—had only secured orders for more than 3000 OEM units in the previous six months. The more than 100 million orders produced since the establishment of the computer OEM factory were basically secured through her grandfather's connections.

Chen Xuebing didn't think too much about it; he just felt a little comfortable, took out a pack of cigarettes from his pocket, and lit one.

Xin Mengzhen used to dislike Chen Xuebing smoking, but now she didn't know what to say.

Chen Xuebing took a deep drag, then took off his jacket and draped it over Xin Mengzhen's shoulders.

Xin Mengzhen crossed her arms and shook her body, indicating that she didn't want to, but she felt the warmth of her body lining inside her clothes and her struggles were not very obvious.

She sniffed, then frowned and said, "It smells like smoke."

Chen Xuebing ignored her words, holding a cigarette in one hand and pulling down her wrist that was wrapped around her chest with the other, and said with a smile, "What's the point of always doing OEM? How about starting your own brand?"

Xin Mengzhen brushed his hand away again.

"I don't want to hear that."

"So what do you want to hear?" Chen Xuebing's eyes were playful. "If you don't want to hear anything serious, then I'll say something unserious. I said I miss you, but you don't like that."

"No." Xin Mengzhen hesitated for a moment, then quickly turned her head to the side. Her pale porcelain-white swan neck was bathed in the honey-like glow of the Shanghai night lights, and her words brought out a delicate blush.

The old man's mouth watered at the sight of the beautiful woman. He swallowed hard and looked around, noticing what appeared to be a Hanting restaurant with its lights on ahead.

The rooms at the Hanting Hotel seem too small; they don't even have floor-to-ceiling windows.

Forget it, forget it.

"Let's find a quiet place and talk about something you want to hear." Chen Xuebing quickened his pace.

"What are you doing? No, no!"

Xin Mengzhen was pulled forward, and her eyes also fell on the hotel in front of her. She struggled with a pale face, but felt like a little lamb. The self-defense skills she had learned for ten years suddenly became ineffective at this moment.

Lin Huixiang, who was in the car behind, stared wide-eyed.

Suddenly, the two of them headed towards the hotel across the street.

"Holy shit."

She saw Xin Mengzhen struggle at first, but when they reached the area illuminated by the hotel entrance lights, she seemed to want to avoid any misunderstandings and became obedient again.

The two adjusted their posture at the entrance, held hands, and slowly walked into the hotel lobby, looking like a couple who were about to have something happen between them.

(End of this chapter)