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Chapter 271 Hype

As December arrived, news about Leap Games dominated headlines across the United States.

From Wall Street financial elites to ordinary people gossiping on the streets, from industry leaders to programmers typing on keyboards in coffee shops, everyone's conversation revolves around this game company that suddenly caused a sensation.

First, YueDong Games officially submitted its IPO application and announced its preparations for listing.

The news, once it was released, was like an atomic bomb dropped on a calm lake, instantly creating huge waves.

What truly set the company off was the explosive financial statement that was subsequently revealed.

Compared to YueDong Games' financial reports, which were previously touted by the media as dazzling and impressive, they seem like a primary school student's math homework—pathetically simple.

The revenue figures stunned everyone, and the profit margins exceeded people's expectations of the gaming industry.

Not only did it cause a sensation in the United States, but major media outlets around the world also reprinted and reported on it, and for a time, the name YueDong Games became a top trend in the global financial circle.

What drives ordinary people even crazier than the financial reports is the internet wealth creation movement sparked by this IPO.

In the past, people's understanding of how a company's listing can create wealth was mostly limited to the management level. However, YueDong Games has taken wealth creation to a new level this time, showing everyone what it means to share the benefits equally.

Needless to say, the net worth of the management team is considerable. Based on the IPO price, each executive's net worth easily exceeds one million US dollars, with the core management team heading straight for ten million US dollars. Any one of them could easily join the ranks of the newly rich on the rich list.

But what's most surprising is the benefits for ordinary employees. It's said that even the security guards standing guard at the company gate will receive a bonus of $50,000 this time.

What does $50,000 mean? For many ordinary Americans, that's roughly a year and a half or even two years' salary, enough to make a down payment on a house or buy a decent new car.

When the news came out, security personnel from other companies were almost in tears. They were all on guard duty, so why were their bonuses so generous?

Some even joked: Is it too late to apply for a security guard position at the entrance of YueDong Games? Even a part-time job would be fine.

What's even more mind-blowing is the equity distribution. In the past, the industry believed that only core employees and management could get equity when a company went public, and ordinary employees would consider it a great blessing to get some stock options.

However, YueDong Games does not play by the rules. According to internal sources, more than 80% of the company's employees are eligible to receive equity or have already received equity.

The moment this ratio was revealed, the entire industry was in an uproar.

Although many ordinary employees do not own a large number of shares, this has undoubtedly changed the past distribution model in which the wealth of listed companies was concentrated in the hands of a few people.

This model of universal shareholding has not only boosted the morale of YueDong Games' employees, but also made employees of other companies envious. Many people have started to complain that their own bosses are too stingy, and some have even started inquiring about YueDong Games' recruitment information.

A headhunter revealed that the number of people inquiring about positions at YueDong Games has increased several times over recently, and even core employees from other companies have proactively approached them.

This has reignited a topic that had been raised in the past but had fallen silent: the welfare benefits of Ernst's companies.

Especially after media reports exposed that YueDong Games organized a ski vacation for all its employees in Denver, it's worth noting that Denver's ski resorts are known for their high-end nature. The cost of tickets, accommodation, and transportation for each person is not insignificant. Yet, YueDong Games actually covered the expenses for all its employees, and even their families benefited from the trip.

Then the various welfare benefits of Ernst's companies were thoroughly investigated, and the more they were investigated, the more heartbreaking it became.

Compared to other companies that only have a water bar and require employees to pay for their own lunch, Ernst's companies are practically an employee paradise.

Free lunch and dinner are just the basics; snacks and drinks are unlimited in the company. What's even more enviable is the entertainment benefits: the entertainment area is fully equipped with billiards tables, pool tables, and game machines, so employees can relax when they're tired.

There are also professional massage rooms that provide free massage services to employees at regular intervals every day to relieve work fatigue.

The new office building that YueDong Games is building and will soon be completed is also modeled after Google's headquarters. In addition to regular office areas, it also features a variety of sports facilities, including basketball courts, soccer fields, gyms, yoga rooms, and even an indoor swimming pool.

With the disclosure of benefits and compensation packages, the battle for talent has once again become a hot topic.

"Oligarchic monopoly".

Wall Street and major financial institutions have all figured out the tricks of the trade.

It wasn't that Ernst was being particularly kind and wanted to offer these benefits, taking the money he had earned out of his pocket.

What he wants to do is to make his company an oligopoly by monopolizing talent.

By raising the cost of talent within the industry, attracting more talent, and developing better products, the cycle repeats itself, eventually leading to an industry oligopoly.

This is similar to how large corporations continuously invest in various fields, and good benefits are an investment in talent.

However, Wall Street doesn't care about any of this; on the contrary, they are quite happy because the biggest driving force behind this nationwide discussion is Wall Street itself.

How could they possibly let this opportunity for hype pass them by? They'll definitely go all out to create buzz, with all sorts of rumors flying around.

"The IPO of YueDong Games will be the most sensational and largest IPO in gaming history"—this is already the most conservative estimate from Wall Street.

Open any financial news page and you'll find all sorts of reports praising YueDong Games, with some analysts saying that "YueDong Games will reshape the landscape of the gaming industry."

Some fund managers have called this "a once-in-a-decade investment opportunity."

Some even publicly stated on television programs that "LGC's listing may ignite the entire internet technology sector."

LGC is the stock code for Leap Games Co.

Driven by Wall Street sentiment, the entire market was in an uproar, with everyone going crazy over the stock code LGC.

Various insider rumors began to circulate, claiming that the market value of YueDong Games was absolutely undervalued and that winning the lottery was pure money.

Some even confidently asserted that a consensus had been reached within Wall Street that YueDong Games' market capitalization would exceed $150 billion after its IPO.

Some people firmly believe this claim, thinking that with such good financial reports and so many positive news, a market value of $150 billion is reasonable.

Some people have raised questions, believing that this must be Wall Street hype, and that game companies don't have such high market value.

As one of the giants in the American gaming industry, what is EA's market value?

Just as the two sides were arguing fiercely and many people scoffed at the $150 billion market capitalization claim, a report published by the Wall Street Journal essentially acknowledged the validity of this claim.

The Wall Street Journal interviewed ten top analysts from major Wall Street financial institutions, and eight of them agreed on a $150 billion valuation. They stated that if YueDong Games' market capitalization exceeds $150 billion...

We wouldn't be surprised if it were hundreds of millions of dollars.

The remaining two analysts who shook their heads, while feeling that $150 billion was a bit exaggerated, still gave a high market capitalization prediction of over $120 billion.

The analysts' reasoning was simple: YueDong Games' strategic plan gave them enough confidence that the company's financial report next year would far exceed expectations.

First, let's look at the game content.

Whether it's games developed in-house by YueDong Games or those from game studios they've invested in, a large number of games will be available on the YueDong Games platform next year.

Moreover, the quality requirements of dynamic games are ridiculously demanding.

Previously, the media reported that YueDong Games' self-developed sports game failed to meet internal requirements for the details of jersey movement, so the company decided to invest $1800 million to develop a dedicated clothing dynamics engine to solve this problem.

Many gamers don't pay attention to details like clothing movement. When playing games, everyone's attention is on the character's movements. Who's going to stare at the movement of clothing?

But Leap Games spent $1800 million on just this one small detail.

Keep in mind that $1800 million is enough for many small game studios to develop two or three games, but Leap Games used it to fix bugs.

When the news broke, it caused a small sensation, with many media outlets joking that Jump Games must have obsessive-compulsive disorder.

It is precisely because of this relentless pursuit of quality that the company slogan, "Dynamic, Creating Excellence," has convinced everyone that it is not just empty talk.

Wall Street analysts believe that games launched on a large scale next year, as long as they maintain a high quality, will definitely attract a large number of players, thereby driving revenue and profit growth.

After all, players are becoming increasingly discerning, and poorly made games simply won't sell. Leap Games' focus on high-quality games has hit the market's sweet spot.

Secondly, there is the development of the YueDong gaming platform.

The huge success of Counter-Strike previously spurred the early development of online games.

Many game companies have officially announced their online game titles, and most of them will choose to launch them on the YueDong Games platform.

One of the main sources of revenue for gaming platforms is publishing and distribution fees. If a large number of online games are launched on the YueDong gaming platform next year, the platform's publishing and distribution fees will definitely increase significantly, and the increase may exceed expectations.

In addition to content and platforms, YueDong Games has recently been rumored to be entering the home game console market.

As for the specifics of how to enter the market, there is no decision yet. It depends on whether to directly acquire an existing game console company and quickly enter the market, or to develop the console from scratch.

Regardless of the method, the news has excited the market.

In the current gaming industry, home game consoles still dominate.

The quality of a game console is actually secondary to its sales performance; what truly determines its success is the quality of the games.

After all, gamers buy consoles to play games, and even the most advanced consoles won't sell if there aren't good games to support them.

In terms of game content creation, YueDong Games has always been a strong point.

If Leap Games were to actually enter the home video game console industry, it could leverage its content advantages to attract players to buy consoles.

Therefore, the market is very optimistic about this news, considering it a huge positive development. Many analysts even said that "this may be a key step for YueDong Games to break through the $200 billion market value mark in the future."

Another point highlighted by analysts is the underwriting fee for IPOs.

Generally speaking, the underwriting fees for domestic companies listing on the US stock market are lower than those for foreign companies, but even so, the fees are usually between 3% and 5%.

For smaller companies with IPOs, underwriting fees can even reach 6% to 7%.

Simply put, if a company raises $1 million through an IPO, it will have to pay $7 million to the brokerage firm responsible for the issuance, based on a 700% underwriting fee.

However, these fees are aimed at general enterprises and smaller businesses. YueDong Games is clearly a second-class company and is not within the general scope at all.

1.9%—that's the price set by Ernst and the three Wall Street underwriters. It's practically the floor price for a large IPO in the US stock market, and very few brokerages would be willing to accept such a low rate.

The three major securities firms were furious at the time, but now it has become their best publicity tool to boost the market value of YueDong Games.

Look how optimistic we are about this company; even with such low underwriting fees, it still can't dampen our enthusiasm for underwriting it.

"That's all bullshit," was Ernst's immediate reaction upon seeing the reports on the subject.

The three firms wanted a high price, but Ernst dared to abandon them and go to other brokerages to issue the shares.

"You'd better watch your words," a tall, beautiful woman said coldly, glancing at him with murderous intent.

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