Rebirth 02, the Celestial Being Told Me to Stop Pretending

After Li Lu left, Lu Chen was the only one left in the office.

The night outside the window in Beiping was already pitch black.

Lu Chen propped his legs up on the desk, his heels scraping against the surface, and held an open laptop in his arms.

US stocks have opened.

Netflix's stock price is $8.43.

Lu Chen stared at the number, recalling a report he had read in his previous life.

In September 2004, Blockbuster launched Blockbuster Online, an online DVD rental service, priced two dollars lower than Netflix.

The news sent shockwaves through Wall Street, causing Netflix's stock price to plummet from $18 to $8, a drop of 57%.

Analysts on CNBC were shaking their heads, saying Netflix was finished, Blockbuster's brick-and-mortar store network was an "insurmountable moat," and that Reed Hastings, that little guy, wouldn't survive the winter.

That's all bullshit.

Lu Chen picked up his teacup and took a sip.

The tea was the same cup that Li Lu had just brewed, but it had gone cold.

The herbal tea had a slightly astringent taste, but he didn't have time to pay attention to it.

Netflix's current market value is about $500 million, and it is expected to rise to $300 billion by 2025.

In his past life, he bought 100 shares of Netflix when the stock price was over 800, made a profit on a hotpot meal, and then ran away.

After thinking for a while, Lu Chen picked up his phone and dialed Yang Shoucheng's number.

When the call connected, there was a lot of background noise on Yang Shoucheng's end, probably from some drinking party.

"Ah Chen, is Zhong calling this night?"

Now he's called "A-Chen" instead of Lu Sheng, and Lu Chen can certainly sense the affection in Boss Yang's words.

"Mr. Yang, there's something I'd like to ask you for help with."

"speak."

"Netflix (NFLX) stock. Help me establish a position."

There was a moment of silence on the other end of the phone.

The background noise of clinking glasses suddenly faded away, and Yang Shoucheng had probably gone to a quiet place.

"How many do you want to buy?"

"Use three accounts, keeping each account below 0.3%, to avoid triggering the SEC's disclosure threshold."

"One percent?" Yang Shoucheng's voice held a hint of confusion.

"Ah Chen, are you sure?"

"Sure."

"Explanation?"

"intuition."

There was silence on the other end of the phone. Every time he talked to Lu Chen, he would think of that note from the Mandarin Oriental Hotel in Hong Kong.

Lu Chen could imagine Yang Shoucheng's expression at this moment: his brows furrowed, a cigar between his fingers, and his lips pursed.

The old fox has been in Hong Kong for thirty years and has seen many storms.

"Ah Chen." Yang Shoucheng lowered his voice.

"Tell me the truth, why didn't you choose Blockbuster?"

Lu Chen put his feet off the table and sat up straight.

"The real battleground is streaming media. Reed Hastings is already building up the technology, while Blockbuster doesn't even know what streaming media is."

The sound of a lighter came from the other end of the phone.

Yang Shoucheng lit a cigar.

How did you know?

"I've studied it," Lu Chen said without even blinking.

Because he did indeed study it.

He spent three days going through all of Netflix's annual reports and shareholder letters from 1997 to 2020.

That's in 2023, though.

Yang Shoucheng exhaled a puff of smoke.

"Okay. I'll arrange for Emperor Securities to handle it for you. Three accounts, buy in a diversified manner, and don't exceed the disclosure threshold."

"There's one more thing."

"speak."

"Find me a lawyer."

"lawyer?"

"The kind of person who is well-versed in U.S. securities law and Delaware corporate law."

Yang Shoucheng's side was clearly silenced again.

This time the silence lasted even longer.

"Ah Chen, why are you looking for a lawyer?"

"Study Netflix's bylaws."

"What are the regulations that are good to study?"

Lu Chen switched the phone to his other ear.

A car drove by outside the window, its high beams sweeping across the office glass.

"Mr. Yang, Netflix does not have a poison pill plan at the moment."

"Poison pill?"

"Anti-takeover defense"

"If Netflix discovers that someone is quietly accumulating shares on the secondary market, they can activate a poison pill, issuing new shares to existing shareholders at a low price to dilute the acquirer's shareholding. This is standard practice for US listed companies to deal with hostile takeovers."

"But you said they don't have them now."

"Yes. Netflix in 2004 had not yet encountered a hostile takeover; their bylaws did not include a poison pill clause."

Lu Chen stood up and walked to the window.

"But once Netflix realizes this, they'll add a poison pill to their bylaws. By then, the entry barrier will be even higher."

"So you hired a lawyer because..."

"Find the loopholes in their bylaws. Every single one that would allow us to continue increasing our holdings after the poison pill is activated."

"Okay. I'll find them for you. I'll gather the best securities lawyers in Hong Kong for you."

"Thank you, Mr. Yang."

"No need to thank me. Share your profits with me."

"must."

After hanging up the phone, Lu Chen tossed his phone onto the table.

The screen was still lit, and Netflix's stock price had dropped from 8.43 to 8.41.

It dropped by two cents.

He stared at the number, and a thought suddenly popped into his head.

In his past life, he bought 100 shares of Netflix. If he had held onto them without doing anything, those 100 shares would have become 700,000.

Hold.

He shook the thought out of his mind, opened his notebook, and turned to a blank page.

At the top it says "Coordinate Holdings (BVI)".

Then there are three paths.

Offshore shell companies can purchase shares in a diversified manner from the open market, keeping the stake below 4.9% to avoid triggering the SEC's disclosure threshold.

The US stock holdings were pledged to Emperor Securities, leveraging the company's capital capacity.

The upgrade of the Coordinate Asia system involves Hong Kong shell companies, offshore accounts, and cross-border funding channels.

The three lines eventually converge on one goal: Netflix.

Start a new line.

Poison pill plan.

Then he started doing the accounting again.

Total ammunition: over $900 million.

Buy approximately 100 million shares at an average price of $8-9 per share.

It accounts for approximately 1.8%-2.0%.

After finishing the calculation, he put down his pen, stared at the number, and couldn't help but laugh out loud.

That number of shares sounds like a fucking joke.

But there are some things I can't remember.

He closed his notebook, stood up, stretched, and his spine cracked twice.

Outside the window, the night in Wangjing was as dark as ink.

In the distance, the tower cranes on the construction site had their red warning lights flashing.

Lu Chen poured himself another cup of tea and then sat down again.

Continue writing in the notebook.

Netflix vulnerability analysis.

The Netflix chapter does not have a "change of control" clause.

This means that even if someone holds more than 10% of the shares, the board of directors cannot force the activation of the poison pill plan.

Delaware corporate law stipulates that the threshold for a shareholder to have the right to propose a motion is a continuous holding of more than 3% of the shares for one year.

However, this restriction can be circumvented by distributing the shares through multiple shell companies, with each shell company holding 2.9% of the shares.

Netflix uses a staggered board system, where only one-third of the board members are re-elected each year.

This means that even with 20% of the voting rights, it would take three years to become a member of the board of directors.

Then he turned to another page and began planning his path to increase his holdings.

Once Lu Chen had finished writing down all the plans, he handed them over to the Hong Kong lawyers that Yang Shoucheng had found, asking them to help him refine his plans.

But I can't get involved in this matter myself.

Thinking of this, a beautiful figure automatically appeared in Lu Chen's mind.

Yes, it's Liu Yifei's mother, Lu Chen's dearest Aunt Liu.

Lu Chen closed his eyes, and a picture suddenly popped into his mind.

In 2010, Netflix's stock price broke through $200, and Lu Chen no longer needed to hide.

At a press conference, Reed Hastings was asked, "Who is your boss (your biological father)?"

He replied, "Oh, it's the great Chinese tycoon, my guiding light, Mr. Lu Chen."

Hehe, just thinking about it is wonderful.

Money and power are the best lust for men, and that's certainly true.