All the questions were hypothetical. To get to the bottom of the matter, the first step was to find a way to et with Yahoo’s new CEO, Carol Bartz.
Chen Xuejiao, accompanied by Yi Anguo, arrived at a luxurious villa not far from the company. She had purchased it according to Yi Anguo’s requirents and was temporarily staying there herself. The villa did not have full-ti staff, with cleaners hired only as needed, ensuring a high level of privacy. Chen Xuejiao was highly capable, and Yi Anguo was very satisfied with the property. Even though he might not visit the United States more than once a year, having a fixed residence was still essential.
「A few days later」
Chen Xuejiao successfully scheduled a eting with the new CEO of Yahoo.
"How did you manage to get an appointnt with Bartz?" Yi Anguo asked, still a bit curious.
"Yahoo’s financial situation isn’t good right now," Chen Xuejiao explained with a smile. "Bartz just took over, and she isn’t having an easy ti. With the stock price plumting and the market value severely shrinking, she urgently needs to deliver so results to show the company’s shareholders and prove her own worth. When the head of a major investnt firm wants to invest in Yahoo, what reason would she have to refuse?"
Yahoo’s market value was currently less than $15 billion, a drop of nearly fifty percent from the beginning of the year. Compared to its glory days, its value had evaporated by ninety percent.
On February 1st of that year, Microsoft had announced a takeover bid to Yahoo’s board. The offer was $31 per share, a 62% premium over the previous day’s closing price of $19.18. The total deal, a mix of cash and stock, was valued at $44.6 billion. However, Yahoo’s board had balked, stating that the price "significantly undervalued" the company’s actual worth, especially since analysts pegged it at $56 billion. Microsoft eventually raised its offer to $33 per share, increasing the total value by nearly $5 billion. But Yahoo’s executives, worried that their personal power would be curtailed after an acquisition, ultimately rejected the deal. They missed out on an offer that had climbed to nearly $50 billion.
Now, just over six months later, Yahoo’s stock had fallen below ten dollars, and its market value had cratered to less than $15 billion. With most of Yahoo’s shares controlled by Wall Street capital, the bla for the missed Microsoft deal and the company’s underperforming profits fell squarely on the CEO, Yang Zhiyuan. Pressured by these capital interests, Yang Zhiyuan, one of Yahoo’s founders, had no choice but to resign.
After taking over, Bartz quickly signed a cooperation agreent with Microsoft. Microsoft would provide search services for Yahoo, and in return, Microsoft would acquire Yahoo’s core search technology over a ten-year period. Regardless, the severe decline in Yahoo’s market value was an undeniable fact, and Microsoft was no longer interested in a nearly $50 billion acquisition. At this point, Yahoo desperately needed external investnt to boost confidence and show Wall Street that a revival was still possible. So when an investnt firm from the East proactively sought a eting, Bartz naturally wasn’t going to refuse.
Yi Anguo followed Chen Xuejiao to the Yahoo headquarters and t Bartz in her office. He was a bit surprised to find that Bartz was a blonde woman; he had assud she would be a man.
The new Yahoo CEO’s attitude toward their arrival was markedly arrogant.
"Mr. Yi, your Hualong Investnt Company has recently invested in several small companies in Silicon Valley. But let be clear, Yahoo is not one of those small companies. If you’re only talking about one or two hundred million dollars, then, to be blunt, we don’t need it." she stated flatly. "If your investnt is less than one billion dollars, then I’m sorry, but this is simply a waste of my ti."
I have half a mind to curse her out, Yi Anguo thought. Does she have any self-awareness? Does she not know the state of her own company or how far its market value has fallen? And what does she an by ’small companies’? Is Facebook small? Its valuation is $15 billion, on par with Yahoo’s. How is that small? Is Tesla’s $750 million valuation small? In ten years, Yahoo won’t be worth even a fraction of that.
Although Yi Anguo was irritated by Bartz’s arrogance and prejudice, he was on her turf and had a clear objective. A little impatience can spoil a great plan. He kept his cool and spoke calmly.
"Ms. Bartz, while Hualong Investnt Company is young, an investnt of just one or two hundred million dollars wouldn’t require to co and negotiate in person."
Bartz nodded with satisfaction. "Good. Then how many billions is Hualong Investnt prepared to invest in Yahoo?"
Yi Anguo thought for a mont, then held up one hand, showing five fingers. "Five billion US dollars."
"Five billion dollars! That’s... an acceptable figure. We can offer you ten percent of Yahoo’s shares for that amount," Bartz said with a decisive nod.
Yi Anguo, however, simply shook his head.
"Are you not satisfied?" Bartz’s tone grew sharp. "You should know that earlier this year, Microsoft offered fifty billion to acquire us, and we refused. Now you’re investing five billion for a ten percent stake, and you’re still not satisfied?"
"No, no, you’ve misunderstood ," Yi Anguo said with a smile, finally revealing his true purpose. "I don’t need shares in Yahoo. I want to spend five billion dollars to purchase the forty percent stake in Taobao Company that you hold."
"Did Jack Ma of Taobao send you?" Bartz’s face imdiately darkened.
Yi Anguo was unaware that Jack Ma himself had recently co to the US to negotiate buying back those very shares. He had also offered around five billion dollars and had been flatly rejected by Bartz.
"Not at all," Yi Anguo explained hurriedly. "I am not here on behalf of Taobao. I don’t have a favorable impression of Jack Ma. In fact, I dislike him."
"If that’s the case, why do you want to buy his company’s shares from ?" Bartz asked, her skepticism clear.
"Because I’ve invested in an online shopping website called Anjing Online Supermarket, and Taobao is our most formidable competitor. We have a saying in China: ’pull the firewood from under the pot.’ If I acquire forty percent of Taobao’s shares, I can gain control of the company and oust Jack Ma directly," Yi Anguo explained.
"I see. But even with a forty percent stake, you couldn’t get rid of him, could you?" Bartz reasoned aloud. "Sun Zhengyi of Japan would surely side with him. Their shares combined make up sixty percent. Your forty percent couldn’t possibly shake Jack Ma’s leadership."
"I have my ways of dealing with Jack Ma," Yi Anguo said, his voice laced with confidence. "I can beat him in the marketplace. My Anjing Online Supermarket is not to be trifled with. Once Taobao fails to turn a profit for a sustained period, even Sun Zhengyi won’t be able to continue supporting him."
He leaned forward slightly. "Besides, Jack Ma doesn’t personally hold that many shares. His so-called founding team isn’t a monolith. I can divide and conquer them from within, buying up shares from others at a high price. Once I hold a commanding majority, Jack Ma will be powerless against , even with Sun Zhengyi’s backing."
Bartz listened, a thoughtful expression on her face. "Even if what you say makes sense, why should I sell to you? Before you ca, Jack Ma was here himself. He also wanted to buy back our forty percent stake in Taobao. He offered five and a half billion dollars, and I rejected him. You’re only offering five billion. Do you really think I would sell to you?"
Yi Anguo shook his head. "I doubt Jack Ma could actually offer five and a half billion to buy back those shares. But to show our sincerity, I can raise our offer to five and a half billion dollars."
"While I’m personally not a fan of Jack Ma, I am optimistic about Taobao’s growth potential," Bartz said after a mont of consideration. "If you are truly serious, Mr. Yi, you’ll have to offer at least six billion dollars. Only then will I consider putting a motion to sell the Taobao shares before the board."
A price of six billion dollars was acceptable to Yi Anguo, but he worried that if he agreed too quickly, she might raise it again. He feigned deep thought for a long mont before asking, "If this proposal is brought before the board, what do you think are its chances of passing?"
"I can’t make any guarantees," Bartz said, shaking her head. "But I’d say there’s about a fifty-fifty chance."
"Does an acquisition like this really need board approval? Don’t you have the authority to decide?" Yi Anguo asked, a hint of confusion in his voice. "Your predecessor, Yang Zhiyuan, seed to wield considerable power. It appears he made many decisions unilaterally, like the investnt in Taobao and the rejection of Microsoft’s acquisition, correct?"
Bartz gazed at Yi Anguo, falling into a thoughtful silence, her expression unreadable.
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