Exploiting Hollywood 1980.

Chapter 1530: Disney Stock Exchange

"Hi, Ronald. Please sit down..." Lei Shidong looked very confident. While he was speaking, a woman handed him a hot towel. I wonder which "close female friend" of his was this?
In this respect, this old man is a very "traditional" rich second generation. He has a wife who comes from a prominent family, but they each have their own affairs.

Although he seems to be doing very well, in fact, Redstone has had a lot of troubles recently. After acquiring Paramount Group, his company encountered great cash flow difficulties. He combined the assets of Paramount and the original Viacom, sold what could be sold, and rented what could be rented, which just managed to get through the quarterly report barrier for two quarters.

However, in September, his other acquisition, the acquisition of Blockbuster, was finally completed, but it caused him serious problems.

The former boss of Blockbuster held several board seats in the new company and pretended to interfere in the company's decision-making, causing Redstone to spend some money to remove him from Viacom's decision-making core.

The cost is that after Lei Shidong swallows up the two companies, the annual report at the end of the year will be quite ugly, and the stock price may fall further.

"Sam..."

Ronald was amused by the old man's pretentiousness. He knew the situation of Viacom very well.

After he acquired the stocks he bought at that time, he also held company stocks worth $100 million, which he later used as a guarantee for short selling. Although he made a lot of money from short selling, he never found an opportunity to sell these stocks.

He has a team of analysts who specifically monitor Viacom's stock price to look for opportunities to sell, but for such a long time, they have not found any opportunities, and the overall value has even dropped a bit. It's really a frustrating company.

So he called him by his first name. After all, they were both the bosses of the same media listed company, and Ronald held a little less core assets at most. Besides, the media industry was undergoing profound and rapid changes, and it was uncertain who would have more assets in a few years.

"Hey……"

Lei Shidong knew from the address that his true intentions might be seen through by the other party, but he still wanted to try. Years of experience told him that it was better to deceive the other party before discussing serious business. Maybe the other party would fall for it.
"I invited you here because I know about your recent moves. I am very satisfied after acquiring Blockbuster. There will be no more mergers and acquisitions recently. There are some TV station media resources and some film libraries of other film studios that Paramount has acquired over the years, such as Republic Pictures..."

"How much do you want to sell it for?"

Ronald has actually done research on various assets under Viacom. The two professional sports teams and Madison Square Garden he purchased are considered high-quality assets. In addition, Republic Pictures' film library may be another valuable asset.

It contains quite a few westerns starring John Wayne (mainly his works after he left John Ford, including those he directed himself...), as well as some spy films such as "Get Bluff", which were released at the same time as "Mission: Impossible", had high ratings and many loyal audiences.

Such a library can generate income for a long time. For example, the income from TV broadcasts, hotel on-demand broadcasts, and videotape sales can be passed on to future generations. I think if Viacom's current cash flow is not really tight, Redstone would not sell it.

"I'll give you a discount..." Lei Shidong quoted a sky-high price, which had nothing to do with the word "cheap". It was obvious that he was treating Ronald as a novice or an outsider in the business.

"Sam, today it's you who should sell things, not me who wants to buy... Look, I'm busy too, so let's just leave it at that..." Ronald stood up immediately after hearing the price. When negotiating with a businessman like Lei Shidong, one has to take the initiative and pretend to be uninterested even if he is interested.

"Please don't be so emotional, Ronald. You know, I need some good news about the business now, otherwise you won't be able to get these assets..." Lei Shidong was rare and patient as he explained to Ronald that both the TV station and the film library were monopoly assets.

The National Communications Association has a monopoly on wireless and cable TV production, which are non-renewable resources. In addition to the functions that Ronald thought of, the copyright library of old movies can also be used for remakes. Paramount was able to attract big stars like Tom Cruise to join the new film, also relying on the brand effect of "Mission Impossible" in the minds of the audience. Otherwise, every studio would have a lot of scripts for similar spy action movies in their warehouses, and Paramount would never get a chance.

"So, you need some good news?" Ronald heard this. It seemed that this old man was quite honest with people in the same industry as him. He was also relying on his strength and was fearless. Anyway, Ronald couldn't use this kind of news. Even if he sold all his future earnings, he might not be able to buy Viacom.

As for short selling, Viacom's stock price has been hovering on the floor for a long time. If its various businesses are split up and sold, the market value can almost be recovered. There is no room for short selling.

"Yes, do you have any suggestions?" Lei Shidong did not rule out Ronald having any new ideas.

"Here... no, here are some of my friends and I... Hi, I have some Viacom shares. Do you want to buy them back? I'll give you a suitable price..."

The main reason why Ronald agreed to meet with Redstone was that he wanted to sell this bad stock. Wall Street analysts could calculate the various assets owned by Viacom through accounting and conclude that this stock would not fall further.

But as an insider, Ronald knew very well that the so-called assets of Hollywood companies fluctuated greatly...

After all, this is probably the only place where even Wall Street's money can be defrauded. The money invested in movies has a poor return rate in the end. Whether it is investing in a blockbuster movie like Batman or investing in a winning director like Spielberg. The two seemingly safest Hollywood investments ended up losing money on paper.

"You have stocks worth 100 million?" Lei Shidong jumped up from his chair. His two golden caterpillar-like eyebrows suddenly stood up, and his whole body changed from the temperament of an old man to a murderous aura of his youth.

"When I acquired Paramount and Blockbuster, I suffered a lot of short selling attacks in the stock market. Was it you who did that?"

Lei Shidong is indeed a big player in the capital market. When he heard that so many stocks were concentrated in Ronald's control, he thought of being shorted. With so many stocks as the bottom, no wonder he dared to short himself with leverage...

"Of course, I did it. Sam, your merger caused your stock to drop a lot. If I don't short it, won't I lose money with you?"

Ronald said nonchalantly, picking up an orange, rubbing it slowly for a few times, and then began to peel it. Speaking of which, the fruits that Paramount gave to the top executives were really good. They were not ordinary commercial fruits with hard skins that were easy to transport across the country, but high-end fruits with thin skins and high moisture content that were easy to rot and could only be supplied to a limited number of customers.

"Why are you doing this?" Redstone stared at Ronald. He was most concerned about the controlling stake and would never tolerate the power falling into the hands of others. In order to control Viacom, he even promised the chairmen of the two acquired companies that he would spend more money to buy them out, even if it meant putting the new company into risks in the capital market.

How could he not be scared when Ronald suddenly said he had so many stocks? This was the amount he said, but was there more he didn't say? In the final analysis, the ability to quietly accumulate a large number of stocks was the most terrifying.

"Relax, Sam. I'm just trying to make money. I bought some Blockbuster stock, and it went down after you bought it. My financial analyst told me I could make some money by shorting it. They call it hedging. What's hedging?"

Ronald clapped his hands. The oranges were very juicy and delicious. He wiped his hands with a napkin and took another one.

"So you're just doing it for the money?" Lei Shidong's vigilance dropped a little. After all, the acquisition of two large companies would definitely cause the company's stock price to fall. If the SEC hadn't been strict, he would have been the one to short himself.

Anyway, strictly speaking, Ronald's money was not his own, but the money earned by those idiots in the market who were his counterparts and had no reason to be optimistic about Viacom. As long as they did not covet his shares, everything would be fine.

"Sam, you're putting me in a difficult position. If I sell these shares on the open market, I'm afraid the share price will drop a lot. Why don't we make an agreed stock transfer? You buy them back at a price slightly lower than the market price, and then cancel them. It's like buying back the shares. Isn't this the good news you want?"

Ronald smiled and told Redstone his thoughts.

Anyway, it is impossible for Viacom to perform miracles in its operations in the short term. If you want Wall Street analysts to say something good about you, you have to do something else.

For example, buyback is one of them. The company has funds in its account, buys back shares from shareholders, and then cancels them, which is equivalent to reducing the denominator and making each share more valuable. If Viacom is a well-run company, then this is a better move than dividends, and Wall Street is likely to raise its view on the stock.

But what Ronald is proposing is not the same thing. Viacom is in a very troubled situation. The company has a lot of assets, but not many of them can generate enough cash flow. If it buys back on the open market, it may backfire and make Wall Street disgusted.

Ronald proposed that in order to reduce the volatility of stock prices in the open market, the two of them should make an over-the-counter transaction and agree on a transaction price slightly lower than the closing price, so as not to make the SEC and shareholders dissatisfied.

At that time, Lei Shidong can do whatever he wants with these stocks.

However, Redstone is really in a difficult situation. If the cash in Viacom's account is used to make this equity transaction, and if the stock market has a negative view on this transaction in the short term and the stock price continues to fall, he will fall into greater trouble and may not even be able to publish the annual report at the end of the year.

"Can you accept payment in installments?" Lei Shidong hesitated. He wanted the deal, but didn't want to pay real money.

"Oh, for God's sake, you are so penniless now?" Ronald poked at Lei Shidong's pain point without any concealment.

Before the old man turned hostile, Ronald proposed a new idea, "In this case, I will find a new owner for the shares in my hand. I think you won't object, right?"

"Who is it?" Redstone's nerves became tense again. He couldn't eat it himself, and he didn't want others to eat it either. It would be better to let Ronald accept the installment payment and transfer it to him first. After the two shocking mergers, his own National Amusements (controlled by the Redstone family) also suffered a great dilution in its shareholding in Viacom. Although he still maintained control of the voting rights through the A/B share arrangement, he didn't want the shares held by small shareholders like Ronald to be concentrated in the hands of a big shark who could compete with him for control.

"Goldman Sachs, I plan to find a suitable person to exchange shares through them. You know, many people want your Viacom shares now, and there is no better time than today in history..."

Ronald finished eating the second orange and said to Lei Shidong with a smile showing his white teeth.

"Don't be ridiculous, who is it?" Lei Shidong certainly understood that the so-called Goldman Sachs was just acting as a broker, buying the stocks from Ronald and then exchanging them with another person who controlled stocks of other companies of comparable value.

The company that will get the stock in the end will not be Goldman Sachs, which never holds the stock for a long time. If Ronald mentions the names of any of his enemies, he will be angry. Even if he has to sell off his assets, he must control the stock in the right hands.

"Relax, Sam. I found the Bass family in Texas... and they just happened to be looking to sell some Disney stock..."

Ronald stopped teasing the old man. It was not good to make enemies for no reason.

After George Jr. became the governor of Texas, the Bass family also attended his celebration party and showed goodwill to the new governor, the eldest son of the old commander-in-chief.

George Jr. was also happy to show Ronald and the Bass family his extensive network of contacts. After communicating with the two tycoons from other states and this state, Ronald was surprised to find that they were important shareholders of Disney, one of the seven Hollywood companies.

They have invested in Disney since the 20s and were very happy with the stock price after Acenar took over. As of this year, their investment has risen significantly. As Disney's largest investor, their stock is worth about $ billion.

After enjoying considerable returns over the years, the Buss family is beginning to want to gradually sell out to make a profit. Coupled with the recent dismissal of Katzenberg by Eisner, they have doubts about the future stock price and are preparing to sell.

Ronald was not optimistic about Viacom, and the Bass family was not optimistic about Disney, but both sides had positive comments about each other's companies. Since the governor's victory party, the two began to hire lawyers and accountants, as well as middlemen like Goldman Sachs to negotiate the transaction.

Recently, the two sides have basically reached an agreement.

However, SEC regulations and a series of agreements regarding Viacom's acquisition of Blockbuster may require Ronald to ask Redstone for the price before selling. Otherwise, he may be investigated by the SEC, especially for such a sensitive stock exchange transaction. If reported by a major shareholder, there will be troublesome investigation procedures.

So Ronald took this opportunity to complete the procedure.

Redstone is not too worried about the Bass family. What they have done in Disney is very reassuring. They have not interfered with the management for ten years and are content to quietly gain benefits as an investor. Such people are the most suitable for someone like Redstone who has a strong desire for control.

Soon, the stock swap deal was about to be completed, and Eisner, who received the notice from the Buss family, also called Ronald.

"Ronald, what do you want?" Eisner's shares are much smaller than Redstone's, and he cares more about control than Redstone.

"On your side, Michael..."

"Hahahaha...good!"

(End of this chapter)