2003: Starting with Foreign Trade

Chapter 536 Expected Shareholding Changes in an IPO

Orange Technology was lucky, or rather, Tan Jincheng was really lucky.

This year's 315 Gala theme was "Power," but it exposed information security issues, mainly spam text messages and personal information leaks.

During the daytime live stream, Tan Jincheng repeatedly reminded viewers to pay attention to information security during the prize draw, a reminder that was brought up again as the theme of the 315 Consumer Rights Day approached.

"Haha, it must be in preparation for the real-name registration system for mobile phones."

The 315 Gala tonight is quite important for entrepreneurs. These days, it's very difficult to do public relations with CCTV. If they get exposed, they need to think about how to handle the crisis.

FlashCheer has many consumer brands and internet products under its umbrella, and Tan Jincheng cannot guarantee that any of these products will be problem-free.

"What do you mean? Real-name registration for mobile phones?" Gu Qingqing was a little confused. How could this thing be registered under a real name?
Only Tan Jincheng and Gu Qingqing were in the living room. Gu Qingqing leaned against Tan Jincheng's chest, feeling relaxed.

Tan Jinyue, who had been playing wildly at the company all day, was now asleep from exhaustion. Her mother was taking care of her, leaving the young couple alone.

"Oh, it wasn't explained clearly. It's about real-name registration for SIM cards. This exposure is probably in preparation for the implementation of real-name registration for SIM cards."

There's a motive behind everything, especially for a gala with such a huge impact. In reality, even after real-name registration, spam won't decrease; it's useless. Right now, spam doesn't know your name, but in the future, they'll know your name too.

"Let the company promote the topics I discussed about the giveaway in the live stream during the day. I was worried that this year's 315 Gala would affect our popularity, but it seems that it won't have much of an impact."

With a young child at home, Tan Jincheng has been paying close attention to the issue of infant formula. He learned from his sources that after the issue was suppressed in 2004, the problem of "big-headed babies" has become quite serious this year.

I was initially worried that the 315 Gala would expose this major issue and steal the spotlight from Orange Technology, as I recall the major breakthrough also occurred this year.

It seems their influence is extraordinary. No wonder they can make the local food safety bureau bow down and apologize. Four years have passed, and in those four years, many people have raised this issue, but it still hasn't come to the public eye.

Gu Qingqing recalled: "Those few sentences about safety reminders?"

"Yes, let's stir up some controversy and get involved with the 315 Gala. Also, let me emphasize that Orange Technology's data is very secure, so users don't need to worry."

From a businessman's perspective, Tan Jincheng is already a qualified businessman. If it were two years ago, he would have been angry and even felt sorry for the people because this matter could not be exposed for so long.

But things are not like that anymore. There are many injustices in the world, and many things cannot be solved by individual ability alone.

Tan Jincheng admires those who fight against a force on their own, but if he had to choose, he would never do it. In the absence of the ability, Tan Jincheng always believes that loving himself and his family should take precedence over social responsibility.

Gu Qingqing was speechless: "You really know how to ride the wave. You can find a little bit of anything, even the information security issue exposed by the 315 Gala."

This afternoon, the media has given full coverage to this novel live streaming experience. Orange Technology, which has received investment from several well-known venture capital firms and is currently going through the listing process, is not large in scale, but it can already be considered a regular player in the internet industry.

Since its inception, it has been a well-organized and stable company, and its actions have attracted much attention.

A simple online presentation is a procedure that all listed companies go through. Most of the time, they just use text to deal with the China Securities Regulatory Commission. No company has ever specially organized a live video broadcast for netizens for such a presentation.

There's absolutely no need for this if it's not for commercial purposes.

The media were looking for excitement in the live stream, hoping to find something to report. Tan Jincheng provided what they wanted. Professionals were interested in the underlying technology of live streaming, and even some streamers were lurking in the live stream to watch the excitement.

Supporting a live streaming room requires underlying technologies such as audio and video signal acquisition, encoding and transmission protocols, signal stability, and bandwidth handling. Not all companies can do these underlying technologies well.

Based on the technology accumulated from DingTalk development, the performance throughout the live stream was quite good. Ordinary people might not notice it, but those in the know would find it quite impressive, and it also provided a new understanding of the underlying technology of FlashDrive.

Not many people know that Flashpoint Group incubated DingTalk internally. Many companies have this kind of internal management software, and even if they know it, they don't pay much attention to it. Many peers just think it's Orange Technology's technology.

The hype surrounding 315 usually only lasts for a day or two. The day after the gala ends is generally the peak of its popularity, and after that period, very few people pay attention anymore.

After Gu Qingqing relayed the work assignments via DingTalk, the people working the night shift got to work.

The boss just gives a few words, and the subordinates run themselves ragged. "We're going to Beijing in a few days, shouldn't we pack our things?"

After the conference on the 18th, traffic management in the capital city was not so strict, making it much easier to enter Beijing. The two planned to start their three-stop roadshow in China from the capital city on March 19th.

Actually, there's not much need for a domestic roadshow anymore. The overseas roadshows have basically covered all the groundwork for this fundraising project, and the foreign investors are quite supportive of Orange Technology.

To some extent, Orange Technology can be compared to Tencent's smaller version, both of which use their gaming businesses to supplement their cash flow and accumulate users, and then use these resources to support their e-commerce businesses.

Pig farming also follows this model, and the success of these three companies has proven that this model is the best model for internet startups.

Domestic institutions may not be aware of how popular Orange Technology's mini-games and apps are on iOS and Android systems in Europe and America, but they have firsthand experience with them. Compared to China, it is much more difficult to copy overseas.

Furthermore, given the immense popularity of Happy Farm, Facebook is eager to introduce it. These kinds of mini-games are a game-changer for social networking sites, easily increasing daily active users.

The game provides cash flow to support Orange Products, and with the rapid expansion of the online shopping market, Orange Products' revenue may reach 100 million yuan by 2008, given the current growth rate of the online shopping market.

It's worth noting that Kaixin001 has over 90 million registered users, and its daily active users are incredibly high.

Once the problem of how to drive these 9000 million users to Orange Club is solved, Orange Club will take off.

The capital market views OrangePing as a vertical e-commerce company with the potential to achieve tens of billions of yuan in revenue in the future. Given the current pace of development in e-commerce, a price-to-earnings ratio of 20 to 30 times its current and future revenue is entirely justified.

Of course, capitalists want things to be as cheap as possible, and they can't just reveal their bottom line right away. This is a process of negotiation between the two sides.

“One advantage of listing on Nasdaq is that major shareholders don’t need to issue announcements as long as their share reduction doesn’t exceed 5%, and there are fewer restrictions. Do you think we should cash out a bunch of shares after we go public?”

According to the information sent back by Shen Nanpeng and others, as well as the subscription situation of domestic institutions, the public shareholding of Orange Technology after listing should be between 20% and 25%. Lao Mi does not have many requirements, but Boss Tan wants to sell more.

After dilution, Gu Qingqing's shareholding will inevitably drop below 5%. Theoretically, Gu Qingqing could liquidate her entire stake and run away on the first day of listing without any restrictions.

In reality, Liu Xiaoli underestimated Gu Qingqing's wealth. During the Series C funding round, Gu Qingqing cashed out 1.6 million yuan. Based on current institutional valuations, if she were to liquidate her entire portfolio after the IPO, Gu Qingqing's personal assets would be at least 4 million yuan.

If the stock price surges dramatically on the first day of listing, 5 million is not impossible.

An investment of 300 million yuan yielded 5 million yuan in less than three years, which is a remarkable achievement in the investment world at any time. However, the biggest winner is undoubtedly Tan Jincheng.

Based on the information gathered so far, after Orange Technology went public, the Tan Jincheng family's shareholding ratio will still be between 30% and 33%, and they will still have firm control over the company.

Normally, at the time of an IPO, the founders can maintain firm control over the entire company if they retain more than 25% of the shares.

It's so great to do your own venture capital without involving investment companies; you get to keep the biggest portion of the profits yourself.

"By the way, did he agree to contact Jay Chou to be the chief promotion officer for Orange Products Club, as you mentioned last time?"

"We're still talking about this. This guy is so famous right now, and he's working incredibly hard. We can't seem to schedule a time to talk about this. I don't know if we'll be able to get a time to meet in Beijing this time. He's going there to record a song."

Last year, Lao Zhou left Lao Wu and started his own music company. It has to be said that the reason he can make so much money more than 10 years later is thanks to his father, who firmly controls his music copyrights.

There are too many amazing singers these days. Some, like the three giants of QQ Music, are already very popular, but because they don't value copyright, a lot of the revenue doesn't go to them. In fact, after leaving the company, they can't even sing many of their own songs anymore.

Among the more well-known ones that Tan Jincheng knows, there are Wang Sulong and Zhang Wei, who have suffered terribly from copyright infringement.

"With someone this famous, is it possible to get a deal?"

"Let's give it a try. I can't guarantee anything. If it doesn't work, we'll find someone else."

If all else fails, we'll just use Xiao Liu. She's destined for stardom, and she's cheaper than Lao Zhou.

(End of this chapter)