2003: Starting with Foreign Trade

Chapter 734 Wall Street Connections
冷知识，2003年7月1日创立的特斯拉，上市时间是2010年6月29日。

It has been exactly seven years since its establishment and listing.

Last December, they applied for a low-interest loan of $4.65 million from the U.S. Department of Energy, which was subsequently approved in January of this year. This was a lifeline.

Without this money, they probably wouldn't have survived. As for going public, it's mostly because they don't have the funds.

"If you want to list on Nasdaq, Tesla is actually a good reference. You might even get a higher valuation than Tesla because you have a gasoline-powered vehicle business."

In a coffee shop on Wall Street, Shen Nanpeng stared at the young man he hadn't seen in a long time and told him with a smile.

"Wall Street doesn't seem to have much faith in Tesla, does it? The stock performance has been quite mediocre. If we were to propose an IPO at this time, we'd be at a disadvantage."

With an offering price of $17 and a market capitalization of $15.8 billion at the time of its IPO, the stock performed quite well on its first day of trading, closing at $23.89, up 40.53%. However, after reaching a high of $30.42 on the second trading day, the stock price fell for five consecutive trading days.

The stock price hit a low of $14.98 in the six trading days after its listing, which is below the issue price and can hardly be considered a good performance.

"Now that its performance has stabilized, it's the first new energy vehicle company to IPO in the US. Isn't that a tempting title?"

"Haha, no rush, let's wait until our first real new energy vehicle hits the market first."

Keep bluffing, you've really stabilized. Before coming here, Tan Jincheng checked the closing price of $20.64 on the previous trading day, which was only a little over 20% higher than when it was listed.

With a market capitalization of less than $20 billion, if Weilai were to go public now, its performance might not even be as good as Tesla's.

Clearly, the concept of new energy vehicles is not yet widely accepted by Wall Street, and Mr. Tan doesn't want to let these capitalists benefit from it.

In his mind, Weilai Motors is more valuable than Tesla at this stage.

Tesla is a well-established brand, but Tesla cars are not. What do they have? Just a sports car that costs $10.9. As for solar panels and energy storage devices, those are things that can be made by Tesla.

Musk is a celebrity on Wall Street. His homegrown new energy vehicle company, the first American automaker after Ford's IPO in 1956, still doesn't get much attention.

"Haha, alright, you don't have to rush if you don't want to go public for now, anyway you don't have to worry about going bankrupt."

Shen Nanpeng laughed. He only mentioned it at the company's request, and he didn't really think that it was a bad time for a car company to go public. Internet companies were the most popular on Nasdaq.

The sports car, priced at $10.9, had a manufacturing cost of $14. Due to uncontrolled costs, the company was on the verge of bankruptcy, and then the subprime mortgage crisis of 2008 hit. 2008 and 2009 were really tough for President Obama in the United States.

The board of directors was divided, the other two founders left, and after Musk took over as CEO, he sought help from Daimler, selling 10% of the shares for $7000 million and becoming a supplier to Toyota.

He also had to put in his own $6000 million to barely keep the company afloat.

"That's what they say, but if I go bankrupt, I'll really go bankrupt. He won't go bankrupt. Look how timely that $4.65 million came."

"Haha, you're right. This is Wall Street, this is America. They value connections even more than people in China."

That's right. No matter how bad the A-shares market is, it's impossible for a company that was bankrupt in 2008 and was still seeking loans everywhere in 2009 to go public in less than six months after receiving a loan.
It's ostensibly about letting investors enjoy the benefits of a company's growth phase, but in reality, it's just a scheme orchestrated by a few big players, leaving the secondary market to foot the bill.

While growing big can bring huge profits, many companies fail to grow. For example, Jia Yueting, who is still successful in China, also set up a listed company in the US after going abroad, purely to fleece investors.

“Our company has also done some research on Tesla. Mr. Tan is here to negotiate on patents. However, I suggest that Mr. Tan make some investment in their equity, which would make the negotiations go more smoothly.”

"Although this company seems quite unreliable at the moment, it has to be said that it does have some technical expertise. Its batteries, motors, and engines are all quite good. In addition, equity investment can also deepen the foundation for cooperation."

Tan Jincheng nodded. Even a starved camel is bigger than a horse. Even though the American auto industry suffered a major blow in 2008, its accumulated experience is still something we can't compare to.

"Is this your idea or your company's idea?"

"That's my point. Wall Street isn't necessarily pessimistic about Tesla, it's just that they haven't given it a good positioning yet. Mainly, Musk is a rather abstract person."

"Alright, I'll invest a little. I'm not short of money, but I don't know if Old Ma in the US will be willing to accept it."

"Haha, he'll definitely accept it. This guy is really short of money right now. Besides, you guys also have patents, right? If you invest, you can share the patents. There's no reason for him not to accept it. If needed, I can act as a go-between."

"That's best."

Musk is a maverick with a powerful background. Even if you knock him into the mud, he can always get back up. It's unclear what will happen when China's new energy sector gains its own entry into the market.

However, Tesla will definitely succeed as it did in its previous life. Shen Nanpeng's so-called unclear attitude from Wall Street is not a problem for him. Investing in Tesla is a sure thing.

Tesla's current market value is less than $20 billion, meaning it's already making a killing even without considering technological collaborations.

Investing in or acquiring foreign car companies can be complicated procedurally, but fortunately Tesla is a publicly listed company, and Tan Jincheng also has overseas investment companies, which can save a lot of trouble.

If this were in China, it would require approval from departments like the National Development and Reform Commission.

Setting up an investment company in Hong Kong back then was such a brilliant move. It made investing so much easier in many situations.

"In that case, I'll make the arrangements. We'll go to Texas together in a few days. You can stay on Wall Street for a few days first."

Shen Nanpeng's enthusiasm is not without reason. Hongshan is a major shareholder of Weilai, and it is one of the responsibilities of a shareholder to connect Weilai with resources.

"You go ahead with your work. Let me know when the time is set. I still have to meet with a few friends."

The other team members had already gone to Texas. He came here partly to meet with Shen Nanpeng, and partly to meet with Li Bing to ask about their IPO progress.

For so long, Tan Jincheng has not paid any attention to their specific IPO process.

Shen Nanpeng asked curiously, "The one from Yiche.com? Li Bing?"

"Yes, what acquaintances do I have here? They're just some founders or investors of listed companies in China."

"Haha, their IPO is having some trouble, but listing shouldn't be a problem. It's just that your investment probably won't make any money."

Shen Nanpeng is quite well-informed. Yiche has come to Wall Street many times. They want to list on the NYSE, which is a little more difficult than listing on NASDAQ.

Furthermore, among the three major domestic automotive websites, Yiche is truly no match for Autohome. Although it has developed quite well since its establishment in 2000, it has never been able to beat Autohome.

Furthermore, in the first quarter of this year, Yiche.com's profit was only 10 yuan, a decrease of 99%. Such a large drop in profit during the IPO process is very unfavorable.

"I've heard a bit about it, but when I invested, I wasn't after profits. I was drawn to its media resources. It's not that Autohome didn't want to invest, it's just that they couldn't."

Ultimately, Li Bing's backing wasn't strong enough. If his backing were as strong as Autohome's, none of this would be a problem. At least Bitauto is still profitable, and a profitable portal website is already quite excellent.

As for the sharp decline in profits in the first quarter, there are many reasons for this. One reason is that the cars sold so well that there was less advertising.

That's right, they're selling too well. It's a complete seller's market. Even slightly in-demand models can command a premium, so there's no worry about selling them. Plus, the first quarter is during the Spring Festival, so advertising spending is also reduced.

Secondly, the increased operating costs of the website in its IPO push have impacted profits, but these are not major issues.

The only disadvantage is that it cannot monopolize the market. The internet is essentially a monopoly, and Autohome would have an easier time achieving a monopoly than Bitauto, both in terms of traffic and backend infrastructure.

But what does this have to do with Tan Jincheng?

The PC era is almost over. In the next few years, having one more media outlet is enough. When the mobile internet era arrives, we can find new outlets. As for making money, as long as the company goes public, there will definitely be opportunities to make money.

It doesn't matter if he loses money; his return on investment doesn't necessarily have to be measured in monetary terms.

Li Bing has been through many trials and tribulations over the years. After Yiche went public, he became more shrewd and his network of contacts expanded significantly. Even without Wei Lai, he would still create other brands and continue to run his car brand.

"Do you need my help? Let's make this clear first: if I help, I can only use my personal resources and connections. The company hasn't invested, so I can't use the company's resources. I don't know if it will be useful."

"Thank you, but I don't need it for now. I'll contact you again when I really need help."

Whether Yiche.com can go public or not has little impact on Tan Jincheng; he's really not in a hurry.

From a purely self-interested perspective, the failure of Bitauto's IPO is actually a good thing for him, as it might give him a chance to acquire Bitauto directly. The most regrettable thing is that Autohome didn't get a chance to get involved; when did their major shareholder change again? Let's wait and see.

As for Pacific Auto Network, forget it. We might as well wait and see if Dongchedi, the "son" of Douyin, has a chance to get involved. That's the real awesome car channel.

Forget it, let's wait for Xiao Zhang's fifth startup, it should be coming soon.

Shen Nanpeng glanced at Tan Jincheng, said nothing more, greeted him, and left. He was very busy right now. After the subprime crisis, Sequoia Capital's business in China expanded rapidly, with success in both the internet and promising physical sectors.

This man, who claims to have bought up half of China's internet industry, created three female billionaires in 2007 alone, but he is also quite capable in terms of entrepreneurship.

He co-founded Ctrip and Home Inns with others. His most impressive achievement in 2009 was helping the founder of Sina complete the acquisition of Sina.

Having previously worked at Home Inns, he has also invested heavily in the physical retail sector, always making quick and decisive moves. In 2007, he ventured into e-commerce, and in 2008, he entered the film and entertainment industry.

He invested in many cloud computing and big data companies in 2009, and this year he has started to lay out O2O, keeping him extremely busy.

Speaking of this, we have to mention Tan Jincheng's cunning. Unlike Shen Nanpeng, who was very generous, Tan Jincheng simply wrote down the cloud computing companies that Shen Nanpeng had invested in. He would write down the ones he remembered and wait for the next round of financing, while he would ignore the ones he didn't remember for the time being.

In 2010, cloud computing was far too advanced, and it was uncertain whether it could survive. Shen Nanpeng had money and wasn't afraid to invest in everything he saw, but he couldn't afford to play the game.

In addition, many company names and founders are different from what I remember, so I don't know if they are later companies.

After sitting there for a moment, Tan Jincheng got up, dusted himself off, and went back to the hotel.

"I wonder how Lao Yu and the others found their visit to Tesla."

Wei Lai's trip to Tesla was public and reported. Led by the founder and two leaders of the research institute, it was quite a large-scale event that attracted considerable attention in China.

With half of 2010 gone, the basic structure of the car market is becoming clear. Japanese brands and Toyota are the biggest losers this year. Apart from Suzuki, the sales of the five major Japanese car manufacturers have declined significantly.

Honda and Toyota have the largest production cuts, with Honda cutting production by nearly 50% and Toyota by more than 60%. According to market forecasts, even if they catch up in the second half of the year, the overall sales of Japanese brands will still decline by about 30%.

The market share vacated was mainly divided up by German brands and domestic brands, with German brands being the biggest winners, followed by domestic brands, but this does not include Dizi.

Just as July began, BYD's Senior Vice President and General Manager of the Sales Company, Xia Bing, publicly addressed dealers to stabilize their emotions, while also lowering this year's sales forecast from 100 million vehicles to 60 vehicles.

This is the beginning of admitting defeat. There's nothing they can do. At the end of last month, some distributors had already put up banners in front of their company. After several months of fermentation, the withdrawal scandal has not only failed to cool down, but has instead shown signs of intensifying.

Dizi's actions were really baffling to Boss Tan. Instead of reassuring dealers and rebuilding the distribution network, the information released to the media was about exchanging accusations with the J-series independent brands, alleging that they were sabotaged by the other party.

Admittedly, the J brand's incentives (600 million RMB per store) and the unsecured credit sales of 300 million RMB worth of new cars are indeed quite outrageous. However, it's impossible for a group of people to blindly withdraw from the network just because of one brand's promotion.

Which 4S store owner doesn't have some local connections? If we disregard reputation, would they really be short of 600 million yuan? This attempt to divert attention is rather clumsy; besides providing the media with more juicy news, it has no other effect.

There are only a handful of domestic brands with the "J" prefix, and only two of them can compete with Dizi. Neither of these two companies has responded at all.

Pig Farm Auto Channel, which has been following this incident, contacted some of Dizi's dealers. Most dealers had different attitudes toward the email. One dealer in the southern region believed that this was just one way to divert attention.

However, he also believes that Dizi must have realized the real crisis, because in the past she would ignore them and threaten them by deducting their deposits.

Tan Jincheng doesn't know if the J-series companies offered such generous rewards to poach dealers, but in his opinion, there was definitely some hype involved, but such generous offers are unlikely.

Of the two J-series car companies implicated, one is a state-owned enterprise, which is unlikely to do such a thing, while the other recently acquired Volvo and is busy integrating Volvo's technology and selecting a site to build a factory.

From a timing perspective, it's not very credible. Tan Jincheng knows that for a long time after Volvo's acquisition, Geely faced significant difficulties due to issues with acquisition funds and technology assimilation.

They might try to stir things up, and they might be able to poach one or two companies based on the conditions revealed by Dizi, but do they have the money for large-scale poaching?
Goodness, over 300 distributors have left the network, with each receiving 900 million yuan in rewards and credit. It was all done by companies with the "J" prefix. How much money is that? Does Mr. Li have that kind of money right now?
This is probably why Dizi doesn't dare to name names directly. If there were real evidence, why use the letter J instead? Just reveal it directly.

In short, it's certain that he stabbed you in the back a couple of times, but it's impossible that he stabbed you every time. The main responsibility lies with Dizi for not handling the relationships with distributors, the media, and even customers properly.

Well, the F3 is actually quite lousy. Tan Jincheng really doesn't understand why it sells so well. But precisely because the sales volume is so high, the problems also increase. If the quality can't keep up, customers will naturally be unhappy.

As for the media, the pig farm's car channel has been keeping a close eye on Dizi for the past few months, releasing some scoops from time to time. Tan Jincheng really suspects that Brother Boatman has offended Lao Ding to death.

Damn it, they've been following this incident for three months and they're still relentlessly pursuing it. What kind of grudge do they hold against us, or are there no other news reports in the car market?
However, Dizi's public relations department is really bad. They haven't been able to secure the NetEase Auto Channel after three months. Someone has to take the blame for this.

"I guess Xia Bing is close to leaving soon, right? Boss Ying is going to take advantage of the situation."

With such a major crisis unfolding in the company and remaining unresolved for so long, it's clear that senior management can't shoulder the blame. The car sales company manager is the perfect scapegoat.

"Mr. Tan, you have no idea how painful it is to deny yourself; sigh, you should just focus on the internet."

The night on Wall Street was still a scene of extravagance and debauchery, but all of this seemed to have nothing to do with Li Bing, who had rushed over. He wolfed down the steak on his plate.

After securing several rounds of investment, Li Bing made many attempts, including acquiring the largest automotive program producer in China, launching programs on 200 radio stations, and publishing magazines. In short, he was constantly tinkering with various ventures.

It turned out that the money had been spent, but to no avail. Tan Jincheng had told him when he invested that he should spin off all the miscellaneous parts and focus on developing the iOS client.

It's already 2010, and you're still running a radio station and publishing a magazine? What a joke!

"Haha, it's slowly getting better, as long as you correct it in time."

After speaking, Tan Jincheng handed Li Bing a gift box, which Li Bing asked in confusion, "What's this?"

"A watch. We Yicheng people have a tradition of celebrating our 36th birthday, so this is my 36th birthday gift to Mr. Li, to bring him good luck."

In Tan Jincheng's hometown, 36 years old is no less than a 60th birthday, and it is highly regarded, regardless of gender.

"Huh? A Rolex? I've never seen this model before."

Born in 1974, Li Bing is still single, a true bachelor. Before Yiche went public, he was hardly a eligible bachelor and didn't have much money.

He currently drives a used Audi A6, and he doesn't really know much about luxury goods.

Li Bing couldn't wait to open it. He didn't expect that Tan Jincheng would remember his birthday and even prepare a gift.

"The green Submariner is a new model released this year. It's not worth much money. Consider it a belated birthday gift for Mr. Li. I hope you won't mind."

It's not really worth much money, at least for Tan Jincheng. He's still wearing the Longines he bought with Gu Qingqing, though he has quite a few luxury watches in his collection.

The green Submariner became quite famous in later generations, and it was a new model. When Tan Jincheng was picking out a gift for Li Bing, he saw it and casually bought a few, intending to take them back as gifts.

"Haha, that's for you, Mr. Tan. I can't afford this thing. Anyway, thank you. I didn't expect you to remember my birthday."

After saying that, he put it on himself and shook it, jokingly saying, "I hope no one will think this thing is fake?"

"Even if you wear a fake one, no one will think it's fake. Don't worry, you'll be financially independent in a few months."

Tan Jincheng knew that Li Bing didn't have much money. Even though he had been an entrepreneur for more than ten years, he had basically been swindled by others. When his companies were thriving, they would either inexplicably go bankrupt or be forced out of the business.

Take Dangdang for example. When he was doing well with Uncle Guoqing, Uncle Guoqing brought his girlfriend into the business and they started their own business together, so he was no longer involved.

Dangdang.com is also rushing to go public this year, and is expected to go public in December. As one of the founders, he only retained 1% of Dangdang's shares.

One percent of the shares of the largest online bookstore in China is certainly a lot, but for the second employee and one of the co-founders, that number is really insulting.

"Hey, speaking of going public, I'll have to trouble you, Mr. Tan. Could you introduce me to a few people?"

Orange Technology is a Nasdaq-listed company, and Tan Jincheng knows a few people on Wall Street. In addition, Li Bing can also consult him on some procedures, which is why he rushed over.

In addition, Orange Technology set a record for the fastest IPO in China, and he hopes that Bitauto can go public as soon as possible.

Both the company and he himself were desperately short of money.

(End of this chapter)