2003: Starting with Foreign Trade

Chapter 877 Secondary Listing
"Come to my place, let's get together. I need to talk to you about something!"

On September 30th, in a WeChat group created by Tan Jincheng, he tagged Shen Nanpeng, Xiao Ma Ge, and Kuang Ping, among others.

These people are all major shareholders of Orange Technology.

"What's going on? Is it related to the share reduction announcement you released today?"

"Hehe, you'll know when you get here. Make sure you have the time."

In an evening announcement, Nvidia shareholder Ocean Engine filed Form 144 with the SEC, disclosing its plan to reduce its stake in Nvidia.

Starting 15 trading days after the announcement, ByteDance plans to reduce its holdings of Nvidia shares through ordinary brokerage transactions.

The scale of this share reduction plan is not small. ByteDance plans to reduce its holdings by no less than 2000 million shares in batches within the next year, accounting for one-third of its total holdings.

The first phase of the share reduction plan involves 535 million shares, representing 1% of Nvidia's total share capital.

按照9月30日收盘日当天英伟达68.52美刀的收盘价计算，巨量引擎这一次减持高达13.7亿美刀，首批减持市约为3.67亿美刀。

He held the shares for four years without touching them, and then cashed out nearly 10 billion yuan in one go. This is truly unexpected.

Based on the cost of ByteDance's initial private placement, Tan Jincheng's Nvidia shares cost approximately $16.33, which was a premium at the time. For at least a year and a half, this investment resulted in a loss in terms of stock price.

The real "getting out of trouble" only began at the end of 2014.

Nvidia has a bright future ahead, but since Tan Jincheng's investment in the private placement, Nvidia has only gone from being plagued by troubles to getting back on track, nothing more.

ByteDance's proposed 10 billion yuan share reduction plan has caused quite a stir in the financial circles of both countries.

Just like when Tan Jincheng invested in Nvidia, this large-scale share reduction plan was also unexpected. In the eyes of Wall Street elites, Tan Jincheng had better options back then.

Now that Nvidia has gained momentum, the other party has surprisingly reduced its holdings on such a large scale.

On the giant screen in Times Square, New York, hung a large cover of Time magazine, featuring the young and handsome Tan Jincheng, a billionaire who has recently become very famous in North America.

He visited Microsoft, Nvidia, Tesla, and a large number of Wall Street investors, but nobody knows what he did.

However, one rumor is almost certain: two contacts with Lu Qi, the soon-to-be-departed Microsoft executive vice president, have led to new speculation in Silicon Valley about Lu Qi's future.

Although there had been speculation before, no one had included Orange Technology on the shortlist. Affected by this rumor, Orange Technology's stock price has performed strongly in the past few days.

The performance of Chinese concept stocks in 2016 was polarized. On the one hand, the trend of listing in the United States continued, while on the other hand, the sentiment of privatization and delisting was high. More than 30 Chinese concept stocks received privatization offers throughout the year.

Some of the more well-known privatizations include those of 360, Jumei, Focus Media, and other well-known companies.

Among the Chinese concept stocks that are trading normally, there is Yirendai, which is affected by the expansion of the fart industry, and Weibo, whose users are approaching 3 million, and whose market value has surpassed Twitter to become the world's most valuable social media platform.

Some pig farms have seen their annual revenue surge thanks to hit games like Fantasy Westward Journey and Onmyoji.

Among the poorly performing Chinese concept stocks are Orange Technology, Ali and Jingdong, and Pinduoduo's rapid rise. In addition, the difficulties faced by most vertical e-commerce companies have exacerbated market skepticism about the vertical e-commerce model.

Dongzi's negative comment about vertical e-commerce was amplified by the media in 2016. As early as 2011, he made sharp remarks about companies including Vancl, Suning, and Dangdang, and the years have proven his insight.

Orange Technology is currently the third largest e-commerce website in China and the leader in vertical e-commerce categories. Although Orange Products Club, with its traffic entry point, has no major operational problems, its growth is indeed sluggish.

"When the capital market thinks you're not good enough, it can be very ruthless in abandoning you."

What is Orange Technology's current market capitalization? Even with its recent strong performance, it's only around $70 billion, a significant drop from its peak market capitalization in 2014.

"That's just how the capital market is, but this presents a great opportunity for your plans, boss."

The news that Tan Jincheng brought back from North America shocked his think tank.

The boss actually managed to make it happen, despite the slim chance of inviting Lu Qi to join. In addition, the boss's restructuring plan for Orange Technology is also enormous. If the restructuring plan can be implemented smoothly, coupled with the transformation to artificial intelligence, then the future of Orange Technology is truly something to look forward to.

Why is Orange Technology's stock price under severe pressure? It's because expectations are limited, or rather, in the eyes of investors, Orange Technology has lost its appeal.

At best, it's just a self-sufficient vertical e-commerce website. Why would cold-blooded capital give it a high valuation?
“That’s right. Let’s all talk about this plan. According to President Lu’s idea, Dingding, Gaode Maps and TiMi Studio will be acquired by Orange Technology to create an Orange Group.”

"This plan is indeed feasible. It balances the interests of the shareholders and you, the boss, and also reduces the pressure on the controlling shareholder."

"Is the boss reducing his Nvidia shares based on this consideration?"

Before returning to China, Tan Jincheng gave an interview to Wall Street media at the airport, explaining that Nvidia's share reduction plan was based on the major shareholder's own funding needs. He gave the same explanation to the media after returning to China.

However, no one would believe that a billionaire with such healthy cash flow would be short of money. Just like Pony Ma, the king of cashing out this year, his explanation to the public was the same: Pony Ma cashed out more than 130 billion yuan in the past year.

Are Ma Huateng, ranked fourth on the list of China's richest people, and Tan Jincheng, ranked fifth, ever short of money?

Similar to Pony Ma's reduction of more than 13 billion yuan in holdings over the past year, Tan Jincheng's plans to reduce his holdings in Nvidia alone are approaching 10 billion yuan. It is highly likely that Tan Jincheng will be the king of cashing out in 2017.

It's worth noting that in addition to his plan to reduce his stake in Nvidia, Tan Jincheng also had a large-scale plan to reduce his stake in Tesla.

Despite the booming global electric vehicle market and increased subsidies for new energy vehicles in many countries, Tesla's performance on the US stock market in 2016 was disappointing.

The Tesla Model 3, released in March, was a huge success, causing Tesla's stock price to surge that month. However, in May, Tesla's first fatal accident occurred due to a technology upgrade, which triggered regulatory investigations and public scrutiny, leading to a significant short-term correction in the stock price.

After that, concerns arose about production capacity and financial situation, making the battle between bulls and bears for Tesla very obvious. Judging from the stock price trend, Tesla does not seem to have what a normal star company should have.

Their stock prices fluctuate wildly every day, with sudden surges and crashes, much like those small-cap, worthless companies in the A-share market that are manipulated by speculative capital.

If Tesla faced a life-or-death crisis in 2008, then in 2016, Tesla was also walking on thin ice during its expansion.

Musk's radical approach, unpredictable personality, and already less-than-popular persona on Wall Street mean that Tesla could face the risk of sudden collapse at any time.

Although the stock price is currently holding above $200, there are still many risks below that level.

Production capacity is closely related to financial condition. Without solving the production capacity problem, Tesla will not be able to convince the capital market. No matter how good Jack Ma is at hyping things up, he will not be able to maintain Tesla's stock price normally.

If you think about it simply, Wall Street's strategy is similar to that of LeEco. As long as the stock price keeps rising, they can maintain their position as the world's leading financial institution. Once the stock price collapses, they will be finished just like LeEco.

"We will start Tesla's share reduction plan after New Year's Day. I have discussed this with Musk and it will not affect our cooperation. In addition, he is also interested in building a factory in China, but he does not want a joint venture. We still need his help in this regard."

What the future stock prices of Tesla and Nvidia will be like is no longer important to Tan Jincheng. He only needs to sell off his shares according to his own needs, just like Pony Ma.

In addition to company operations, Tan Jincheng had other considerations.

In 2016, the capital market and enterprises, under the guise of going global, engaged in overseas investments in a state of utter chaos. The most arrogant of them all was Wang Jianlin, who had been elected the richest man in China for three consecutive years.

With a modest goal of 100 million, Wanda Commercial delisted from the Hong Kong Stock Exchange and plans to relist on the A-share market within two years. It has also made cross-border acquisitions such as Infront Sports & Media, World Triathlon Corporation in the United States, cinema chains and film companies in Australia and the United States, and invested in Atlético Madrid, among other overseas acquisitions.

With a net worth exceeding 2000 billion yuan, Wang Jianlin is now the richest Chinese person, employing as many as 11 people. Even Wang Jianlin's personal wealth has reached 60 billion yuan, making him incredibly successful.

The once-glorious Wang was naturally very arrogant. His actions of competing with the government for projects in Malaysia had a very negative impact, and his large-scale overseas acquisitions were also highly questionable.

Arrogance is a recipe for disaster. Although Tan Jincheng also increased his investment abroad, he was different from those companies, which were genuinely building factories and conducting business.

The reduction of holdings by the two major companies is a safeguard for Tan Jincheng. Through the restructuring plan of Orange Technology, he aims to bring the assets sold back to China or directly use various means to establish factories overseas.

In this way, they won't be accused of transferring assets.

Another point is that there are only two years left until the person who took office in 2018. That person is not reasonable. Given Tan Jincheng's current high shareholding in Nvidia, he will be forced to reduce his holdings at that time.

There's even a possibility that it might swallow us whole, which would be a huge loss.

It's okay if they reduce their holdings; they can just buy them back later through other, more covert methods, turning the situation from overt to covert.

"Since you, boss, have prepared so much financial support and found suitable candidates, I think that simply restructuring Orange Technology is not enough to maximize profits."

"Oh? What do you say?"

“I think we can take this opportunity to have a secondary listing on the Hong Kong Stock Exchange. This would not only be more beneficial to our restructuring plan, but the boss could also increase his control over Orange Technology by acquiring shares.”

“That’s right. Our market value is currently relatively undervalued. Now is the best time to list on Nasdaq and Hong Kong Stock Exchange at the same time. Having another financing opportunity will also help Orange Technology alleviate some of its financial pressure.”

"That's true. Only through multi-party collaboration can we increase the probability of a successful restructuring." "Besides, we can't let those greedy capitalists on Wall Street take all the benefits."

After the successful restructuring, Orange Technology will inevitably be revalued, and there is no reason for Wall Street to be the only one to profit. In addition, a secondary listing on the Hong Kong Stock Exchange will allow the listed company to be more closely connected with the domestic market.

After all, merging strategically important businesses like Dingding and Gaode Maps into the listed company means that Tan Jincheng has less control over these companies.

However, this would take longer.

Orange Technology meets the requirements for a secondary listing on the Hong Kong Stock Exchange, but the entire process is quite complicated. The planning stage alone, such as selecting a sponsor and intermediary team, conducting thorough financial and legal due diligence, and adjusting the company's governance structure, can take three to six months.

The subsequent review process takes six to nine months, and the issuance process takes one to two months.

Even at the fastest pace, it would take 10 months to complete, while the longest would take 17 months.

In other words, starting from now, it will be completed no earlier than July 2017 and no later than February 2018.

"Let's do it then, let's start preparing now."

After a moment's thought, Tan Jincheng made the decision immediately: the sooner we prepare, the faster we can achieve a secondary listing. The peak of the internet industry only lasts for a few years, so let's make a fortune while it's still at its peak.

October 1st, National Day.

"This house is nice, and quite quiet. Why did you invite us here today?"

"There are too many people at home, so it's quieter to talk business here."

During holidays and festivals, the old Tan family's villa is always bustling with people. In addition to work-related interactions, some close relatives from the Tan and Gu families also come to visit. The house is certainly lively, but it lacks privacy.

In recent years, Tan Jincheng's business in Beicang has expanded rapidly, and the number of employees has continued to increase. The original Shanchi residential area he built was simply not enough, so it is only natural to build more and more employee dormitories.

Throughout the Beicang District, the deep red factories and residential complexes of Shenzhou and the black and white factories and residential complexes of Weilai are everywhere. Because these two major employers have solved the housing problems of many employees, the price increase of Beicang District has not been so severe.

Tan Jincheng, along with Xiao Ma Ge, Shen Nanpeng, Kuang Ping, and others, are now at another villa of his in the city. It is located within his own residential community, separated from ordinary houses, and is conveniently located yet quiet and elegant.

Tan Jincheng and Gu Qingqing would occasionally come over to stay, just to have some peace and quiet.

"Is it going to be barbecue again? Although Ningbo is cooler than Shenzhen, this late summer heat is still unbearable."

While admiring the scenery in the courtyard, Brother Ma casually remarked that Boss Tan enjoys beer and barbecue, and his style of chatting and eating with his employees is already deeply ingrained in everyone's minds.

"No, why would we eat barbecue in broad daylight? Don't worry, you won't be shortchanged when it comes to food."

"Hehe, that makes things easier; tell me, what big thing are you planning to do by calling us all here? And what's going on between you and Lu Qi?"

Pony Ma also wanted to invite Lu Qi to join the company. He had spoken with Lu Qi several times and sent important company personnel to Silicon Valley to invite him. Tan Jincheng met with Lu Qi twice at Microsoft headquarters, which made him very wary.

Looking at all the people who came today, they are all major shareholders of Orange Technology. Could it be that Lu Qi really agreed to this kid's request, just like the rumors say?

Thinking of this, Brother Ma couldn't help but look at Tan Jincheng with some resentment. Why this kid?
"Haha, don't be in such a hurry. Look how calm President Shen and President Kuang are. You'll see soon enough. Come in and have some tea."

Lu Qi's plane was almost at Lishe Airport, where Li Yaohui and Zeng Jixiang were already waiting for him.

"We're anxious too, but if you insist on keeping us in suspense, there's nothing we can do."

Kuang Ping, Tan Jincheng's first investor, looked at him with a smile. It could be said that he watched Tan Jincheng grow up little by little. Back then, that young man in his early twenties treated him to an authentic river fish and farm-style meal in his hometown on the Mid-Autumn Festival.

He still vividly remembers that feeling and that scene.

"By the way, if I remember correctly, that place is called Six Households, right? When will Mr. Tan take us there again?"

Tan Jincheng didn't quite catch up with Kuang Ping's divergent train of thought and paused for a moment before saying, "Huh? Mr. Kuang is talking about the scenario of our first discussion about investment? No problem. When we both have time, you're welcome to visit my hometown. I'll treat you to some river delicacies."

"Then I'll look forward to it."

In recent years, Qiming Information's investments have grown larger and larger. Kuang Ping has had many opportunities to meet with Tan Jincheng, but there are not many opportunities for in-depth conversations anymore. For his first investment, he met with Tan Jincheng as a talent scout, or even as someone in a higher position.

But now that they are equals, it seems unlikely that they can go back to the same mindset they had back then.

"Hey, Mr. Tan is really good to you, Mr. Kuang. He treated you to authentic river delicacies the first time we met. Do you know what he did when he first talked to me about investment? He asked me for money."

“He would at least pay you back if he borrowed money. The first time he came to our company, he had his business cards secretly handed out and poached a lot of our employees. He’s gone for good.”

It's heartbreaking to think about this guy, Ma. He was so incredibly envious of Honor of Kings.

Today, Yao Xiaoguang, a key figure at TiMi Studio, was poached from Tencent, as were the game managers of Temple Run and Candy Crush.

It's inevitable for large companies to lose talent, but he's still a little unhappy that the people who leave have risen to such heights and even posed a threat to the company's business, and are constantly being criticized by the media.

Little Ma's constipated expression made everyone burst into laughter.

In truth, all of them had suffered some setbacks at the hands of Tan Jincheng, but the rewards they received from this young man were equally immeasurable.

Take Kuang Ping as an example. He made his name through investing in Orange Technology, and later established close business relationships with large investment institutions such as Sequoia Capital and Tencent through Tan Jincheng's connections.

The investment in Xiaomi Technology was also secured through Tan Jincheng's introduction. Now, they want to invest in Douyin, which has just gone public, and they will also need Tan Jincheng's help to make connections.

Needless to say, Shen Nanpeng has made huge profits through his deep investment in Tan Jincheng, from Orange Technology to Flash Technology, and then to Weilai, which has also extended his investment industry from the Internet to the real economy.

This is of great significance to Sequoia's investments in the country.

The group chatted idly for nearly two hours, drinking several cups of tea, but Tan Jincheng still didn't get to the point, which only made them more curious. Usually, when it came to serious matters, Tan Jincheng could finish in as little as five minutes.

Looking at the time, Tan Jincheng smiled and said, "We should be there soon, just wait a little longer."

It wasn't that he wanted to keep people in suspense; if he explained things to these bastards now, he'd have to repeat himself when Lu Qi arrived later. So, he figured he might as well keep them in suspense.

Less than 15 minutes later, some noise came from outside the courtyard.

"arrive."

When Lu Qi entered the study, the expressions on the faces of the men were varied, especially those of Brother Ma, whose expression was particularly interesting.

After exchanging greetings, Brother Ma smiled wryly at Tan Jincheng and said, "Congratulations, President Tan, on gaining another great help. Could you tell me how you persuaded President Lu to join us?"

Lu Qi was present at this highly private meeting; if they still didn't understand, they wouldn't even deserve to be called fools.

Although Tan Jincheng's invitation to this meeting seemed casual, the level of confidentiality was still very high. All the accompanying assistants were stopped downstairs, and security personnel were arranged outside the study and around the villa in order to ensure maximum secrecy.

"Perhaps it was Mr. Tan's high spirits that convinced me. After chatting with Mr. Tan in detail, I felt as if I had rediscovered the spirit of my youth. But speaking of which, Mr. Tan, you haven't discussed the issue of compensation with me yet."

Lu Qi answered Xiao Ma's question on behalf of Tan Jincheng. Of course, he wouldn't say that it was the phrase "to hell with BAT" and the decision to go all in on artificial intelligence that moved him.

"Huh? You haven't even discussed the salary? Then how about Mr. Lu reconsiders us?"

Tencent was the first to be eliminated, and Pony Ma's statement was just a joke.

"Hehe, Mr. Ma, stop playing tricks. Let's get down to business."

Unlike his previous two private conversations with Tan Jincheng, Lu Qi could clearly sense that Tan Jincheng's plan this time was more meticulous, and the balance of interests in all aspects was considered more thoroughly.

Clearly, this is not just empty promises; in fact, Nvidia's share reduction plan is actually in line with Orange Technology's restructuring and secondary listing.

"A secondary listing, huh? That's quite a big plan. This will completely change Orange Technology's valuation system. As expected, the media were right. President Tan is about to do something big again."

After hearing the whole plan, Kuang Ping and Shen Nanpeng were very excited, never expecting that they could make two birds with one stone.

"Dingding, Gaode Maps and TiMi Studio are such a golden egg. You're not exactly stingy, but when have you ever been this generous? Are there any other conditions?"

Clearly, Xiao Ma, who has deep business dealings with Tan Jincheng, understands him better. Any one of these three is a golden egg, and incorporating all three into the new system at once is definitely not as simple as he makes it out to be.

"Haha, of course, we can't let you guys take all the benefits."

(End of this chapter)