We are all reborn, who wants to be the richest man?

In October, the Far East Group held a high-level meeting.

"Tell me what you think. I want to hear your opinions."

Sitting in the first seat, Luo Nianzhong and his son came together to hold an emergency meeting of the group's top management.

For Luo Nianzhong now, he rarely participates in the management of the group, and most of the time he leaves the operation of the group to professional managers.

The reason for this happening this time is that one of the proposals was too controversial.

One faction is led by COO John White and Far East Chip CEO Zhang Rujing, and the other is centered on CFO Chris.

The reason is very simple, that is, whether Far East Chip will split its stocks.

In August, the market value of Far East Chip exceeded US$8 billion, which was a cause for celebration, but it was overshadowed by another guy.

This guy is Microsoft, which has taken the throne of the world's largest market value with a market value of US$1461 billion, US$142 billion more than Far East Chip.

The wheel of history has changed. Thanks to Luo Nianzhong's promotion, the Internet has developed better and Microsoft's market value has grown faster than in history.

There are also victims, and that company is Welch’s former employer, General Electric.

I remember that this was the time when General Electric should have been soaring and leaving its competitors far behind, but without Welch, this glorious period turned to dust.

It’s not that General Electric must have Welch, there is just some gap, which shows the role of a legendary professional manager.

I remember that at this time in the previous life, General Electric's market value should have been at least over 1500 billion US dollars, but now it is only half of that, with a market value of 867 billion US dollars.

His throne was also taken over by Microsoft, but American companies still have the highest market value in the world.

The reason why Microsoft is developing so rapidly and its market value growth momentum has not weakened at all.

First, the Internet market is now crazier, and second, Microsoft's business is stronger than the same period in the previous life. The hardware department that Microsoft has been thinking about has developed very well because of its relationship with IBM. The most important reason is that the stock split was completed more than a month ago.

From the announcement in June to the full stock split on September 1 to now in October, Microsoft's market value has increased by more than $ billion, and this momentum continues.

Seeing the benefits of stock splits, a group led by Chris also proposed splitting Far East Chip's stocks to increase liquidity.

However, this was strongly opposed by John Baibo's faction. Not only the parent company Far East Group, but also Far East Chip were clearly opposed on this issue.

The localists opposed it, but the British and Wall Street forces among the shareholders strongly agreed with it and they stood on Chris's side.

“My reason is very simple. The current market value of Far East Chip is too large and the value of a single share is too high. Most shareholders simply cannot afford it.

This would make the stock's liquidity too poor and depress Far East Chip's market value.

After the stock split, it will attract more shareholders to buy, and the market value of Far East Chip will be higher."

What Chris said is correct. The market value of Far East Chip is still increasing and has reached 1338 billion US dollars, which is equivalent to 10436 trillion Hong Kong dollars.

What is the total share capital of Far East Chip? It is still one billion shares. It has not raised funds and issued new shares in the stock market for so many years.

So one share of Far East Chip is now worth more than HK$1,000, and a lot of 100 shares is worth more than HK$100,000.

This price is very stressful for many ordinary Hong Kong citizens. Although they are optimistic about you, it is impossible for them to bet their entire fortune to buy you.

This has resulted in Far East Chip becoming less and less active in the Hong Kong stock market, with many of its shares being held by institutions for a long time.

If we follow Chris's suggestion and split the stock ten-for-one, then one lot of Far East Chip will cost more than HK$10,000. This is not a burden for many Hong Kong citizens, and they can buy one or two lots as heirlooms to keep as ballast.

As more people buy, the stock liquidity increases, and Far East Chip's stock will naturally rise.

The company's total assets have not changed, but its market value has increased. This is a stock split. No wonder Buffett said that stock splits are just playing rogue.

After listening to Chris's explanation, Luo Nianzhong's expression did not change at all. He thought for a moment and looked at John Baibo.

"Tell me your reasons."

“Our reason is simple, stability is above all else.

Far East Chip is the leader in the chip industry. As long as we focus on technology, we will be invincible. There is no need to engage in things that are only superficial.

Semiconductors are an industry, not finance, and their development depends on the long term.

Stock split? I would prefer a reverse split."

There are two types of stock splits, positive and negative.

A positive stock split is what Chris called splitting one into several, so the share capital increases.

The reverse is just the opposite, where a few shares are split for one, resulting in less share capital.

John Baibo's words made Luo Nianzhong laugh.

"If it is really a reverse stock split, I guess there won't be a single transaction of Far East Chip's stock for several days."

Currently, there are only a few transactions in Far East Chip's stock in a day, but when you see it, it's basically a big transaction.

There are very few of these stocks in the hands of retail investors now, and those who do are unlikely to sell them.

Most stocks are in the hands of institutions all over the world. They trade in dozens or even hundreds of lots, and the funds involved start from tens to hundreds of millions of Hong Kong dollars.

If it really is a reverse stock split, it would be really fun, but Luo Nianzhong would definitely not do that, he would just smile.

After laughing, Luo Nianzhong considered John Baibo's words.

There is one thing that is certain, that is, the stock split will cause great instability to Far East Chip, which is also the negative impact of the stock split.

Listed companies such as Berkshire Hathaway and Moutai later insisted on not splitting their stocks, which made the value of each share of their stock so exaggerated.

The reason is that these companies believe that attracting more retail investors is not conducive to the development of the company. John Baibo now holds this view.

“The entry of a large number of retail investors can indeed increase the liquidity of Far East Chip’s stocks, but most of these retail investors lack judgment.

These people are more short-sighted, more anxious to make money, and less able to understand the company's value, which will affect the long-term stock price fluctuations of Far East Chip.

But now it is different. Far East Chip's stocks are concentrated in the hands of institutions. Their goal is to outperform inflation and they have better vision and judgment, making it easier for Far East Chip to make long-term plans.

There's nothing wrong with that. A truly good company doesn't need to attract so many retail investors, or so many people without strong capabilities to enter the market.

Many great companies have achieved legends through a single product, which requires long-term layout and planning by the company, especially in the semiconductor industry.

There was silence, with only the sound of Luo Nianzhong's fingers tapping on the table echoing in the conference room.

This is a habit of his. When he is thinking about something important, his fingers will tap unconsciously. All the senior executives in the Far East are aware of this.

The sound of the tapping seemed to be knocking on their hearts.

They knew very well that no matter how much they argued, the final decision would be in this person's hands.

This is not just a matter for Far East Chip, it concerns the entire Far East enterprise system.

There are many companies in the Far East system that have high market capitalization but small stock circulation, like Far East Chip. Far East Chip can split its stocks, and most of the Far East system companies will do the same in the future.

"Da" the knocking stopped, and Luo Nianzhong finally raised his head.

"Go ahead and split it, I agree to the stock split."

As soon as the voice came out, some people smiled while others hesitated to speak.

From the perspective of long-term corporate development, Luo Nianzhong does not agree with stock splits.

However, Luo Nianzhong was very concerned about what Chris said just now, which is that most investors simply cannot afford it.

This is the case with Far East Chip, as well as other listed companies such as Honor Computer and Watsons Beverages.

Hong Kong Island is the base camp, but what is the purpose of Far East Group’s large number of companies listing on the Hong Kong stock market?

In addition to making the Hong Kong stock market larger, another point is to make Hong Kong citizens wealthy by following the Far East Group.

Now most Hong Kong citizens cannot afford to buy Far East Group’s stocks, and those institutions are the ones who profit from Far East Group companies. This is the fundamental reason why Luo Nianzhong agreed to the stock split.

As for the issue of stability, Luo Nianzhong felt that it was not something to consider.

Judging from the current market value of Far East Chip, even if it is split tenfold, the price of a single share will still not be low. This will greatly reduce the instability phenomenon. At least those who can afford it are the middle class.

Since Luo Nianzhong has made the decision, the senior executives have nothing to say.

They still believe in Luo Nianzhong.