Baidu's listing is one of the landmark events in the recovery of the US stock market. After entering the new year, Amerika gradually emerged from the haze of last year, and the capital market became active again.
Baidu went public because there were many senior executives from financial institutions, and it was also a rare social occasion for Zhou Xin.
If only considering him personally, Zhou Xin does not need to please or engage in any unnecessary social interaction, but from a corporate level, Xinxin Technology needs to rely on the power of Wall Street in many aspects.
"Jerrel, long time no see. Are you in charge of Baidu's listing again?" Zhou Xin asked.
Jerrel is the vice president of Goldman Sachs. Of course, Goldman Sachs has hundreds of vice presidents, and he is considered a relatively high-ranking vice president among them. Otherwise, he would not have been the person in charge of the listing of Riot Games before.
Jerel said in a flattering tone: "Yeah, we haven't seen each other for about a year.
The last time we met was when NewPay raised funds for the second time. One year has passed in the blink of an eye. NewPay’s growth rate is far beyond each of our imaginations. It’s a genius idea to scan the QR code to collect patterns and share tens of millions of dollars equally.
After getting used to QR code payment, I am increasingly unable to leave my iPhone in my daily life. Even if I forget to take my iPhone with me when I go out, I will feel as uncomfortable as having an anxiety attack.
The only drawback of the Mphone is its insufficient battery capacity. The first thing I do after arriving at the company every day is not even to turn on my computer to check emails. Instead, I check emails directly on the Mphone's M-mail and reply directly on the Mphone.
Technology is developing so fast. How did Mphone achieve a mobile phone keyboard that is even better than a computer keyboard? Nokia also gave me an iPhone. The experience of using the iPhone is completely incomparable to that of the Mphone. "
Sometimes when you praise someone, you must not just talk about the advantages. Just talking about the advantages will seem a bit fake. Jerel knows this truth well.
Zhou Xin did feel proud after listening to it, because the Mphone was completed with a future perspective, but there are many things in it that need to be compromised and transformed. After all, it is not a complete screen, and it is very challenging to operate. Product design skills.
Being able to become popular all over the world, Zhou Xin feels that this also proves that he has a little talent in product design. At least with the blessing of having a vision that leads the world for twenty years, he can create good products.
"We have been investing in research and development funds in the battery field. Before the Mphone was launched, we signed a five-year research and development cooperation agreement with Panasonic.
We and Panasonic invest US$100 million in battery research and development every year. We share patents and hope to extend battery life.
In fact, more than half of the volume under the Mphone screen is the battery, which seriously affects our ability to make the phone more designed and futuristic. "
Panasonic has an 80-year development history in the battery field and has always been an important player in the battery field, including Tesla's earliest choice of Panasonic batteries.
After hearing this, Jerel applauded, because Robin was still on stage talking about the importance of Baidu's listing and what it meant to him. He used applause in the audience to flatter him. Even if Robin saw it, he would think it was him. Applaud him.
"This is the best news I have heard today. Companies that use technology as their selling point will inevitably continue to invest in research and development during their operations. If the company's cash flow is not good enough, it is easy to fall into the trap before achieving breakthroughs in research and development. Dilemma.
I believe that with Newman's strength, Matrix will never encounter such a situation. In addition, Mphone is very popular around the world. Last year, more than five million units were sold. With the fermentation of word-of-mouth and popularity in Europe and Asia, After its release, Mphone sales this year are expected to exceed 10 million.
Coupled with the high price of Mphone itself, Matrix does not need to worry about cash flow issues at all. So in reality, we always encounter this dilemma. Excellent companies are not short of money. Top investment targets like Matrix are not short of money at all. We can't find room to intervene in Matrix.
Like the cash-starved companies I just mentioned, Goldman Sachs may have invested in dozens of companies, but only one of them developed a patent after receiving Goldman Sachs funds, allowing Goldman Sachs to enjoy excess profits.
It’s really hard to choose between this, but if Newman is short of money or needs external financing, Newman can tell me at any time that Goldman Sachs is still willing to accept the A/B share structure. We only need income and no voting rights.
Our internal decision-making committee has discussed that if Matrix is open to investment, Goldman Sachs is willing to hand over all Goldman Sachs' voting rights to you when signing the investment agreement. "
Sitting on Zhou Xin's left is Jerrell, and on his right is Li Jingyi. To Jerrell's left is JPMorgan Chase executive James Dimon, who will become the CEO of JPMorgan Chase in 2005.
Although Jerrel's voice was very low, James could still hear it very clearly. Of course, everyone is engaged in the financial industry and are familiar with this set of tricks to praise entrepreneurs, but he did not expect that Goldman Sachs would invest in Matrix. He was actually willing to hand over all voting rights to Zhou Xin through an agreement.
This is a completely different concept, and it can even be called a big departure. It is equivalent to the stocks obtained by Goldman Sachs after investing, which are stocks with zero voting rights. This is also very rare in the century-long history of Wall Street.
Whether it was the A/B share structure adopted by Facebook in its early days when it accepted venture capital after it became popular across the United States, or the later Lakeside partnership structure developed by Alibaba in 2010, neither could compare with Goldman Sachs' approach.
The only thing comparable to this idea was when Snapchat (the ephemeral app) went public, it publicly issued shares without voting rights, which was the first time in the history of Nasdaq.
James thought about it again and felt that Goldman Sachs' strategy was reasonable, because anyone with a discerning eye could see that Matrix was a long-term business, and Zhou Xin, the founder of Matrix, was too young. As long as Goldman Sachs invested in this business, There will be countless opportunities in the future to realize the sky-high price of your shares.
We are just doing business and are not obsessed with pursuing control of the company. This is not what venture capital institutions have to do.
Zhou Xin said: "Matrix is indeed not short of money for the time being, but I have other investment projects. I'll see if you have any intention."
Before Jerel could say anything, James, who was sitting across from Zhou Xin, poked his head out and said, "Newman, JPMorgan Chase is here to serve you wholeheartedly."
Jerel stiffened instantly, and his expression changed several times in an instant. Fortunately, the lights were not on in the auditorium, otherwise he was afraid that his expression management would fail.
Jerrell turned to James and said: "Dimon, we need to divide it on a first-come, first-served basis. Goldman Sachs is now talking about cooperation with Newman. If JP Morgan Chase wants to cooperate with Newman, it can find another time to talk to Newman.
There's a queue here. "
James Dimon pretended to be exaggerated: "Isn't Baidu going public today? When did it become a business negotiation meeting for Goldman Sachs?"
Zhou Xin was afraid that the two of them would argue too loudly with each other and ruin Robin's situation, so he quickly stopped him and said, "We can come down and talk slowly. I need a large amount of funds and many organizations will be required to participate."
"I believe this business cannot be undertaken by any one institution."
Both of them were interested. The larger the amount of investment required, the more promising the project was. Zhou Xin was very reputable on Wall Street, and the venture capital institutions he cooperated with had never suffered losses.
This is such a rare thing. Whether it is Riot Games or NewPay, Goldman Sachs who participated in it is no exaggeration to describe it as "full of money".
Therefore, this group of venture capital institutions have a strong desire to invest in projects led by Zhou Xin. Even in projects like Xinxin Technology, which at first glance do not seem to be profitable, many people are willing to invest.
"Newman, you can simply say, to use a Chinese proverb, it is better to choose the day than to hit it. Today we have a preliminary understanding of this project. When we go back later, we can start to do feasibility analysis and put this project as soon as possible. Start it." Jerel said quickly.
James added: “Yes, we are all very interested in your project.
Do you know how much impact Mphone has had on us?
What Jerrel didn't finish just now is that other mobile phones are at their peak when they are released. As the first half of the year passes, sales will plummet. Mobile phone manufacturers no longer invest in marketing and leave the specific marketing rights to the dealers themselves, because The mobile phone itself does not have the ability to continue to attract consumers.
But Mphone is different. The essence of Mphone is still to sell content. With the launch of the Mphone store, Mphone not only sells content but also sells services.
Content is provided by consumers, and the amount of content they accumulate on Weibo and Quora will only increase. Services are provided by Internet companies. Some of these services are free or paid, but there will be more and more services without affecting the service. .
With the increase in services and content, Mphone will only become more and more attractive. I think the sales volume of Mphone in the American region this year will exceed last year. Currently, Mphone is the only one in this form on the market. Really amazing design. "
JPMorgan Chase's awareness of Mphone is obviously higher than that of Goldman Sachs. It may also be that James Dimon has a higher awareness of Mphone than Jerrell.
After James finished speaking, Zhou Xin simply told Xinxin Technology that if it wanted to build a factory in China, it would need external financing. He would provide 20% of it himself, and then it would need 80% of external financing.
After saying that, both James and Jerel were silent, because this project would not make any money at first sight.
It still makes sense to engage in chip design in China, because chip design is essentially research, and only needs to cultivate talents, and the areas to be considered are relatively narrow.
But chip manufacturing, if there is no Wassenaar Agreement, they think it will be in trouble.
With the restrictions of the Wassenaar Agreement, this is an investment with far higher risks than returns.
Zhou Xin saw the two fell into silence and said: "I know your concerns. It is expected to raise US$4 billion in funds, and I will invest US$1 billion myself.
But this is not a one-time event. It will be invested step by step. Only when the operation is good and the profits are in line with expectations will we continue to invest.
For the first time, it was expected to raise US$1 billion. I invested US$500 million myself to purchase three chip production lines. "
Jerel sighed inwardly. He wanted to eat meat, but someone else brought out bones. There was still no meat but only smelly bones. In view of the previous cooperation between Goldman Sachs and Zhou Xin, they both needed to express themselves on this project:
"Newman, I know what you mean. We will study it carefully when we get back and make internal judgment before deciding whether to invest.
From a personal point of view, I am not optimistic about this project, because the current overall integrated circuit manufacturing environment is not optimistic. Memory chips are reducing in price, and Samsung is expanding production counter-cyclically under the premise of reducing prices. Whether Xinxin Technology is compared with Samsung Still compared to Neon Elpida, there is no advantage.
But I still believe that you have magic power and can succeed. "
James continued: "Newman, we at JPMorgan Chase will also seriously consider your proposal. Out of our trust and support for you, we should invest some, but the total amount of US$4 billion raised will indeed depend on JPMorgan Chase or Goldman Sachs. Two companies cannot survive.
You may need to find more investment institutions to participate.
I don’t think that chip manufacturing in China will definitely fail. China still has its unique advantages.
After joining the WTO and enjoying the most-favored-nation status of many developed countries, China's chips have a cost advantage at the export level. In addition, China's labor costs are relatively low and there are a large number of people who have received higher education. The advantages in this regard are obvious.
Moreover, China is not short of water and stable electricity required for chip manufacturing.
The only two major factors that restrict China's chip manufacturing industry are: one is the poor general environment, and the lack of demand will make it difficult to sell your chips even if they have a cost advantage.
The second is the Wassenaar Agreement. The Wassenaar Agreement determines that China can only produce mid- to low-end products in the field of chip manufacturing. The profit margins of mid- to low-end chip products will be very thin and cannot be compared to the most advanced chip manufacturing processes. Enjoy super profits that way.
So this is a high-risk, medium-low-return project, but it’s different with Newman. Maybe you can solve the consumer-side problems by yourself.
Just like Mphone, with Mphone's revenue of US$3 billion last year alone, part of the chip production is handed over to the chip manufacturer of Xinxin Technology, and some electronic products will be developed in the future. Consumers don't have to worry too much.
So Newman, with your support, I think this is a low-risk, low-return project, and JPMorgan Chase will be willing to participate. "
For example, at the beginning of the millennium, Shougang wanted to transform its chips and gradually shift from the steel field to the chip field. At that time, Americen Capital was willing to invest, because the overall environment of the integrated circuit industry was very good at that time, even if it was only a mid- to low-end business, High-end chip manufacturing can also make money.
As a result, the situation took a turn for the worse in the first quarter of 2000. The demand for chips shrank rapidly. Shougang took the land to build a base, and Amerikan Capital withdrew its investment. Halfway through the talks about equipment, they gave up and turned to real estate.
"In March, SMIC obtained 0.11 micron DRAM trench technology and 300mm product proprietary technology transfer from Deutsche Infineon; in June, North China's Kosi-Silicon Technology Semiconductor Technology No. 1 Co., Ltd. laid the foundation; Changan Xiyue Electronic Technology Co., Ltd. was established; in June, the Shenhai SJ District Government signed an investment agreement with TSMC to establish TSMC (Shenhai) Co., Ltd. to engage in 8-inch chip production business; in July, Suzhou Hejian Technology was officially put into production."
(End of chapter)
