MTL - Reborn Capital Empire-v2 Chapter 689 Google's financing talks

Chapter 689: Google's Financing Negotiations

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At seven o'clock in the evening, in the West Garden of the Hanshan Courtyard, Guo Shouyun reserved the banquet area for himself. Compared with the brightly lit East Garden, which has become the most famous private club in San Francisco and even the entire western United States, the West Garden is much quieter. As for the secretariat in the backyard, although the lights are also bright, it is much quieter.

"Bruce!"

"Steve, David!"

Looking at Steve Schwarzman and David Rubinstein who strode after getting out of the car, Guo Shouyun greeted them with a smile and hugged them.

"I heard you're going to be a dad again, congratulations!" Steve Schwartzman laughed.

"Thank you! When the child is born, be sure to invite the two of you to a glass of wedding wine!"

"Okay, then we can wait!"

"Larry, Sergey, long time no see...!"

After a few simple chats, the two greeted Larry Page and Sergey Brin behind, and a group of five came to the pre-arranged reception room.

"Steve, David, everyone's purpose is very clear, in order to avoid wasting precious time, let's start directly?" Guo Shouyun said directly.

"Of course, I don't like wasting time either!" David Rubinstein said.

Steve Schwarzman nodded in agreement.

"That's good!"

After speaking, Guo Shouyun gave Larry Page a wink next to him. The latter meeting, walked to the projector that had been erected next to it, and opened the PPT about Google on the computer.

"Google was founded in 1998 and currently has more than 2,500 employees worldwide, with an interface available in more than 100 languages, displaying search results in 35 languages, and a database of 3 billion web documents, enabling users to access a database containing more than 80 It has indexed hundreds of millions of websites, and provides back-end web page query services to other directory indexes and search engines such as Ruby, Amazon, and AOL.

"At present, Google has three types of businesses: keyword advertising services, affiliate website advertising services, and cloud computing services. From 2001 to the present, Google has grown at a rate of 234% per piece, and achieved 37.8% in the two quarters of 2004. Revenue of US$ 423 million and net profit of US$ 423 million, a quarterly increase of nearly 25%. With the gradual penetration of Internet applications and promotion, Google's development has a trend of faster and faster."

"From the perspective of revenue structure, Google's website itself, the advertising revenue obtained by Google's related network sites around the world, and cloud computing are the main sources of Google's operating income. At the same time, product licensing rights and other businesses also make Google's business Income has been harvested. From 2003 to 2004, while Google's own website supported Google's main income, Google's worldwide network site business gradually expanded, and its proportion in the income structure increased from 24% in 2002. % increased to 39% in 2004. In 2003, cloud computing and big data services gradually grew, and now account for 12% of Google's revenue structure."

"In addition to revenue, changes in Google's total assets show a trend of rapid development. In 2001, the total assets were 287 million US dollars, and in 2004, it increased to 4.313 billion US dollars. Among them, Google's real assets also increased from 54 million in 2002. USD increased to $379 million in 2004."

"Google's operating cash flow nearly quadrupled between 2001 and 2003, with operating cash flow of $255 million, $595 million, and $1.177 billion in three years, respectively. In the two quarters of 2004, it was $1.435 billion. For the full year, operating cash flow is expected to be $3.058 billion."

"Regarding the IPO, Google's net profit in the two quarters of 2004 was $3.78 billion, with a net profit of $423 million. Calculated at a price-earnings ratio of 40 times the Nasdaq large Internet company, it should be valued at $37 billion. Google plans to use 500 million total shares, Issued 80 million shares to the capital market and raised $5.92 billion."

"In addition to consolidating the original web search and enterprise service businesses, half of the funds raised will be used for big data, digital imagery and satellite positioning services to help companies obtain more accurate data for development, and to help individuals obtain access to the United States and Canada. , Australia and other countries, and all Google Maps users to get accurate location information."

After Larry Page finished his introduction, Guo Shouyun smiled and said, "You two, this is the current status of Google and some plans for future development. If you have any questions, you can ask them now."

"$37 billion is the market value of Google's IPO? Have you talked to Phoenix and Merrill?"

Bank of Phoenix, Goldman Sachs and Merrill Lynch are the underwriters of Google's listing. The former is fine, after all, it is Guo Shouyun's own company, but David Rubinstein really doubts whether Goldman Sachs and Merrill Lynch can accept such a high valuation of Google.

In his impression, Stan O'Neal is not a generous person, and Goldman Sachs CEO Blank Fein is even more calculating.

"They took it, and they had to take it. Otherwise, I'd just hand over the entire underwriting of Google's listing to Phoenix."

If he hadn't reached an agreement with Goldman Sachs and Merrill Lynch before, he would not be willing to share with each other even 25% of Google's listing of such big fat.

After David Rubinstein and Steve Schwartzman looked at each other, the latter said, "If that's the case, what price can we get if we raise money?"

"$38 per share, 20 million shares each." Guo Shouyun said without hesitation.

"Bruce, are you kidding me? We talked for a year, and the two sides agreed to take a step back, but you gave us this condition?" David Rubinstein wanted to vent his dissatisfaction.

"Bruce, your listing price is $40, if we invest 20 million shares at $38, and even if you go public, how much can we make? $40 million? We'll do it ourselves To meet you in San Francisco, just to make $40 million, The Carlyle Group and Blackstone will become the laughing stock of Wall Street and even the global financial world." Steve Schwartzman said seriously.

Guo Shouyun took two pieces of toilet paper from the table, and calmly wiped the spittle that was sprayed on his face by the two of them. He has been in the business world for nearly five years, and he has seen a lot of wind and waves, and he has also experienced business negotiations with rolling up his sleeves and fighting. The dissatisfaction between the two was as early as he expected, so there was no fluctuation in his heart.

"Then according to the opinions of the two of you, what kind of conditions do you want?"

"At $30 per share, Blackstone and Carlyle each receive 50 million shares of original Google stock."

David Rubinstein nodded in agreement.

"If this is the condition given by the two of you taking a step back, then our negotiation today can be declared over." Guo Shouyun said.

"Bruce, from 2003 to now, Blackstone and Carlyle's investment talks with Google have dragged on for a year. Now everyone doesn't want to continue wasting time. So, there's no need to test each other. Let's be direct. What do you want? How much?" Steve Schwartzman asked.

"The same thing is what I want to ask, how much do Blackstone and Carlyle want to pay?"

"$35 per share, 50 million shares!"

After Guo Shouyun thought for a moment, "$35 is acceptable, but 50 million shares are too many, at most 22 million shares."

Google's original shares are too precious, and every share is worth fighting for. In the same way, Steve Schwarzman and David Rubinstein understand. Soon, the living room became a battleground for the three of them to compete.

With the extension of time, the content of the agreement is gradually determined.

Blackstone and Carlyle each received 32 million original shares of Google at a price of $35 per share. At the same time, the three parties agreed to take out 15% and 75 million shares as an equity incentive plan for the management, and the board of directors composed of the three parties will decide how to allocate it.

Regarding the board of directors, Guo Shouyun serves as chairman, Larry Page and Sergey Brin serve as executive directors, and Blackstone and The Carlyle Group each appoint a non-executive director to the company's board of directors.

With the signing of the contract, Google's shareholding distribution has also changed, with Blackstone and The Carlyle Group each owning 6.4%. Harvey Morgan was reduced from 3% to 2.62%; Larry Page and Sergey Brin's shares were reduced from 39% to 34.01%; Guo Shouyun's shareholding was reduced from 57.95% to 50.65% .

If you take out another 75 million shares to reward management. Then everyone's holdings will be reduced again, Blackstone and Carlyle Group will be reduced to 5.44%, Harvey Morgan will be reduced to 1.69%, Larry Page and Sergey Brin's holdings will be reduced to 28.91% , Guo Shouyun's shareholding will also be reduced to 43.05%.

In addition, if 80 million shares are to be issued in the listing, then the management shareholding will be reduced to 12.6%; Blackstone and Carlyle will be reduced to 4.57%; Harvey Morgan will be reduced to 1.42%; Larry Page and Sergey Boo Lin will be reduced to 24.29%; Guo Shouyun's shareholding will be reduced to 36.16%!

According to the contract signed by both parties ~www.novelbuddy.com~, the company has 180 days after listing, which is a half-year lock-up period. Within half a year, there will be no change in this shareholding structure.

In addition, according to the initial investment agreement, 12.05% of Guo Shouyun's 36.16% shares are Class B shares without voting rights. In this way, only 24.11% of the shares that can really support his exercise of power on Google's board of directors.

As soon as Google went public, his stake in the company nearly halved. But this is also impossible. Even if he didn't want Google to go public, Larry Page and Sergey Brin, and many of Google's top executives, wouldn't. Likewise, capital eager to share in Google's victory won't agree.

However, with the increase of its assets. Now Guo Shouyun's demand for Google is no longer as urgent as when he was poor and poor at the beginning. The reduction of shareholding is also within the range of his heart. In addition, after Google went public, he decided to sell all the Class B shares he held before the subprime mortgage crisis, and then took advantage of the subprime mortgage crisis and the NASDAQ stock market as a whole plummeted to buy another 10% of ordinary shares. stock, keeping its stake in Google above 30%.

According to the US securities law, holding more than 30% of the shares can have a veto power over major company decisions. Guo Shouyun wanted this power.