What's wrong with me being a rich man?

Chapter 74 Birth
Yu Xing went to bed at 1:30 in the morning. He thought that after finalizing his intention and drinking beer, he would wake up to a sunny morning, but he did not expect to open his eyes at just five o'clock.

He was dazed for a few minutes, and when he opened the curtains he could only see the faint morning light outside, but when he went back to bed he was no longer sleepy.

Three and a half hours of sleep.

Yu Xing rubbed his face, got up and urinated, then washed up and made a cup of instant coffee. He looked out the window and saw some old men and women getting up early for morning exercises on the street.

He drank his terrible coffee and thought while looking at the morning street scene.

In the past three months, except for the trip home, I have been thinking about the company's affairs almost all the time. Since we are all college students, even with Zhong Zhiling, Lu Haiying and others, there are always strange things that need to be asked.

At this moment, Yu Xing felt that the mental fatigue caused by the high-load operation was more unforgettable than this short sleep.

Stimulated by high commissions and open to part-time work, although Guiai.com was established not long ago, the number of full-time and part-time employees is nearly 500, even though a wave of people left in August.

Five cities, this and that, right and wrong...

Yu Xing lit a cigarette and felt that an effective management mechanism and a streamlined team would make him happier when doing things.

His thoughts moved, and he couldn't help but think about short selling again.

Yu Xing's superficial understanding of short selling comes almost entirely from reflective works after the financial crisis such as "The Big Short", as well as companies like Muddy Waters that are well-known in China for sniping Chinese stocks listed in the US.

Muddy Waters should not have been established yet. Its name comes from the Chinese meaning “fishing in muddy waters”. The founder is a young American who has worked in investment banks and law firms, and also worked in a foreign law firm in Shanghai. He also runs a warehousing business and a website.

Later, the warehousing business was almost bankrupt, and the rent was embezzled by the park manager.

The reason why he established Muddy Waters was because he helped research a Chinese company and discovered fraud. He decided to go all out and short the company together with his father, who had experience in this area.

This short selling caused the company’s stock price to drop by more than half, and the founder made a considerable profit of $6000!
6000 US dollars, more than 4 Chinese yuan, not much profit.

Yu Xing was impressed by this detail, but he couldn't remember the name of the first company that was shorted by Muddy Waters. Fortunately, the name Jiang Nanchun was equally impressive.

Muddy Waters is not large in scale. Another typical example is Citron, a company of similar nature. It is said that it has only one person and only temporarily hires 2 to 10 people to do the work when investigating different projects.

Yu Xing's understanding of Citron came from its doubts about its former boss's company. Citron shorted Evergrande in Hong Kong stocks in 2012 and was sued. In 14, it was investigated by the Hong Kong Securities and Futures Commission (SFC). Finally, Citron lost the case in 2016 and was ruled not to buy or sell securities in Hong Kong for five years.

Of course, that suspicion was confirmed in a not-too-distant uproar, and a sentence in the investigation report became widely circulated.

——"Evergrande's ending is already determined, the only thing that is uncertain is the time."

As an employee, Yu Xing never thought that his evaluation of the same thing at different stages could be so completely different. The memory is still fresh in his mind, and he still has mixed feelings when he thinks back on it now.

From this perspective, as long as the core figures of the organization are established, it does not really need too many people.

And, adequate security is also required.

Under the premise of safety, this work may be done well with appropriate ideas and suitable tools.

Short-selling institutions must operate separately from mainland companies and have multiple identities. Bai Xiaosheng can play an auxiliary role in certain moments of public opinion, but it cannot always work for short-selling, and short-selling itself will not be that frequent.

The target can be to select companies in Hong Kong and US stocks that can be researched and are operating legally and in compliance with regulations.

Yu Xing drank half a cup of coffee and recalled what Liu Wanying had said herself: projects are tools, people are tools, and the effect of these combined together... not to mention being very expensive, but could it bring in some small profit?

The city outline outside the window became clearer and clearer in the morning light, and the number of pedestrians and vehicles on the road gradually increased.

Yu Xing looked at this scene. Perhaps it was the fatigue from sleep that came back to haunt him, or perhaps it was the refractory period after the company's intention to sell was finalized. A thought that had been buried deep in his heart quietly emerged: Why was it him? Why did he have such a dream?

Is there really destiny?
He looked at the morning glow in the sky, and after a long time shook his head. He really couldn't understand what destiny was.

Yu Xing drank the rest of the coffee in one breath. Since he couldn't understand his own destiny, he let those selected companies face their destiny.

He went downstairs to have a simple breakfast, then took a peaceful two-hour nap. When he woke up, he felt much more energized and the time was just right.

"Brother Xing, let's go eat." Zhong Zhiling called.

"You guys go ahead. I've already eaten." Yu Xing turned on the external speaker and said casually, "I need to write something. You guys can eat slowly. There's no need to rush this morning. Zhenai.com shouldn't rush you."

After hanging up the phone, I opened Focus Media’s financial report for last year and the second quarter financial report released in August on my laptop.

Focus Media's performance in the capital market before this year was actually quite outstanding. It was also the first Chinese new media company to be included in the Nasdaq 100 Index in the United States. Its head, Jiang Nanchun, has repeatedly promoted his company as the media group second only to CCTV.

Focus Media's stock price peaked in November last year at $11, with a market value of an astonishing nearly $65.1 billion. However, this year, affected by multiple factors and the recent financial crisis, the stock price has fallen by more than 80% and is currently hovering at more than $7.

Yu Xing spoke to Liu Wanying on the phone last night and brought up the reasons for the sudden drop in stock prices, arguing that from a human perspective, it is difficult to resist the desire to make trouble under such circumstances.

Half a year ago, it was nearly 80 billion US dollars, but now it is only 25 billion US dollars. If I were in his place, I would also find a way to revive the stock price.

Of course, this kind of reason from the perspective of human nature is just a put forward, and the company's governance cannot be bound in this way.

Therefore, Yu Xing plans to use a stupid method to verify whether Focus Media’s core business is down to earth.

To put it simply, Focus Media is an advertising company. It installs LCD screens in many commercial buildings, apartment elevators and other places across the country, and then plays advertisements of various brands on them.

Its Q2 financial report showed total revenue of US$2.11 million, a year-on-year increase of 106.8%, and net profit of US$3613 million, of which nearly 60% came from LCD screen advertising business.

At the same time, the LCD screen number in Focus Media’s financial report is 12.1 units.

This is what Yu Xing believes is the basic data of the core business.

The stupid method he thought of was to first check whether the number was real and whether it was inflated.

As for how to check...

Yu Xing planned to count with his fingers.

12.1 billboards, right? I hired 30 college students in different cities, and each person had an average task of 4033 billboards. And if we asked them to count them within a month, that means 134 screens would be counted every day.

The part-time salary for each college student is 5000 yuan, and the total labor cost is 15 yuan.

As for whether the figures reported by each college student are accurate and whether his work is in place...

Errors are inevitable.

On the one hand, he could tell part-time college students that there were other people doing the same job and compare the numbers in the end; on the other hand, Yu Xing planned to have people inquire about the number of screens in different cities at Focus Media in the name of advertising, pretending to consider the effect of the advertising.

Anyway, as long as the data are aggregated and errors are eliminated, it should be easy to tell whether there is water or not. Data obtained from various angles can also be used for multi-dimensional comparisons.

If even this basic data has problems, the revenue in the financial report may not match or may be falsified.

A lie always requires multiple lies to cover it up. As long as it is confirmed that there is a problem with an important data, the subsequent financial report analysis will be handed over to professionals like Liu Wanying. If the basic data of this survey is fine...

Then try again in a year or two.

Flies don't bite seamless eggs.

The problem is, it's almost certain that this is a cracked egg, we just don't know at what stage.

Already have a gap? Is it in the process of being a gap? Are you going to have a gap?

Anyway, this is the first one.

It is impossible to cover up the loopholes perfectly even if one does it intentionally or unintentionally. Moreover, according to common sense, no one would have thought that someone would have the leisure to calculate the number of hundreds of thousands.

Yu Xing named this basic and important data research plan "Dingfeng Spirit".

By the time the phone rang again, most of the document on the notebook had been completed.

Yu Xing didn't write it very clearly, but as long as he could understand it, it was fine. It just so happened that Zhenai.com could find someone to take care of this matter during the next three months.

However, he still felt a little sad when he closed his notebook. Even if Focus Media's stock price had fallen by more than 7%, its market value converted into Chinese currency would still be nearly billion...

Compared with the institutions that have not yet been built, this scale is like a mountain.

Can it really shake it?
I think so.

Moreover, there is another peak after this one.

On the way to meet Zhong Zhiling and others, Yu Xing suddenly had an idea and quickly sent a text message to Liu Wanying: What do you think about calling the organization "Guoshanfeng"?
Liu Wanying found the text message somewhat amusing. After thinking about it, she replied: It's quite good, very meaningful, very fierce and vicious.

She sent a second text message: Are you so sure there is something wrong with Focus Media?
Yu Xing replied: Just check and you will know. There will be data by the end of the year at the latest. Let’s analyze it together and decide the winner. Also, vicious?
Liu Wanying was a little surprised: Isn't it vicious to cross the mountain? Aren't you talking about the king cobra?

Yu Xing quickly checked on his phone when he saw this content. The common names of King Cobra are "Guoshanfeng", "Guoshanfeng", "Shanwanshe", "Guoshanwu"...

Ugh, it’s really vicious!

But this seems to be in line with short selling...

Could this be destiny?

The organization even has an English name now - King Cobra Research.

King Cobra Research or Over the Mountain Research Company.

After a long time, Yu Xing replied to Liu Wanying: How about this name?
Liu Wanying: It’s your company, whatever you want.

Yu Xing thought it was okay, the implication was still... not bad.

Now that we have a company name, a first goal, and a research strategy, we just need to wait for the rest of the second half of the year to get started.

"Today we have two things to do. One is to determine the final investment and proportion, and the other is to confirm the follow-up procedures with Zhenai.com." After Yu Xing met up with everyone, he suppressed the viciousness in his heart and talked about the business at hand.

He asked the second and third in command: "Did you discuss this last night?"

Lv Haiying and Zhong Zhiling looked at each other and answered firmly: "Brother, let's round it up together, 40."

Yu Xing laughed and said, "This is an all-in bet."

The company sold 263.5 million, minus the remainder, and the two of them, who hold a combined 15% of the shares, can get 39. Now they are asking for 40, which they have to do by adding part of their three months' saved salary to make the round number even.

Lu Haiying nodded: "Yes, as long as Senior Brother has no other plans, we will invest like this."

Yu Xing calculated silently in his mind and said thoughtfully: "Then I will also take an integer, 100 million. Liu Wanying's money will be calculated according to the investment after the shares of our company are clarified. There is no rush for that."

Song Yufeng's 12 has been confirmed, which means that Bai Xiaosheng can raise 152 million in funds.

Yu Xing then spoke up again: "Zhenai.com's acquisition of shares requires tax, but the transfer is done by Xiangjiang Company, and it seems that the withholding tax is paid at a rate of 10%. We will ask Zhenai.com for details. The tax will be paid with the option shares we set up earlier."

The shareholder of the mainland Guiai.com company is Hong Kong Guiai.com. The talent options were originally set at 10%, which was just enough to pay taxes. Yu Xing did not intend to take advantage of this at this time.

Zhong Zhiling and Lu Haiying had never expected this and nodded, saying that their senior brother was open and honest.

The current shareholding ratio has been preliminarily clarified. If calculated only based on the invested capital, Bai Xiaosheng Company has set up 10% options, and the total value of the company is 168.889 million. Yu Xing holds 59.21% of the shares, Lv Haiying and others hold a total of 23.68% of the shares, and Song Yufeng holds 7.11% of the shares.

"Brother, as a director, I propose that in addition to the 10% talent options, another 10% be used as your incentive shares." Lu Haiying said at this time, "Zhi Ling and I have discussed it, and we are both sincere."

Yu Xing nodded slightly, without being modest, and looked at Song Yufeng.

Song Yufeng said without hesitation: "Brother Xing, I have absolutely no objection!"

With this calculation, the total value of the company becomes 190 million. Yu Xing's investment of 100 million accounts for 52.63% of the shares, plus an additional 10% incentive, a total of 62.63% of the shares. Lu Haiying and the other person hold a total of 21.05% of the shares, and Song Yufeng's shareholding becomes 6.32%.

"Okay, I accept it. But, to be honest, I would feel bad if I were to take all the 10%." Yu Xing said with a smile, "We are starting anew together, so we have to have a good start. I will take the 10%, and give 2% to Xiaoying, 1.5% to Zhiling, and 0.5% to Brother Feng."

Seeing that the three of them were about to speak, he immediately said, "This is just a small board meeting. I will exercise my rights as a major shareholder. This matter is settled."

Yu Xing believed that his junior fellow students sincerely gave 10%, and he did not think that he was not qualified to receive it, but things could be better.

Unlike Guiai.com, which started in a hurry, was stimulated to move forward, and wanted to sell itself, the Baixiaosheng project can be more long-term and can lay a better foundation from the beginning.

Zhong Zhiling and Lu Haiying looked at each other, and understood their senior brother's intention, so they accepted it just like Yu Xing had done before.

Song Yufeng wanted to say a few more words of humility.

"Okay, Brother Feng is a man of high character, so I won't give you the 0.5%." Yu Xing was willing to fulfill his character.

"Hey, hey, Brother Xing, I was wrong, I was wrong, I wanted it, I wanted it." Song Yufeng quickly tore off his posture and quickly admitted his mistake.

Yu Xing said "hmm" and smiled, "Then it's settled."

In the end, he held 58.63% of the shares, Zhong Zhiling and Lu Haiying held 24.55% of the shares, and Song Yufeng held 6.82% of the shares.

The ratio is so certain that everyone is particularly happy.

Especially Song Yufeng, although according to the actual value of the money, this 0.5% is equivalent to 7600 yuan, although this is less than the other two, but this proves... there is no problem following Brother Xing!
Brother Xing eats the meat with big mouthfuls, and he can have a sip of soup from the side, that's fine!
Song Yufeng now has a very motivated idea in his mind, that he must make the company bigger and stronger and create brilliant achievements!

As long as you work hard, the shares in your hands will have higher and higher value!
For this, even... even if I go in by myself!
Song Yufeng was not idle the past night. He found two value positioning for himself. One was to stay close to Brother Xing and provide him with emotional value. The other was to hold his head high and stand up to take responsibility for the company!
In personal terms, you must be the boss’s confidant; in public terms, you must be the backbone of the company!

(End of this chapter)