My Age of Investment

  Chapter 311 Poison Pill Project

On February 18, 2005, US Eastern Time, and on February 19, Beijing Time, Shanda announced that Shanda and its controlling shareholder have passed a secondary market transaction, holding 19.5% of Sina’s equity, and in accordance with relevant US laws and regulations, have filed with the SEC of the United States Securities Regulatory Commission. Submitted the 13-D document of beneficial equity.

  As soon as this news was announced, a single stone stirred up waves!

  The stock prices of Sina and Shanda both rose!

  Fortunately for the United States, domestic media have launched numerous reports.

Describe this as a shocking merger. After the merger is completed, an Internet giant with 5 billion and 10 billion U.S. dollars will be born, China's largest Internet company, and it will distance itself from Sohu and NetEase, and directly challenge international giants such as Google and eaby. .

  As the media dig deeper, more inside stories have been unearthed.

  In order to acquire Sina, Shanda spent US$230 million in cash, which accounted for 60% of all the company’s working capital, which is evident in its determination.

  At the same time, with the aura of Chen Tianqiao "the richest man in China at 30 years old", the outside world is more optimistic about this marriage.

  Brickers and Joker believe that Sina’s equity is too dispersed and 19.5% of its equity has been acquired. It is already a fish on the chopping board and is left to be slaughtered.

  Sina remained silent, refused to accept interviews, and did not speak out, as if it had already acquiesced to the settlement of the hostile takeover.

  In this context, the Lixia Fund under Envision Capital is bucking the trend, selling its stocks frantically, and running madly.

  Don’t worry about not paying the bill. There are a large number of institutions optimistic about this marriage, and they are scrambling on the market to make money for the surge in stock prices brought about by this wave of mergers.

  So, the shipment of Lixia Fund is fairly smooth.

   "I heard that Chen Tianqiao has already entered Beijing and is negotiating with Sina. Should I keep some in my hands and wait and see for a few more days?"

  In the office of Envision Capital, watching employees continue to sell orders, but Shanda’s share price has hardly been suppressed, and it still maintains a small increase, Liu Hai couldn’t help but suggest.

  Xia Jingxing glanced at her bangs in surprise.

   Liu Hai hurriedly explained, "What I mean is to sell the principal and half of the profit, leaving half of the profit to fight for the excess return."

  If it is not opened, Xia Jingxing may approve of Liu Hai’s proposal. After all, the negotiation between Shanda and Sina is still unknown, and even the merger hopes to exceed 50%, which will prevail.

"Sell it all. Chen Tianqiao will not sacrifice his short-term interests. You can see that he only buys 19.5% of the equity. He never crosses the 20% position line. You can enter the board of directors, and you can withdraw. The sell-off has ended..."

  The boss has spoken, Liu Hai did not insist anymore and urged his subordinates to speed up the selling.

  …………

  …………

  Four days later, Sina issued an announcement stating that it would launch a "share option plan," the so-called "poison pill plan," to prevent any third-party acquisitions, including Shanda.

  Poison pill, also known as the "equity dilution reverse takeover measure", once an unauthorized party acquires 10% or 20% of the target company's shares, the poison pill will take effect.

  The acquired company will issue new shares to other shareholders at a low price, excluding the hostile bidder from the list of additional shareholders, and achieve the purpose of diluting equity.

  The hostile bidder can still buy shares in the secondary market, but because of the increase in new shares and the expansion of the total share capital, if you want to reach the controlling line or obtain more equity, you will have to spend a lot of money.

  The poison pill plan announced by Sina is that ordinary shareholders other than Kai Shanda, for every common stock they hold, receive a share option of US$150, and can buy new shares at half price when Sina issues new shares.

  Forget those who have something good, Sina’s total share capital is 50.48 million shares, Shanda and related parties hold 9.84 million shares, and the rest of the shareholders who have share options together hold 40.64 million shares.

  Sina’s stock price is about 32 US dollars, half price is 16 US dollars, each common stock is entitled to 150 US dollars of stock options, that is, for every common stock held, you can enjoy the right to purchase 9.375 new shares.

  The 40.64 million shares can be issued after the poison pill is activated to 431.48 million shares. Shanda will still be 9.84 million shares, which will be diluted from 19.5% to 2.28% of the total equity.

  In addition to the dilution of equity, Shanda will also bear certain losses, because other shareholders are all new shares bought at half price of $16.

  Shanda bought 9.84 million shares of Sina at a total cost of 230 million U.S. dollars, with an average holding cost of more than 23 U.S. dollars.

  However, the poison pill is not yet activated. Shanda will only be activated if it buys 0.5% of the stock.

  This is actually to scare Shanda and let him rein in the precipice.

  If Shanda does not listen to persuasion, it must be prepared to lose money and dilute equity.

  If Shanda stops its actions, Sina can redeem its share options for US$0.001 per share option.

  It will cost more than 40,000 US dollars to settle this matter.

  As soon as the news came out, Shanda’s share price fell.

  However, all of this has nothing to do with Envision Capital. They have already liquidated Shanda’s shares and are counting the results.

   "Jingxing, you really got it. Shanda is now in a dilemma.

  We bought 1.0368 million Shanda shares at an average price of 21.22 US dollars, the average selling price was 33.7 US dollars, and the profit was about 12.9 million US dollars. "

   Liu Hai said angrily: “If you retreat now, it is estimated that the profit will be cut in half. You still have the right idea.”

  Xia Jingxing smiled and said, “It’s not time to conclude the coffin. What poison pill plan is actually a bargaining chip, putting pressure on Chen Tianqiao at the negotiating table.

  If he can afford the price, believe it or not, Sina’s management will immediately redeem all the stock options, a happy marriage. "

   Liu Hai nodded, gaining a deeper understanding of business competition, and sighed: “Bustling, all for profit, you are right.”

  Xia Jingxing said, "Shanda didn't call us, right?"

   "No, wherever I can take care of it, it is estimated that many Shanda shareholders are ready to sell off.

  Shanda has smashed so much cash on Sina. If there is no agreement and cannot be merged, it is definitely a huge bad news. "

  Xia Jingxing nodded, still a little worried Chen Tianqiao called to follow up.

  Everyone just saw it some time ago, and you were playing yin behind your back. How embarrassing is that?

   But after thinking about it carefully, even if Chen Tianqiao really found out, Xia Jingxing felt that the other party would not call to ask questions.

   is an adult, these accusations seem very funny and useless.

  At best, stay away from yourself in the future.

  Xia Jingxing has no moral baggage, and he is not a pitfall, just making a little money.

   Liu Hai said: “Sina and Shanda have all cleared their positions and got back 44 million US dollars in principal and more than 29 million US dollars in profits. Which stock shall we deploy next?"

  Xia Jingxing pushed the computer to Liu Hai. The latter looked at it and frowned, “Apple? They just completed the one-for-two stock splitting plan. The stock price may not be optimistic in the short term.”

  Xia Jingxing didn’t need to explain too much, and smiled and said: “In addition to Apple, China’s Focus Media and Baidu are also going to be listed in the United States this year. You can pay attention to it.”

   Liu Hai understands, Xia Jingxing doesn't want to say more, but wants to study it carefully.

  After understanding Xia Jingxing’s meaning, he did not ask any more, but made up his mind. Next, he had to study hard and not rely on the boss for everything.

  (End of this chapter)