After Egret's IPO, the company did not adjust its fiscal year cycle and continued to calculate based on the calendar year. On October 23, along with the release of the new annual Forbes list of the 400 richest Americans, Egret's third-quarter financial report for 1995 was published. Quarterly revenue, compared to $3.31 billion from the same period last year, increased by 71% to $5.65 billion. Even though net profit was only a modest $310 million and much of the attention was diverted by the Forbes list, the report was still shockingly impressive to those paying attention.
Including the $3.91 billion and $4.73 billion from the first two quarters, Egret's total revenue for the first three quarters of 1995 had already reached $14.29 billion, with the full-year revenue for 1995 expected to easily surpass $20 billion.
In 1994, Egret's annual revenue was only $11.67 billion. For most companies, breaking the $10 billion revenue mark and maintaining a growth rate of around 30% would already be considered rapid. Egret's projected revenue growth for 1995, still exceeding 70%, was nothing short of a miracle.
However, a closer analysis of Egret's detailed financial report shows that this business miracle was entirely real.
The explosive growth of the internet industry, driven by Egret's establishment of the World Wide Web standards and its firm control over browser access points, led to exponential growth in demand for its core internet software, YWS cloud computing services, online advertising business, software and game stores, and e-commerce platforms.
Given that Egret monopolized most of the core patents for World Wide Web technology, its flagship products had no direct competition, allowing the company to set its prices with absolute authority.
Any company or investor wishing to enter the internet sector first had to purchase Egret's suite of foundational internet software, which became even harder to pirate once the company switched from one-time purchases to subscription-based models.
After purchasing the software, the smartest choice for quickly and conveniently setting up websites was to use YWS services.
Moreover, any company wanting to market or operate products related to new technologies couldn't avoid using Egret's various online platforms. Egret's software and game stores also became the preferred channels for small software and game developers without the resources for independent distribution.
In 1995, the total capital entering the new technology sector had reached the trillion-dollar level, and as the creator of the World Wide Web standards, Egret naturally became the biggest beneficiary.
Even though Simon had been deliberately suppressing Egret's pursuit of short-term profits, the tech giant still made money hand over fist.
There was no stopping it.
The frenzy of capital accelerated the development of the internet industry, and Simon was happy to see it. However, he did not want Egret to fall into the same frenzy.
Thus, during a morning conference call, Simon repeatedly urged the executives to shift their focus toward stability.
Egret's initial aggressive expansion had been aimed at launching a wide range of online services and content in the shortest time possible to meet the needs of other companies and attract the public to join the internet. Now, this work could be taken over by the influx of capital, and Egret's task was to focus on improving its existing businesses, such as software services, email, online payments, search engines, social networks, and e-commerce.
If the timing were right, Simon would have preferred to streamline Egret.
Even though Simon repeatedly warned the management to exercise caution, Egret continued to make big moves following the IPO.
One such move was the construction of a series of data centers overseas, with eight centers planned in the UK, Germany, China, Japan, Singapore, Italy, Spain, and Australia. While the scale of each center varied due to local industrial conditions, the total investment was expected to reach $2.5 billion.
This plan not only aligned with Egret's long-term strategy but also demonstrated to investors the company's commitment.
In its IPO prospectus, Egret had emphasized that the funds raised were primarily for global expansion. Simon's promises during meetings at the White House with Washington's power brokers had not been forgotten.
These eight data centers, with a total investment of $2.5 billion, were Egret's clear statement of intent.
Additionally, companies like AOL, Cisco, and even Verizon would support Egret's plan.
While AOL was improving its domestic infrastructure, it had already begun laying its own private transatlantic submarine cables and would soon start an even larger transpacific submarine cable project.
At the same time, Egret also announced a new hiring plan for 20,000 people, with only 3,000 in the U.S. and the remaining 17,000 hired for global expansion across its overseas branches.
The tech bubble in the U.S. was indeed forming.
However, despite Egret's massive market capitalization making it a target for attention, compared to other companies within the Westeros system like Cisco and AOL, it actually had the least speculative value.
Although the shadow of the Wisconsin distribution center shutdown still loomed, the release of Egret's first post-IPO quarterly report at the start of the new week sent shockwaves through the market.
By the time Simon ended his video conference with Egret's senior management at noon on the East Coast, Egret's stock had already risen 6.1% from the morning opening. By the time the New York Stock Exchange closed at 4:30 p.m., Egret's stock had surged 11.7%, and the company's market value had skyrocketed from $253.9 billion to $283.6 billion.
The stock market has always had its irrational side, but some things are undeniable.
That afternoon, after the U.S. markets closed, Barron's published an article on its website analyzing Egret. It pointed out that based on Egret's current $20 billion in annual revenue, if the company abandoned its aggressive expansion and focused on profit, it could easily achieve an annual profit of $4 billion based on a 20% profit margin typical for tech companies.
Thus, Egret's closing market value of $283.6 billion equated to just 54 times its potential earnings.
Considering Egret had maintained a revenue growth rate of over 70% even after surpassing $10 billion in annual revenue, a price-to-earnings ratio of 54 was not only reasonable but conservative. The company's true value would be reflected if its market value doubled.
In other words, Egret's market value still had room to grow by another 100%, potentially reaching $600 billion.
When Barron's published this article on Egret's homepage, it garnered support but also quickly attracted opposition. Julian Robertson, the founder of Tiger Management, who had publicly declared his intent to short Westeros system tech stocks, harshly criticized Barron's in a CNN interview that evening, calling the article "sensationalist."
However, soon after, more rumors spread online.
Due to Egret's stock performance and the overall upward trend of the Nasdaq since its listing, many hedge funds that had followed Julian Robertson in shorting tech stocks were suffering significant losses. Since October 6, in just two weeks, the paper losses for Wall Street's short-sellers had likely reached nearly $1 billion.
If Egret and other Westeros system tech stocks continued their current growth trajectory, many shorts would be forced to liquidate within a month.
Being in the thick of things, Simon had even more accurate information.
According to data collected by Cersei Capital, short-sellers targeting Westeros system tech stocks had already lost over $1.6 billion. However, Cersei Capital's own profits amounted to less than $500 million because the market was crowded with many other long positions.
Too many wolves, not enough prey.
Ironically, Julian Robertson's Tiger Management had suffered relatively little loss.
The Wall Street financier had clearly sent a group of sacrificial lambs to the front lines while his own fund had minimal short positions.
After a day's work, Simon had a dinner meeting scheduled with Verizon CEO Raymond Smith, primarily to discuss the Westeros system's telecommunications strategy following the upcoming Telecommunications Act to be passed by the Clinton administration.
When Simon had acquired Bell Atlantic, the predecessor of Verizon, his main focus had been on Raymond Smith, who had the vision to transform a regional Bell company into a telecommunications giant on par with AT&T. Though limited by U.S. telecommunications regulations and antitrust laws, Verizon's landline business had, in recent years, been concentrated in a few East Coast states.
However, the rapidly growing mobile communications business was not subject to such restrictions, just like how AOL had taken the lead in internet access services.
Thus, Verizon's focus in recent years had been on mobile communications.
With Simon's strong support, during last year's mobile communication spectrum license auction in Washington, Verizon spent $1.8 billion to acquire half of the available spectrum, extending its mobile network across the entire U.S. East Coast.
In addition to this, Verizon had been rapidly expanding its overseas businesses in collaboration with AOL and other Westeros system companies.
In this year's Forbes wealth list, Verizon was valued at $30 billion as a fully privately-owned subsidiary of Westeros. Forbes even stated that because the company had no public shareholders, the $30 billion valuation was highly conservative.
To avoid unwanted attention, the dinner was held at Simon's apartment on 68th Street in the Upper East Side.
As A-girl quietly delivered the dinner and left, Raymond Smith couldn't help but feel a sense of awe as he discussed business with Simon and looked across the table at the still youthful face.
Raymond Smith had also received the latest issue of Forbes earlier that morning.
7 trillion dollars!
When he first saw the figure, Raymond Smith found it unbelievable, even though his
boss's wealth had already reached $300 billion last year.
The U.S. Treasury had projected the federal GDP for 1995 at around $7.6 trillion. This meant that Simon's wealth alone represented 9.2% of the federal GDP, far surpassing the 1.5% held by the Rockefeller family at its peak. Not even the combined wealth of the Morgans, Rockefellers, and Carnegies could compare.
Globally, this number was even more staggering.
According to estimates for 1995, fewer than ten countries would have a GDP of over $700 billion. Raymond Smith had specifically looked up the data that morning and found that China, projected to rank 8th globally in GDP with $730 billion, was a nation of over 1 billion people.
Spain, ranked 9th, had a projected GDP of only $610 billion for 1995.
In other words, his young boss's personal wealth alone would rank 9th globally.
Richer than entire nations.
As for whether the $7 trillion figure was exaggerated, after reading Forbes' in-depth article, Raymond Smith had no doubts.
The shares Simon held in Cisco, AOL, Egret, and Daenerys alone contributed $500 billion to his wealth. This was based on early October valuations, at which point Egret's market cap had not yet reached $230 billion.
Yet, just today, Egret's market cap surged to $283.6 billion.
Based on Simon's stake in Egret, his wealth increased by nearly $30 billion in a single day, more than the total net worth of Forbes' third-ranked billionaire Warren Buffett, whose personal fortune was just $12.6 billion, less than half of Simon's one-day gain.
In addition to the four most valuable companies, the entire Westeros system—excluding the subsidiaries of the four giants—comprised numerous other investments and holdings Simon had accumulated over the years. Among them, 11 companies were valued at over $10 billion, including Cersei Capital, Nokia, Tinkerbell, Verizon, and Melisandre.
Even smaller companies like Qualcomm, Arya, Instagram, Alderac, and ATI, valued in the billions, were too numerous to count. Any one of these could suddenly grow into a massive corporation.
The stakes in these companies alone were enough to account for the remaining $200 billion, with some to spare.
And these were just Simon's publicly known assets.
According to various rumors over the years, in addition to his vast investments in unlisted companies both domestically and abroad, Westeros was also said to have quietly acquired significant shares in traditional corporate giants like General Electric, Boeing, and Freddie Mac, though none of this had been disclosed as Simon's holdings remained below the 5% threshold for public reporting.
As for how Simon had managed to acquire the funds for these investments, one only had to look at Forbes' recent $30 billion valuation of Cersei Capital to understand. Cersei Capital was fully owned by Simon and his wife, with the shares of its subsidiaries distributed to others.
During every major financial crisis over the years—whether the European currency crisis or the collapse of the Mexican peso—Cersei Capital had been deeply involved.
Moreover, even without Cersei Capital, the Westeros name alone would allow Simon to secure loans from banks easily, whether for tens of billions or even hundreds of billions of dollars.
That's just the way the world works: the wealthier you are, the more banks are eager to lend to you.
It's also worth noting that the trillions of dollars in assets managed by Cersei Capital's Blackrock Asset Management arm represented an additional significant leverage point for the Westeros system.
Unlike ordinary people baffled by the $7 trillion figure, Raymond Smith, standing at the top of the societal pyramid, understood all too well what this level of wealth meant.
In today's America, it was nearly impossible to go a day without encountering something related to the Westeros system, whether information, products, or services. This was the most direct manifestation of Simon's personal wealth: the Westeros system was beginning to permeate every aspect of American life.
The industries covered by the Westeros system might not be as sensitive as energy sectors like oil or electricity, but if Simon ever wanted to target someone, all he had to do was cut off the services his industries provided, and the person on the receiving end would have a very hard time.
From the White House to the common man, no one would be spared.
So, when Raymond Smith heard about the issues at the Wisconsin distribution center, he thought the American Truckers Union had made a terrible blunder.
The United Auto Workers had ruined the once-dominant U.S. auto industry with their endless demands. Given such a glaring precedent, coupled with the current anti-union sentiment in American society, there was no way Egret would let the truckers union succeed.
Using these underhanded tactics to try and leech off Egret would not only fail but would make the company even more wary of the truckers union. Furthermore, given the deep-seated issues within these old unions, taking them down would be easy.
Especially when the man in control of Egret was the world's only $7 trillion super-wealthy individual.
Not only that, this year's Forbes list of the 400 richest Americans saw the Westeros system's influence grow alongside Simon's towering presence. Of the 400 individuals listed, 37 members of the Westeros system, including top executives whom Simon had personally promoted, made the list—not counting top billionaires like Bill Gates and Larry Ellison, who held related shares but were not part of the system's core.
This group alone made up nearly one-tenth of the entire list.
Thanks to the generous contract Simon had offered him years ago, Raymond Smith himself was fortunate enough to be included, with a personal net worth of $450 million.
In the Western world of capital, these people formed a terrifying force capable of destroying any opposition. The collective power of the Westeros system could easily bring down a company, or even a country. And if that country was the United States, the battle would still leave scars, while smaller nations would simply be crushed.
Throughout human history, the capitalists who sold out kings and waged wars paled in comparison to the Westeros system.
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