Since he had decided to go to the United States to observe Silicon Valley, the tech mecca, up close, he naturally needed to understand the information there. The simplest and most direct way was to check the stock prices of listed companies.
Currently, the most famous internet technology company was Yahoo. Its stock had undergone a split at the beginning of the month due to rising prices, leading to a slight drop in its stock price. However, by the end of this month, with the Long-Term Capital Management crisis, both the NASDAQ and S&P 300 began to fall. This was also one of the reasons for the Hang Seng Index's decline; if the United States was falling, why shouldn't you?
Looking at Amazon, the future king of internet companies, it was also falling, having dropped below its average price line. It seemed the news of Long-Term Capital Management's potential bankruptcy had affected the entire stock market. What about eBay? This e-commerce company, did it not exist? Checking online for information about this company, it turned out it would only be listed next month; it hadn't had its IPO yet. And the underwriting company? Goldman Sachs… So, on August 30th, He Zhengcheng met with Zhang Zhiyuan.
"I want to invest in Silicon Valley and need your help!" He Zhengcheng said straightforwardly.
"What kind of help do you need?" Zhang Zhiyuan hadn't expected to meet so soon.
"I want to participate in eBay's IPO and join its board of directors!" He Zhengcheng said.
"eBay?" Zhang Zhiyuan wasn't very familiar with this company.
"It's an internet e-commerce company that does online auctions. In my opinion, it's a trading intermediary platform. I want to enter Silicon Valley, and perhaps through this small listed internet company, it could be a shortcut," He Zhengcheng said frankly. His reasons were very convincing, at least in the eyes of experts at the time, there were no issues.
"Why ask me for help?" Zhang Zhiyuan asked.
"Because Goldman Sachs is handling its IPO!" He Zhengcheng replied.
"It seems you've done a lot of homework," Zhang Zhiyuan commented.
"I love the internet. This might be the greatest invention and creation in human history. It could change the entire structure of human society and future lifestyles. I want to participate closely in this great technological and social revolution.
As for why eBay, the wealth I can control and influence is only so much. Finding a listed company with a certain level of recognition is better than finding those internet companies I completely don't understand," He Zhengcheng explained.
"Although I think you're a bit hasty, I feel your choice is already very prudent. If you were older, you might have more and better options in the future. I can't guarantee this matter, but I will try my best to help you," Zhang Zhiyuan said.
"Thank you. I thank you whether it succeeds or not!" He Zhengcheng said.
"You're welcome. In America's internet industry, this sector has the least discrimination against young people. Perhaps they need someone like you to promote their internationalization," Zhang Zhiyuan said.
"Young people, internationalization!" He Zhengcheng seemed to understand a little. eBay's current scale was very small, truly very small, but he still needed to prove his value. Could a useless young person really join a listed company?
According to some public information analysis, they would sell 3.5 million shares at an offering price of $18 per share, totaling $63 million. Of this, the company would raise $50 million, with some shares also sold by shareholders and venture capitalists. If operated conventionally, that $50 million would account for about 15 percent of eBay. In other words, eBay's IPO market value would be approximately $300 million.
What is my value? After leaving Zhang Zhiyuan, He Zhengcheng repeatedly asked himself. Foresight was useless at this moment. So, what could he bring to eBay's development?
Hong Kong, Daxia Country, South Korea, Southeast Asia markets? But eBay was just starting to expand into the United States market; wasn't it a bit too early to expand internationally?
Since he was going to the United States, He Zhengcheng no longer had the idea of buying Lenovo stock in Hong Kong. Although he didn't know whether Lenovo's or eBay's gains would be greater, he had no interest in wavering. On his return, he would ask Zhang Zhiyuan to help him open a capital account in the United States, which should probably be done in a day or two. There was a benefit to trading US stocks: any profits earned from trading stocks in America were not subject to tax. Wait, did Hong Kong have capital gains tax? Alas, he had never even paid taxes; that was truly a failure.
"Invest in eBay and join its board of directors?" Ji Jiasheng hadn't expected He Zhengcheng to be so aggressive. It seemed he had only mentioned it yesterday, and today he had already found a target. This efficiency was truly daunting.
"I have this idea, but there might not be an opportunity. eBay is about to go public. If we have Goldman Sachs's help, we can seize the opportunity to acquire a large number of shares," He Zhengcheng said.
"What kind of company is it, and what does it do?" Ji Jiasheng asked.
"They do online auctions, currently mainly for second-hand item transactions. This isn't important. What's important is that it's an e-commerce website, an online trading platform. Their current business is just the beginning; in the future, there's vast and imaginative room for growth," He Zhengcheng explained.
"What's the market value of this company?" Ji Jiasheng asked.
"Around $300 million," He Zhengcheng replied.
"So it's not much cheaper than Lenovo," Ji Jiasheng remarked.
"That's right, these two companies are not comparable," He Zhengcheng said.
"If we want to join its board of directors, we need to buy about 10 percent of the shares and also get the approval of the company's management?" Ji Jiasheng asked.
"At least in terms of difficulty, it's much easier than joining Lenovo's board of directors," He Zhengcheng responded.
"Thirty million US dollars, which is over 200 million Hong Kong dollars. This is not a small sum. We've just started; what if the investment fails…" Ji Jiasheng trailed off.
"Then let's invest in Lenovo first. If we have that capital, our chances of joining eBay's board of directors will be much higher," He Zhengcheng said.
"Investing in Lenovo is a big deal. It will be very difficult to invest more funds in America so quickly," Ji Jiasheng said.
He Zhengcheng also understood a bit. The United States market was not their primary market. If the investment amount exceeded that of Lenovo, it would seem like a confusion of priorities. However, acquiring more than 10 percent of Lenovo's shares was an unrealistic endeavor. The Daxia Country held about 60 percent of Lenovo's shares. Additionally, the four major Hong Kong merchants who had long cooperated with Lenovo also held a significant number of its shares. Buying around 5% of Lenovo's shares was an appropriate amount; it wouldn't make Lenovo's management uncomfortable, it would express Shanhai Capital's intention to cooperate, and it could potentially be achieved in a short period.
He couldn't get unlimited funds that Shanhai Capital could use, so he planned to find ways through other channels, such as funds allocated for personal arbitrary use, or those with limitations.
"This company was founded in 1995 and listed in three years, with such a high market value. It's hard for me to agree to you," Xu Xin said.
"eBay is different from Lenovo. Everyone is familiar with Lenovo, and we've had contact with it before, so after you mentioned it, everyone quickly agreed. But as for eBay in the United States market, to be honest, although it's not the first time I've seen this name, I'm really unfamiliar with it," Chao Yang said.
He Zhengcheng didn't go to Yu Dehui and Lv Lang. He thought it would be better to approach the investors directly, and he might get a faster response.