He Zhengcheng didn't know that Cerent would be acquired by Cisco for $7.4 billion next year. For a company founded only two or three years ago, this was an astronomical price.
Of course, in that market, it wasn't an astronomical price. At least the market highly approved of the acquisition. Cisco's market value surpassed Microsoft's six months after acquiring Cerent, becoming the world's most valuable technology company.
Moreover, several companies on the same level as Cerent at the time, such as Juniper Networks and Sycamore Networks, had their market values exceed $10 billion after listing on NASDAQ earlier next year.
"There's a lot of opposition here. After everyone saw the materials you sent over, many people objected," Ji Jiasheng said.
"Do our people object too?" He Zhengcheng asked, feeling a bit uncertain at this point.
"Except for Chao Yang..." Ji Jiasheng replied.
"I don't have a reason to convince them. I believe this market is falling into a frenzy. Now is not the time for rationality, but to seize opportunities as quickly as possible.
After this investment, KPCB might give us two or three opportunities to cooperate! He seemed to have this intention during the negotiation, but I didn't react at the time and only realized it after I came back. Now, perhaps you can make up for it after you return!" He Zhengcheng said.
"This time it's a bit too obvious!" Ji Jiasheng commented. Sacrificing investors' interests for one's own gain is an inevitable choice for every investment and financial institution.
Perhaps there are pure-hearted individuals in the financial world who genuinely prioritize clients, but he truly didn't know any. The problem was not to be too blatant about it.
"The market's valuation model for this industry is changing. We either play it safe or be aggressive. If investors want huge returns but don't want to take risks, they might not be our target customer group," He Zhengcheng said.
"It seems we can only separate these investors!" Ji Jiasheng concluded.
"Cerent and eBay actually don't have much difference. Both are loss-making companies with small revenue scales but huge potential!
How about I arrange for someone to take some equipment to Hong Kong? The Telecom companies there might know the value of Cerent454," He Zhengcheng suggested.
"Perhaps we can try that!" Ji Jiasheng agreed.
"Oh, right, how is the Lenovo matter progressing?" He Zhengcheng asked.
"Very smoothly. The contract is about to be signed. I might also serve as a non-executive director of Lenovo then," Ji Jiasheng replied.
"Oh, that's good. The Daxia Country market will be half-opened to us! What's the price?" He Zhengcheng asked.
He finally managed to buy 500,000 shares of Lenovo through financing when the stock price dropped to around 2.0, bringing his total to 1 million shares of Lenovo stock.
"The price is a bit high, 2.58 Hong Kong dollars per share," Ji Jiasheng said.
"It's not expensive. It's lower than my expectation!" He Zhengcheng replied.
"You only look at the goal, not the price," Ji Jiasheng remarked.
"Those who haggle over every penny won't achieve great things," He Zhengcheng said.
"Alright, you maintain the relationships over there, and I'll handle things here as quickly as possible," Ji Jiasheng said. He hadn't expected He Zhengcheng's execution ability to be so strong.
It just lacked cost-effectiveness. Perhaps if he had personally intervened, $10 million would have been enough.
Ji Jiasheng's thought was merely an imagination. How could it be? If it weren't for He Zhengcheng's reckless actions, somehow touching Khosla, they wouldn't have had a chance. And now, the evidence was about to arrive.
"Cisco wants to invest in Cerent?" He Zhengcheng received a call from Russo, the head of Cerent.
"That's right. Mike Volpi, Cisco's VP of Business Development, called me. They want to invest in Cerent," Russo confirmed.
"So, what about my investment? Are there any changes?" He Zhengcheng asked.
"No, we've already signed the contract, so we won't breach it.
But..." Russo said.
"As expected, there's a 'but'!" He Zhengcheng knew it wouldn't be good news.
"Cisco's involvement means the shares we can transfer will be reduced accordingly. But don't worry, the price won't change!" Russo reassured him.
"MMP!" He Zhengcheng was very displeased.
"When will the negotiations with Cisco begin?" He Zhengcheng asked.
"November 1st, Monday," Russo replied.
"I need time to consider!" He Zhengcheng stated.
"No problem, you have time to consider!" Russo said.
He Zhengcheng hung up the phone, feeling somewhat dissatisfied. If it weren't for the delays in Hong Kong, this investment would have already entered the next stage, and Cisco's involvement wouldn't have affected them. Now, well... "How much longer do you need to decide? Cisco is already going to invest in Cerent at our price, and they're going to squeeze our investment share! Do you or do you not want to invest..." He Zhengcheng roared over the phone.
"Cisco wants to invest in Cerent?" Ji Jiasheng asked.
"They've expressed their intention to invest and are willing to negotiate with Cerent based on the price we offered.
Compared to Cisco, we have no advantage! On Monday, November 1st, Cisco and Cerent will officially begin negotiations. Perhaps they'll even start earlier. If we can't provide the funds and haven't made a final decision by then, this investment is destined to be beyond our reach!" He Zhengcheng fumed. Shanhai Capital's due diligence hadn't even started. How could he not be angry?
Ji Jiasheng also felt bad. He had said he would return to Silicon Valley in three days last time, but he hadn't expected it to drag on for so long.
Shanhai Capital's investment in Cerent could disregard success or failure; as long as they invested, it would be a success. But investors had to consider and worry about risks, and he had little control over that.
Immature, so immature. Not only were their partners immature, but the operational model of their established company was also immature.
He Zhengcheng hung up the phone, and Ji Jiasheng quickly contacted various investors.
"Cisco is about to invest in the Cerent you looked down upon. They don't need our investment anymore.
However, there are contractual restrictions for now, so we can't shake them off. What other opinions do you all have? Do you want to invest or not?" Ji Jiasheng asked.
"Are you sure Cisco is going to invest?" an investor asked.
"The price won't be lower than our offer. Everyone knows Cerent's flagship product, and you all have your own judgment on its market potential.
I'm not going to discuss it with you today. Those who want to invest, invest. Those who don't, Shanhai Capital will be responsible for this investment ourselves," Ji Jiasheng said, no longer compromising.
"I'm willing to invest!" said a middle-aged fat man who had previously strongly opposed it.
"You're not reconsidering!" another person scoffed.
"I've already considered it!" the middle-aged fat man replied.
"I trust your professionalism!" another person expressed support.
"Then let's calculate the investment amount. This time, we might not need $15 million, so everyone should be mentally prepared," Ji Jiasheng said.
Before raising funds, Shanhai Capital stated that its investment focus would primarily be in Daxia Country. He Zhengcheng's investment in eBay had already used up the free allocation available for Silicon Valley. Large-scale investments again required investor authorization, which was why it was so troublesome.
"I trust you. This time, a slightly higher price is acceptable. Try to hold onto the investment quota and don't let it decrease," an elite-looking investor said.
"I'll do my best. Originally, after investing in Cerent, we would gain the friendship of Silicon Valley's legendary venture capital firm, KPCB, and obtain opportunities for cooperation. Now it's a pity; before, they needed us, but now we need them," Ji Jiasheng said.
"Why didn't you say so earlier? If you had told me earlier, I would have agreed long ago!" the fat man exclaimed.
"It's not too late now. I need more free allocation to avoid such situations next time," Ji Jiasheng said.
"This needs some consideration!" the middle-aged fat man said.
"No problem. Those who agree to more free allocation will have priority in obtaining this investment right," Ji Jiasheng threw out the bait. Small companies without established credit were always troublesome, and all sorts of bizarre things could happen.