The Red Era: Living in Seclusion in a Siheyuan as a Boss

Chapter 824 Buying Up Internet High-Tech Companies at Rock-Bottom Prices!!!

With Sky Li Shaofeng achieving a brilliant three-peat at the WCG World Cyber ​​Games, the "Changxiang Esports Club" under the Lianxiang Group has also risen to prominence, not only firmly holding the top spot in the domestic esports industry, but also becoming a leading powerhouse club in the Asian esports circle.

This strategic move has brought substantial returns to the Lianxiang Group.

By deeply cultivating the e-sports field, Lenovo successfully launched its electronic products into the global market through e-sports competitions, with sales soaring and eventually ranking among the top five global electronic brands, achieving a leapfrog improvement in brand influence.

Since the beginning of the new millennium, China's IT and internet industry has developed rapidly, and many brand companies have begun to rise to prominence.

In 2000, Lianxiang launched a computer called Tongxi 100. Unexpectedly, it caused a buying frenzy as soon as it hit the market. Not only were the demo units sold out, but many sales outlets in other regions even issued IOUs to customers.

The reason for its popularity is simple: it's priced at only 5999 yuan.

You have to understand that these days, a desktop computer isn't cheap; they often cost tens of thousands of yuan.

Personal computers, like the "three big items" of the past—bicycles, watches, and televisions—have become the most sought-after daily necessities.

This product launched by Linksys Group represents the development direction of home computers: powerful networking capabilities and user-friendly performance.

Thanks to the reduction in hardware costs and the lower barriers to entry, home computers at Dongguan University have seen a surge in popularity, with the number of internet users steadily increasing.

Statistics show that by the end of 2000, the number of internet users at Southeast University reached 5000 million (2250 million in Liu Zhiye's previous life), of which approximately 4000 million were dial-up users.

It only took 5 years for the number of internet users to grow from hundreds of thousands to tens of millions.

The constantly improving hardware, the urgent and strong demand, and the huge and rapidly growing market make the future of Southeast University's domestic Internet development very bright.

At the end of 1998, ZH.com went public on NASDAQ, becoming the first Dongda Internet company to be listed on NASDAQ.

Even at its peak, ZH.com struggled to rank among the top ten most popular websites. The most important reason for its successful IPO was its superb capital operations.

At the time, ZH.com's IPO reached $120 million, its stock price once reached $249, and its market value exceeded $7 billion.

"Dongda + Internet" is the "wealth code" in the capital market of this era.

The fact that Dongda Internet became the first company listed on NASDAQ provided a valuable experience for others to follow.

For Dongda Internet Company, which is currently practicing the Silicon Valley model, going public in the US in recent years is the most important step in testing whether its entrepreneurship has been successful.

2000年4月13日，新狼成功在纳斯达克上市；6月30日，网一在纳斯达克股票交易所正式挂牌交易；7月12日，搜虎正式在纳斯达克挂牌上市。

In fact, the company that first launched this wave of capital feast was tom.com, which was listed on the Hong Kong Stock Exchange's Growth Enterprise Market on March 1, 2000. It was a subsidiary of Hutchison Whampoa Group.

At the time, Li Jiacheng joined forces with the internet industry, which had an annual growth rate of up to 200%, and the capital market went crazy for him.

tom.com obtained the number "top dog" (8001) in the ChiNext market, with an oversubscription of 669 times, and the stock price on the listing day exceeded the offering price by more than 4 times.

Even though tom.com was still losing money at the time of its IPO, it couldn't stop people's enthusiasm for tech stocks and the internet concept.

In the spring of the new millennium, the future of Southeast University's Internet program looked bright and promising.

In the Hong Kong stock market, internet concept stocks have been enthusiastically sought after.

On March 10, the Nasdaq index, dominated by technology stocks, reached a record high of 5048.62 points, more than doubling from the previous year.

The situation in China is no less dire.

"Internet" and "network" have become popular buzzwords, and websites are being registered and established like mushrooms after rain, with various website advertisements posted everywhere on the streets.

A few people can buy a computer, connect to the internet, register a domain name, and create a few web pages to attract venture capital investment.

Whether they're in real estate or department stores, everyone's starting to do business with ".com" and ".net".

This internet craze has swept the country, with even traditional manufacturing giants diversifying their operations.

In Shenzhen, a company called "Penguin" quietly launched an instant messaging software called OICQ a few years ago, and its user base exceeded 20 million in just three years.
In Hangzhou, Ma Feiyun, an English teacher by training, is working with his eighteen followers in their apartment in Lakeside Garden on a B2B website called "Alibaba".

The frenzy in the capital market has given these startups unprecedented development opportunities. Venture capital firms from all walks of life are lining up to knock on their doors with US dollars, and entrepreneurs can easily obtain millions of dollars in funding with just their business plans.

Among the domestic financial institutions most enthusiastic about investing in the internet and high-tech sector, the two giants are "Jingxi Capital" and "Liu's Financial Investment Group".

Over the years, almost all the well-known high-tech companies in Southeast University have received investment and support from these two financial giants, such as Lianxiang Group, Yanda Founder Group, Huaqing Ziguang Group, Huawei, Haier, Haishen, Bubusheng, BOE, BYD, Tencent, Ali, JD.com, Suning.com, Shengda Network, Xinlang, NetEase, etc. Countless high-tech companies have begun to rise with the support of these two financial giants, and their products are sold overseas.

Burning money on advertising → skyrocketing click-through rates → going public → cashing out – once you embark on this tempting and risky “devil’s journey,” it’s hard to turn back.

Seeing how "Jingxi Capital" and "Liu's Financial Investment Group" made a fortune by heavily investing in technology stocks, countless investors are also feeling their way in the dark and are investing in internet high-tech companies.

Unfortunately, their good fortune didn't last long, but those who came after them weren't so lucky.

On June 30, NetOne went public on Nasdaq. On its first day of trading, it fell below its offering price of $15.50, a drop of nearly 20%, which was described by the media as a "bloody IPO".

On July 12, Sohu successfully listed on Nasdaq, and fortunately, its share price did not fall below the offering price on the first day.

The Wall Street Journal published an investigative article titled "Burning Out," in which the reporter investigated hundreds of internet companies and found that half of them would be unable to pay salaries, and most of the remaining companies would also run out of money in the coming months. If they could not obtain financing, these companies would face bankruptcy.

The Nasdaq index rose rapidly in a short period of time thanks to the concept of internet technology. When the index is pulled up rapidly like a needle standing on end, a major crash is imminent.

After reaching a high of 5048.62, the Nasdaq index began to plummet, falling to only 1172.06 points by September 2002, a drop of 77% in market capitalization.

As representatives of Southeast University's internet companies in the capital market, the three major portals could not escape the impact, and their stock prices continued to decline.

新狼股价曾跌到每股1.02美元。网易股价曾连续9个月跌破1美元，最低时只有0.52美元，一年内市值蒸发90%，2001年更是遭遇停牌。

The Nasdaq stock market crashed, the dot-com bubble burst, and the global internet industry entered a winter.

According to statistics, in the following year or so, nearly 5000 internet companies worldwide went bankrupt or were acquired.

At Tokyo University, thousands of companies disappeared.

FM365, Yanhuang Online, Zhaodaola, Yitang, and "Ku! Bide" were once on par with the three major portal websites. They were pioneers of the first wave of the Internet, but they all fell in the bitter cold.

Major internet companies are trembling with fear, not knowing when they will go bankrupt.

Just when the global internet and high-tech industry was in a slump, "Jingxi Capital", "Liu's Financial Investment Group" and "Liu's Overseas Capital" began to buy at the bottom.

2001年10月，“京西资本”率先以1.1亿美刀收购网一38%股份，随后又以8000万美刀注资新狼。

At the same time, "Liu's Financial Investment Group" acquired a 45% stake in Sohu for US$1.5 million and spent US$2 million to increase its stake in Tencent to 42%.

The contrarian moves of these two financial giants caused a strong stir in the industry. In early 2002, Liu's overseas capital further expanded its global footprint.

Yahoo! Taiwan acquired a 70% stake in Yahoo! East for $3.6 million and a 20% stake in Naver, South Korea’s largest portal website, for $1.8 million.

In Silicon Valley, they acquired PayPal, which was on the verge of bankruptcy, for $3.2 million, a deal that later proved to be one of the most successful investments in internet history.

Liu's Overseas invested $7.5 million to acquire a 15% stake in Google, and then invested $13.5 billion in Amazon to become its fourth-largest shareholder.

At the beginning of this year, "Liu's Overseas Capital" invested in "Facebook", "YouTube", "Netflix"...

"Now is the planting season."

Duan Yongping of "Jingxi Capital" emphasized in an internal meeting, "We must seize this once-in-a-lifetime opportunity and invest our funds in truly valuable projects." They have established a rigorous evaluation system, focusing on a company's cash flow, business model, and founding team.

Unlike the blind following during the bubble period, this bottom-fishing operation demonstrated remarkable professionalism.

In September 2002, two major domestic capital groups jointly established the "Dongda Internet Renaissance Fund," with a scale of up to 15 billion US dollars.

They not only provide financial support, but also assemble an advisory team composed of Silicon Valley experts and local elites to help portfolio companies optimize management and expand their markets.

In the midst of a harsh winter, these measures were like sending charcoal in snowy weather, allowing many high-quality enterprises to survive.

These seemingly crazy bottom-fishing behaviors revealed astonishing strategic vision just a few years later.

As the global internet industry gradually recovers, the portfolio value of "Jingxi Capital" and the "Liu Family Group" has grown exponentially.

In 2003, NetEase achieved profitability through its gaming business, and its stock price soared from less than $1 to $70; Tencent's QQ users exceeded 3 million, and its market value surpassed that of traditional telecom giants; while PayPal became the global payment leader during the e-commerce boom.

In 2004, with Google's IPO, the value of the 30% stake held by the "Liu family" skyrocketed to $90 billion.

At the same time, BOE, invested by "Jingxi Capital", successfully broke through the technological barriers of LCD panels, breaking the monopoly of Japanese and South Korean companies.

Capital sown in the cold winter finally yields a bountiful harvest in the spring.

In 2005, the Nasdaq index returned to 2000 points, and Dongda Internet companies launched a second wave of IPOs.

Baidu's stock price surged 354% on its first day of trading on Nasdaq, setting a record at the time for the highest price ever paid for a foreign company listing on American Express.

NetEase, which was once on the verge of delisting, now has a market value of over 60 billion US dollars.

Those who were ridiculed as "bagholders" when the bubble burst are now revered as investment gods who "turn lead into gold."

However, new challenges have emerged.

With the advent of the Web 2.0 era, new business models such as blogs, videos, and social networks have begun to impact the traditional portal model.

Astute capital once again shifted course, with "Jingxi Capital" investing $5 million in "Renren.com" and the Liu Group betting heavily on the newly emerging Weibo platform.

In this round of reshuffling, the two major capital groups of Dongda University have unanimously turned their attention to the untapped blue ocean of mobile internet, quietly laying out an ecosystem for the 3G era.

The development of 3G has been a process full of changes and breakthroughs.

Actually, 3G network is not a new term. As early as 1985, the International Telecommunication Union (ITU) proposed the concept of 3G with foresight. At that time, it was called the "future public terrestrial mobile communication system".

In 1996, it was officially renamed IMT-2000, a name that signifies its plan to achieve commercial use around 2000, with an operating frequency of approximately 2000MHz and a transmission rate target of approximately 2000kb/s.

Subsequently, fierce technological competition and standards development efforts unfolded globally.

In April 1997, the ITU solicited candidate transmission technologies for the IMT-2000 radio interface from its member states, triggering a nearly four-year-long competition and integration process for 3G technology standards.

Many countries and regions’ communication standardization organizations have put forward their own technical solutions. Among them, ETSI in Europe and ARIB/TTC in Japan jointly proposed W-CDMA technology, TIA organization led by Qualcomm in America proposed CDMA2000, and Dongda proposed TD-SCDMA.

After a series of technical assessments, integration and standardization efforts, in May 2000, the ITU identified three major wireless interface standards: W-CDMA, CDMA2000 and TD-SCDMA, and incorporated them into the 3G technology guidance document, "International Mobile Communications Plan 2000".

After the standards were finalized, countries began to deploy 3G networks commercially in earnest.

Japan is a pioneer in 3G development. NTT DoCoMo launched the world's first 3G service based on the WCDMA standard on October 1, 2001, thus opening the door to commercial 3G.

Subsequently, SKT and KTF from South Korea also actively engaged in 3G operations in 2002, making Asia the forefront of 3G development.

In 2003, Hutchison Telecom 3 launched Europe's first 3G network, and in the same year, Verizon launched 3G services in America, marking the beginning of the gradual rollout of 3G globally.

Last year saw a surge in 3G development, with major operators such as Vodafone and Orange launching 3G services in major European countries including England, France, Germany, and Italy, further promoting the global adoption of 3G.

At Southeast University, the development of 3G in the past two years has also attracted much attention.

In 2003, Southeast University officially issued a 3G license, marking the beginning of a new era for mobile communications in China.

The TD-SCDMA standard, led by Datang Telecom, received policy support and together with WCDMA and CDMA2000, constituted the three major technical routes.

Jingxi Capital keenly seized this historical opportunity and immediately established a special fund, investing a total of 250 billion yuan to invest in upstream and downstream enterprises in the 3G industry chain.

In the terminal field, manufacturers such as Bird and Amoi, which received investment from the "Liu family group", quickly launched a number of 3G mobile phones;

In terms of network equipment, companies such as Huawi and Zhongxing, supported by "Jingxi Capital", have broken through key technological bottlenecks.
At the application service level, the two capital groups jointly invested in innovative projects such as mobile payment and location services.

In 2004, Southeast University launched its first TD-SCDMA chip, breaking the technological monopoly of foreign manufacturers.

With the expansion of 3G network coverage, the mobile internet has experienced explosive growth.

The number of mobile penguin users invested by "Jingxi Capital" has exceeded 1 million, and the daily visits to the mobile portal website controlled by the "Liu family" have surged by 300%.

In the infrastructure sector, the construction of 3G base stations is in full swing.

By the end of last year, 12 TD-SCDMA base stations had been built nationwide, forming a complete industry chain.

SP service providers invested in by "Jingxi Capital" have developed innovative businesses such as ringback tones and mobile newspapers, with monthly revenue exceeding one billion yuan.

The commercialization of 3G has reached a critical turning point. The TD-SCDMA system independently developed by Southeast University has passed the certification of the International Telecommunication Union and has officially become one of the global 3G standards.

This breakthrough demonstrates the remarkable foresight of Jingxi Capital's investment strategy—its invested company, Huawi, was the first to launch 3G base station equipment supporting the three major standards, successfully entering the European market.

In the end-user market, an intelligent revolution is brewing.

Huawei Company received intelligence from "Liu's Overseas Capital" that America's Apple Inc. was secretly developing a revolutionary mobile phone product.

(End of this chapter)