Return to 88: Starting from Marrying My Sister-in-law

The damp, salty sea breeze from Hailan Island still seemed to cling to his suit, but Wu Ying, sitting on the flight to Hangzhou, felt no warmth whatsoever.

The word "buyout" from Lu Yang was like an ice pick piercing his heart, stirring it repeatedly.

He closed his eyes. Lu Yang's sharp, hawk-like gaze, his unquestionable tone, and the composure with which he instantly transitioned into the warmth of family all made him feel an unfathomable pressure.

Upon landing, Wu Ying went straight to UTStarcom's temporary headquarters without a moment's rest.

Pushing open the conference room door, partner Lu Hongliang was deep in thought, staring at the technical architecture diagram on the whiteboard.

This American-Chinese tech guru, a graduate of UC Berkeley, is the key integrator of UTStarcom. It was through the matchmaking of Masayoshi Son of SoftBank that Wu Ying's Starcom was merged with his own UT company, and he became its CEO.

Wu Ying's "chance" investment plan in Hainan was originally conceived by Lu Hongliang. They urgently needed funds to cooperate with the local telecommunications bureau in Hangzhou. First, they needed to ensure that the entire city of Hangzhou, including the surrounding areas, was within the coverage of Xiaolingtong's signal. Only in this way could they hope to truly promote Xiaolingtong to a wider inland market.

Otherwise, if they can't even get off to a good start, what hope is there for the future?
"Hongliang!" Wu Ying's voice carried a hint of fatigue and lingering shock.

Lu Hongliang turned around, adjusted his glasses, and keenly noticed his old partner's unusual behavior.

"Old Wu? The talks didn't go well? That Mr. Lu... has a big appetite?"

He knew Wu Ying; he wouldn't have lost his composure like this unless he had encountered a huge shock.

Wu Ying slumped heavily into his chair, gulped down a large mouthful of water as if to suppress the dryness in his throat, and exhaled heavily, saying, "It's not just big... it's... it's enough to make you want to flip the table!"

He recounted the entire meeting with Lu Yang at lightning speed, emphasizing Lu Yang's goal: it was not just about investing in UTStarcom to operate Xiaolingtong, but about buying out the core PHS technology patents held by the Japanese from the source, and securing ownership of the mainland market for at least thirty years!

"...Tens of millions of dollars, and he even said 'funding is not a problem'! Hongliang, this kid isn't interested in the profits and dividends from our company's operations at all. What he wants is the future. He's betting that our Xiaolingtong users will experience explosive growth, so that he might be able to recoup the money he spent on buying out the patent tenfold or a hundredfold in the future. Do you think I'm right?"
But what if it really is as Mr. Lu imagines?
So, what about UTStarcom?

"From now on, will we just be employees in his eyes? What if he tries to hold us hostage or charge us exorbitant patent fees? Will we have any way to fight back?" Wu Ying's voice was filled with barely concealed anxiety and lingering fear.

Lu Hongliang listened quietly, his fingers tapping unconsciously on the table.

As a technology leader and strategist, he recovered from the shock faster than Wu Ying and began a cold, hard cost-benefit analysis, his glasses reflecting a calm light under the incandescent bulb.

“A decisive blow… This Mr. Lu has a sharp eye and even ruthless methods.” Lu Hongliang spoke slowly, his voice low and rational.

"He bet on the explosive potential of the mainland market, which far exceeds that of Japan. If he bets right, it will be a business with huge profits, or even no profits at all. We... have indeed become the fulcrum for him to leverage this opportunity."

"Then what do we do? Reject him? But we desperately need funds! Without new money coming in, the promotion plan for Xiaolingtong will be greatly delayed, or even canceled! We may miss the window of opportunity in several pilot cities in the mainland!" Wu Ying tugged at his tie in frustration.

“Refuse?” Lu Hongliang shook his head, a glint of light flashing in his eyes. “No, Lao Wu. On the contrary, this may be… a bigger opportunity for UTStarcom.”

Wu Ying suddenly looked up: "Opportunity? We've lost the initiative!"

"In the short term, yes." Lu Hongliang stood up, walked to the window, and looked at the streetlights just coming on outside. "But think about it, if President Lu wants to buy out the patent, who does he need? He needs our deep understanding of the source of Japanese technology, the initial network of operator relationships we have built in mainland China, and UTStarcom as a platform to implement the operation!"

No matter how powerful he is, he still can't bypass us when it comes to technology implementation and market expansion.

We may have lost ultimate control of the patents, but in return, we gained a powerful investor with clear goals who was willing to invest heavily in promoting Xiaolingtong (a type of mobile phone service).

More importantly…” He turned around, his eyes fixed intently on his old friend’s, and said, “After he successfully buys out the patent, UTStarcom will become one of the de facto core operators and biggest beneficiaries of the mainland PHS (Personal Handyphone System), because he has locked in the patent costs! The better we promote it, the larger our user base, the more licensing fees he collects, and the more lucrative our operating profits will be! It’s a lose-lose situation, and a win-win situation!”

Wu Ying was stunned. Lu Hongliang's calm analysis was like a bucket of cold water, extinguishing some of his anxiety and also illuminating another possibility. "You mean... binding?"

“Yes! Deep integration!” Lu Hongliang said decisively, “Accept his investment and fully assist him in completing the patent buyout.”

We at UTStarcom will be an indispensable part of his grand vision.

"And..." he paused, a meaningful expression appearing on his face, "This matter is inextricably linked to one person."

“Mr. Masayoshi Son!” Wu Ying immediately realized.

SoftBank Group is not only a major shareholder of UTStarcom, but Masayoshi Son himself was also the one who facilitated the merger. He was extremely optimistic about the prospects of PHS (Personal Handyphone System) in mainland China and invested a lot of resources in it.

“That’s right.” Lu Hongliang nodded. “Mr. Sun has extensive connections in both the political and business circles in Japan. Having him mediate and put pressure on NTT and DDI Pocket in Japan to push for negotiations will be much more effective.”

Moreover, introducing Lu Yang to Mr. Sun would only benefit us.

The collision and alliance of these two major capital forces may bring unprecedented impetus to PHS (Personal Handyphone System), and UTStarcom stands at the center of this synergy.

The two weighed their options and had a heated discussion in the conference room, while the night deepened outside the window.

Ultimately, a consensus was reached.

Instead of resisting this "dragon" that suddenly intrudes and may swallow up the fishpond, it is better to take the initiative to jump onto the dragon's back and use its power to open up a wider sky.

He accepted Lu Yang's conditions, assisted him in buying out the patent, and brought Masayoshi Son into the game.

Wu Ying took a deep breath, picked up his phone, and dialed the number on the scalding hot business card.

When the call connected, Lu Yang's steady voice came through: "President Wu?"

“Mr. Lu,” Wu Ying tried to make his voice sound calm and firm, “Hong Liang and I have discussed it. UTStarcom fully supports your… ‘buyout’ plan! We are willing to accept your investment and use all our resources and connections to assist you in acquiring the 30-year ownership of PHS technology in the mainland market!” On the other end of the phone, Lu Yang seemed unsurprised, his tone carrying a hint of approving laughter: “Very good, Mr. Wu, Mr. Lu, a wise choice. UTStarcom will be glad we made this decision today.”

“Furthermore,” Wu Ying glanced at Lu Hongliang and continued, “we suggest that we involve another investor in UTStarcom, Mr. Masayoshi Son of SoftBank Group. He has enormous influence in Japan, and having him coordinate would make the negotiations go more smoothly. We can introduce you to him.”

"Masayoshi Son?" Lu Yang's voice paused for half a second, then his smile deepened. "Good! Excellent! With Mr. Son joining us, this game becomes even more interesting. Then I'll trouble Mr. Wu to arrange a meeting as soon as possible to discuss the details."

Lu Yang readily agreed, as if Son Masayoshi's involvement had already been part of his strategic planning.

However, the course of a game is not always controlled by one person.

When Wu Ying, with mixed feelings, reported Lu Yang's conditions and intentions in detail to Masayoshi Son, who was far away in Tokyo, the investment tycoon, known for his sharp insight and tough style, fell into a long silence on the other end of the phone.

“Mr. Wu, Mr. Lu…” Masayoshi Son’s voice came through the radio waves, carrying a calm that seemed to foreshadow a storm, “Do you know why I pushed so hard for the merger of UT and Skoda and continued to invest resources in it?”

Wu Ying's heart tightened: "Because you are optimistic about the huge potential of PHS phones in mainland China."

“That’s right!” Masayoshi Son’s voice suddenly rose, carrying a hint of offended coldness. “I see an opportunity for the explosive growth of the mainland telecommunications market in the next ten years, and PHS is the sharpest knife to cut into this market!”

UTStarcom is the telecommunications company I'm most optimistic about right now.

Now, the shoe is about to drop, the test net is about to be laid out, and the harvest season is just around the corner…

His tone suddenly turned fierce, "But then Lu Yang from Century Group suddenly appeared. He not only wants to invest, but also wants to bypass UTStarcom and directly buy the 'forging formula' of that knife? To hold the biggest source of future profits in his own hands? To make UTStarcom and even Masayoshi Son work for him? There's no such thing as a free lunch!"

Masayoshi Son's anger and toughness exceeded Wu Ying's expectations.

This person was unwilling to let the fruits of his long-planned efforts and imminent harvest be easily snatched away by a young man who suddenly appeared out of nowhere.

“Mr. Sun, President Lu, he…” Wu Ying tried to explain Lu Yang’s strength and determination.

“I know he’s rich!” Masayoshi Son interrupted him, his voice carrying an unquestionable authority. “But the rules must be set by me! Listen, Mr. Wu, tell that Mr. Lu: I, Masayoshi Son, can help, I can use all my resources in Japan to facilitate this patent buyout. But—”

He deliberately drew out his words, each one sharp and forceful:
"The acquiring entity must be UTStarcom! Only UTStarcom! The technology patents must be firmly held by UTStarcom! Only by having UTStarcom as the acquiring entity can we ensure that all our shareholders—myself, Masayoshi Son, your founding team, and Lu Yang—can fairly and continuously share in the huge success of PHS in mainland China! Otherwise, there's no point in discussing anything!"

This condition, like an iron gate, crashed down.

Masayoshi Son wants to ensure that UTStarcom's position as the core platform remains unshaken and that his own control over the game is not diluted.

Wu Ying's heart sank. He understood Masayoshi Son's insistence, but the other man seemed even younger and might have his own convictions.
The negotiations immediately reached a stalemate.

With a heavy heart, Wu Ying dialed Lu Yang's number again and carefully relayed Son Masayoshi's unquestionable conditions.

Lu Yang remained silent on the other end of the phone.

The sea breeze seemed to faintly come through the receiver.

Wu Ying could imagine the young tycoon standing on the reef at this moment, gazing at the sea with deep eyes, the silence of those few seconds feeling as long as an eternity.

Finally, Lu Yang's voice rang out, calm and unreadable: "The acquiring entity must be UTStarcom?"

“Yes…yes, Mr. Lu, Mr. Sun is very insistent on this point; it’s the prerequisite for his help,” Wu Ying added nervously.

“Hehe…” Lu Yang suddenly chuckled, his laughter carrying an air of knowing everything and a hint of cold calculation. “Mr. Sun is indeed a seasoned veteran; his calculations are ingenious. Alright, I can agree to this condition.”

Wu Ying could hardly believe his ears: "You...you agreed?"

“Yes, I agree.” Lu Yang’s tone was firm. “Using UTStarcom as the acquisition entity is no problem.”

Just as Wu Ying felt a sense of relief, thinking the situation had taken a turn for the better, Lu Yang's next words were like a precise scalpel, cutting into a more core interest:

"However, Mr. Wu, since the acquiring entity is UTStarcom, we can't expect Mr. Sun or the money to fall from the sky to come for the huge amount of funds required for the acquisition, can we? UTStarcom's current assets probably can't even come up with a fraction of that amount."

Lu Yang's voice carried an air of self-assured authority:
“When we discussed investment before, I only asked for 20% of the shares, as is customary in the industry. Now it seems that this is far from enough. Since this crucial acquisition is to be carried out with UTStarcom as the main entity, in order to ensure the success of the acquisition, and to demonstrate my firm confidence in and deep commitment to UTStarcom’s future development…”

He paused, then clearly presented his bargaining chip:

"I've decided to increase our investment and significantly increase our stake in UTStarcom! Based on the current market valuation, what is UTStarcom worth? How much capital is needed to complete this patent buyout? I, Lu Yang, will cover the entire shortfall! And I request that Mr. Sun and the two founding shareholders also relinquish their corresponding shares. This way, UTStarcom will have ample resources to complete the acquisition, and our interests will be truly aligned, allowing us to share in the future market dividends worth tens of billions. Mr. Wu, do you think Mr. Sun will accept this proposal?"

On the other end of the phone, Wu Ying's hand holding the phone trembled slightly.

Although Mr. Lu on the other side is very young, his move of retreating to advance and then increasing the stakes was very well played!
What should I do?

Do you want to agree?

UTStarcom has few original shareholders, and most of the shares are in the hands of the two founders, Lu Hongliang and Sun. Given this situation, it is unrealistic to expect the investor, Mr. Sun, to voluntarily bleed money; only the two founders themselves can do it.

Because only the two of them own the largest number of shares in the company.

But... (End of Chapter)