What's wrong with me being a rich man?

Chapter 699 Resale
Silicon Carbon Group is about to hold its second car launch event in Q4.

Since the launch of Kyushu at the end of February last year, Silicon Carbon Group has achieved success in various fields, continuously breaking the sales record of its own brand in the high-end market, and successfully overcoming obstacles to list in Hong Kong.

Liu Chiping himself owns a six-seater Max Kyushu and has a good opinion of it, but looking back at the company's development over the past year and a half, he can't help but be surprised.

Although Silicon Carbon Group's performance in the Hong Kong stock market is currently mediocre, the significance of this company cannot be measured solely by its market capitalization.

Liu Chiping did not immediately return overseas. While in Lingang, he attended an internal meeting of Silicon Carbon Data to analyze and discuss the future competitive landscape of short videos, and also experienced the upcoming five-seat version of Kyushu in depth.

This can be considered a tradition in the carbon silicon ecosystem, with people like Zhong Zhiling, Lü Haiying, Yang Zhenyuan, and Ge Zhijie being early adopters.

Liu Chiping wasn't very interested in the car. After a few days, he only had one intuitive feeling: it seemed to be... a bit more resilient, especially when turning.

On the last day of July, Li Song, who had been in charge of the Peak Hedge Fund, returned from Hong Kong and immediately held an online meeting with LPs to discuss the establishment of a special VC sub-fund.

To be fair, hedge funds haven't been operating for very long, yet they're already trying to put some of their funds into VC sub-funds with longer lock-up periods. This kind of behavior is really a bit too hasty.

However, this is not entirely mandatory. The choice of funds this time is up to the LPs. As for those funds that want to come in because they are betting on Brexit, a slight allocation has been made.

In just two days, Li Song gave Liu Chiping a clear answer: the fund could handle the financing, and the two sides quickly reached a valuation agreement.

MusVid has completed three rounds of financing to date. The first round was with IDG and Breyer Capital, taking into account the latter's connections at Facebook and in the United States, which did provide assistance in issues such as music copyright. The second round was with a $1000 million injection from Silicon Carbon Data for the company's development. The third round was with the introduction of Temasek Holdings from Singapore, firstly because the company's headquarters are currently located there, and secondly because an agreement has been reached with Temasek on domestic matters.

At that time, there was some dispute over the repurchase of Douyin's shares by Silicon Carbon Data, and Temasek smoothly stepped in.

The three rounds of financing each had their own purpose. The previous round valued the company at $5 million, and this round was aimed at maximizing the window of opportunity for overseas competition.

Liu Chiping, representing MusVid, communicated with three institutions. This time, they were offering 10% of their equity to raise $20 million, which would raise the company's valuation to $2 billion. However, this time, the investment would be made through a targeted capital increase from the Guoshanfeng VC sub-fund. IDG, Temasek, and Breyer Capital could choose to participate or not.

If you don't follow suit, your equity will be diluted accordingly, but because of the increased valuation, your equity value will still grow.

Liu Chiping first spoke privately with Mr. Xiong of IDG and obtained his approval before talking to Temasek and Breyer. He thought Temasek might be dissatisfied because this targeted investment would not allow the original shareholders to increase their shareholding, and Temasek naturally had no shortage of funds.

However, while Temasek expressed understanding in principle, Breyer Capital, which had not participated in the previous two rounds of financing, suddenly expressed its opposition, and even the founder, Jim, himself did not approve of the financing.

“This is a related-party transaction, this is a transfer of benefits. The actual controller of Guoshanfeng Hedge Fund is Mr. Yu. I do not agree with the valuation and target of this financing.”

Jim informed Liu Chiping of this directly over the phone, and then called Yu Xing later, giving the same explanation.

Breyer Capital's reaction surprised Liu Chiping and Yu Xing, and also surprised Xiong Xiaoge, who had introduced them. So he and Jim went to negotiate the financing again, but they still got a clear response.

On the evening of August 4th, Xiong Xiaoge brought General Manager Yu and General Manager Liu to an online meeting room and described in detail her communication with Jim.

"Jim is very determined this time, which is quite unusual."

Logically, with no activity in the first two rounds, the earliest investments should have already multiplied tenfold. Jim shouldn't have much objection; he's not the kind of person who would condemn short sellers out of a sense of justice. After describing it, Xiong Xiaoge was completely puzzled and joked, "Related-party transactions and transfer of benefits again, Mr. Yu, could it be that he's trying to short your company?"

Yu Xing said with a hint of helplessness: "Silicon carbon hasn't even been included in the short-selling list yet. Throughout the year, I've spent three months on related-party transactions, three months on transferring benefits, three months on market manipulation, and three months on various investigations."

Hearing Mr. Xiong and Mr. Liu's laughter, he continued, "Since you know him well, why don't you talk to him some more? No matter how much he objects or considers it, our financing plans will not change."

Breyer Capital holds 10.125% of the shares, making it the third-largest shareholder of MusVid. However, its parent company, Silicon Carbon Data, still holds 61.65% of the shares. Even after this round of financing, it will still have absolute control with 55.485%, not to mention the positions of other shareholders.

Even if Jim speaks out, things won't change, but people still want things to look better, since Facebook still has resources, which is an important channel for future traffic.

Xiong Xiaoge agreed to the matter and planned to fly to the United States in person to talk to Jim.

The next day, as he was preparing for his trip to the United States, a report from Hong Kong media caught his eye, mentioning that Silicon Carbon Group had just announced its July sales figures—15,100 vehicles.

This is still a very high number, but it represents a 9.6% month-on-month decline compared to the record high of 16,700 vehicles in June.

"July for Silicon Carbon Group is a dividing line, and it also strongly reflects its dependence on mainland cash subsidy policies for the first time."

“The mainland clearly stated last year that national and local subsidies would be phased out, but Shanghai and Zhejiang continued the original policy. The record sales of Silicon Carbon Group in June were stimulated by the impending end of the policy in these two core sales regions.”

“The subsidy policy is like giving someone a shot of adrenaline, but the effect of that adrenaline will weaken over time. In five months, the Silicon Carbon Group will face another round of subsidy reductions. Moreover, it is foreseeable that it will experience such a decline every year.”

“We visited second- and third-tier cities in mainland China, and the evaluation of carbon silicon as a range-extending new energy source is not high. In the past, a large proportion of its sales were concentrated in first-tier and quasi-first-tier cities with license plate restrictions.”

"Cash subsidies will not last, nor will preferential license treatment. The future of Silicon Carbon Group is worrying."

Xiong Xiaoge was not worried. He just noticed that a group of Hong Kong media outlets suddenly started reporting on silicon carbon sales, and he felt that there was something unusual about it.

This kind of public opinion situation naturally wouldn't bother Mr. Yu, but just after the plane tickets to the United States were booked, a new message from Breyer Capital surprised Xiong Xiaoge.

Breyer Capital transferred its 10.125% stake to Facebook, making it the third-largest shareholder of MusVid.

The unusual situation has been resolved.

Xiong Xiaoge canceled her flight and flew to Shanghai instead.

He couldn't get through to Jim on the phone. Thinking about the impact of the news, he regretfully sent a text message to his old friend with whom he had a business relationship.

"Jim, you've made the worst decision of your life."

(End of this chapter)