Restart life

Chapter 506 0494 [Old Ancestor Chen: More Than Good at Making Things Happen]

Chen Guiliang called Wang Wei and only said two words: "Want to chat?"

Wang Wei flew over that very night and went straight to Chen Guiliang's house.

"You haven't eaten yet?"

Chen Guiliang smiled and called out, "Aunt Zhang, could you please cook three bowls of noodles?"

Bian Guanyue said, "I don't eat late-night snacks because they make me gain weight easily."

“Okay, then I’ll cook two bowls,” Chen Guiliang introduced, “This is my girlfriend, Bian Guanyue.”

Wang Wei quickly shook hands: "Hello, sister-in-law!"

While Aunt Zhang was cooking noodles, Chen Guiliang took Wang Wei to the study to discuss some matters.

Chen Guiliang immediately started a fight: "Those shareholders don't respect you as the founder at all. No matter what the plan is, they never even considered listening to your opinion."

"I bear the greatest responsibility for how the potatoes turned out this way. What right does a sinner have to speak?" Wang Wei said with a bitter smile.

Chen Guiliang didn't mince words: "With the two of us working together, we have more than a third of the voting power. In major decisions, they can't get anything done as long as we disagree."

After Tudou.com went public, Wang Wei's personal shareholding was diluted to 8.6%. However, he still retains 25.4% of the voting rights!

If other shareholders reach a consensus and the vote exceeds two-thirds, they can forcefully push for the merger of Tudou and Youku.

Therefore, in the original timeline, during the initial negotiations with Youku, Wang Wei, the founder, was not involved at all.

But now, Chen Guiliang can join forces with Wang Wei.

Although their combined shareholding is less than 20%, their voting rights exceed one-third.

They can't get anything done, but they can cause trouble.

For example, a proposal to merge Tudou and Youku would never receive two-thirds of the votes. It would never pass!

What's that sentence called?

Incompetent bungler.

Chen Guiliang never imagined that this idiom would one day be used to describe him. And it was incredibly fitting, perfectly capturing the literal meaning.

Wang Wei asked, "Does Mr. Chen really want to control Tudou.com?"

Chen Guiliang retorted, "Don't you think Tudou.com has too many shareholders now? You have to consider their opinions no matter what you want to do. Once Tudou merges with Youku, you'll definitely be fired. At most, they'll give you a little face and let you be the vice president of the merged company for a year. After that, you'll be as far away as possible."

Wang Wei said, "I want to know President Chen's overall plan."

Chen Guiliang said, "It's very simple. Let Tudou's stock price continue to fall, and at the same time, stop the merger plan between Tudou and Youku. Let it fall until those venture capitalists can't take it anymore, and then I'll step in and take over. What white knight? It's all bullshit. What I released that day was all a smokescreen. It's only been listed for half a year. How can I buy their shares? It's too troublesome to buy them. I would have to sign a long-term agreement."

Those venture capital firms were all original shareholders of Tudou.com. Only a portion of their shares could be unlocked six months after the IPO. They would have to wait a full year for all their shares to be released from lock-up.

In other words, even if IDG were willing to sell all its shares to Chen Guiliang, it could only trade a small portion for the time being. The remainder would require a long-term agreement, and the transaction could only be completed after a 12-month lock-up period.

Wang Wei asked, "What happened after Mr. Chen bought those shares?"

Chen Guiliang said, "They are venture capitalists, only thinking about cashing out and leaving. We are the ones who are truly building a business. I will regard Tudou.com as a piece of ByteDance's business empire. And you will continue to be the CEO of Tudou.com, and I will give you the greatest autonomy. However, on some major development issues, I need you to respect my opinions enough."

"I feel like I can't refuse," Wang Wei said with a smile.

He now only has two choices: either agree to cooperate with Chen Guiliang, or passively listen to the shareholders, let Tudou.com merge with Youku, and then he can take a sum of money and leave.

Anyone with a sound mind would choose the former.

Chen Guiliang asked, "Is there a problem with the funding for potatoes?"

Wang Wei said, "We raised more than $1.7 million in the IPO. Because the stock price fell below the offering price on the first day, I haven't dared to spend money recklessly. Now, six months later, the company still has $1.2 million in cash. The main expenses, besides salaries, are servers, bandwidth, and purchasing film and television copyrights."

“Then there’s no problem. It’s enough to last until I take over,” Chen Guiliang said with a smile.

As we mentioned earlier, due to VIE risks and the US debt crisis, this year has been extremely difficult for Chinese companies listed in the US. A total of 163 companies have either been delisted or seen their share prices fall below $2!
Given Tudou.com's current situation, if no measures are taken, its stock price will eventually fall below $2, or even below $1.

Wang Wei and Chen Guiliang may not be able to boost the stock price, but they can definitely drive it down.

"The noodles are ready," Bian Guanyue said, knocking on the door.

When Wang Wei came out of the study, he was all smiles, no longer looking gloomy and dejected.

Bian Guanyue and Aunt Zhang brought over the noodles and laid out various condiments on the table. "Try these Sichuan-style noodles. The flour from Sichuan isn't great, but the condiments are absolutely amazing," Chen Guiliang said warmly.

Wang Wei tried to match the seasonings with Chen Guiliang's instructions, but accidentally added a bit too much spice. In a good mood, he wolfed down his noodles.

After filling their stomachs, they continued their conversation in the study, mainly discussing the future development of Tudou.com.

……

For the next period of time, Wang Wei handled the company's business as usual, while Chen Guiliang flew to the United States to oversee the establishment of Youke's subsidiary.

They still participate in video board meetings and the like as usual.

Wang Wei remained silent, while Chen Guiliang kept saying that the other directors' bids were too high.

Those venture capitalists naturally wouldn't put all their eggs in one basket and foolishly wait for Chen Guiliang to buy their shares at a premium. In particular, Fu Jixun of GGV Capital was exceptionally enthusiastic about the merger plan between Tudou and Youku.

Finally, someone initiated a shareholders' meeting to vote on the merger plan between Tudou and Youku.

Wang Wei and his founding team, along with ByteDance represented by Chen Guiliang, all voted against the proposal. The opposing votes accounted for 37.2%.

Unable to pass.

Many shareholders were dumbfounded. It was obvious that Chen Guiliang had done it on purpose and had already discussed it privately with Wang Wei.

Previously, they had not taken Wang Wei seriously. Even with the use of the dual-share structure, Wang Wei only had 25.4% of the voting rights.

As long as the other shareholders are united, they can completely ignore Wang Wei.

Then Chen Guiliang suddenly appeared and actually stood on Wang Wei's side.

Fu Jixun slammed his fist on the table in anger: "President Chen, are you trying to buy our shares at an insanely low price? You can't do this! There are rules to investing!"

Chen Guiliang looked completely innocent: "I didn't force you to sell. I never do anything that involves forced buying or selling. Besides, you can stay put forever. The potato stock price will eventually rise again. It's not even been a year since the lock-up period started, so what's the rush?"

Fu Jixun said, "President Chen, you have to be reasonable in everything. If you're doing things this way, venture capitalists won't make money. How will they invest in those small companies in the future? Let's put that aside for now. I was partly involved in the initial investment in ByteDance. Now that ByteDance has grown so big, are you just going to turn your back on me?"

Chen Guiliang laughed and said, "ByteDance's stock price plummeted at the time. I raised funds to buy back shares and boost the stock price so you could cash out and make money. Although it didn't meet your expectations, who can say they didn't make a profit? It was during an economic crisis, and it was good enough that you made money. Even if there was any favor between us, I've already repaid it all."

Temasek is the largest shareholder of Tudou.com. Its representative, Seow Woon Kwong, said, "Mr. Chen, we cannot sell if the price is too low. At worst, we can just hold on to it; the shares won't rot away."

Chen Guiliang said, "I'll say it again, whether you sell or not is your own business. I was an angel investor in Tudou.com, and I also made follow-up investments in subsequent rounds. I also gave a lot of advice on the development of Tudou.com, unlike you who just invest money and then ignore it. I have an emotional attachment to Tudou.com and will absolutely not allow it to be merged into Youku."

Seow Woon Kwong said with a sullen expression, "Mr. Chen, as long as we pass the merger plan and reach an agreement with Youku to announce the news, Tudou's stock price will immediately rise. It will benefit everyone. If you want to manage Tudou and bring benefits to your ByteDance, we can even discuss adding more board seats for you."

Chen Guiliang sneered, "What's the use of adding more board seats to Tudou.com? In the merged company, none of you original shareholders will have a say. Goodbye, I don't want to say anything more. You can initiate a vote, no matter how many times you do, I will vote against it!"

Chen Guiliang left as soon as he finished speaking.

The other shareholders were extremely frustrated, but Wang Wei was secretly delighted; he felt incredibly relieved.

Chen Guiliang can stall, and so can Wang Wei.

Those venture capitalists simply can't afford to wait. Their plan is simple: once the lock-up period is over, they will gradually cash out and leave the market.

But who knows how long Tudou.com's current situation will last? Even if it bottoms out and rebounds someday, it will be a long and arduous process to recover to its IPO price.

Keep in mind, they've been using Tudou.com for several years!
Li Yongjin is not only a director sent by JAFCO Asia, but also currently serves as the CFO of Tudou.com. After the shareholders' meeting, he asked Wang Wei, "Mr. Wang, what exactly do you intend to do?"

Wang Wei feigned ignorance: "Just do what needs to be done. My responsibility is to run the company well. Although it's not as good as Youku now, Tudou is still the second largest video website in China."

“You know what I want to ask?” Li Yongjin said.

Wang Wei shook his head: "I don't know."

Wang Wei also harbored resentment towards Li Yongjin. JAFCO Asia had appointed him as CFO, yet he hadn't discovered any major financial problems in the company over several years. This led to Tudou.com's IPO failing to meet its initial public offering (IPO) price target!
Wang Wei isn't a professional accountant, but Li Yongjin is. This guy is completely incompetent.

Moreover, as the CFO, he constantly bossed around the founder and CEO.

Wang Wei had been putting up with him for a long time.

After Chen Guiliang took over the company, the first person Wang Wei wanted to fire was Li Yongjin.

Chen Guiliang continued to search for a CEO for Youke's US subsidiary.

The headhunting firm recommended several candidates, but after personally meeting with them, he wasn't very satisfied with any of them. Some were highly experienced and had impressive backgrounds, but after a conversation, they were just so-so.

(End of this chapter)