Internet moguls are being held hostage by the entertainment system!

Chapter 482 TikTok's Prospectus, White Elephant Market Crisis

April 3rd, Fangheng Fashion Center.

A pure black Maybach S680 is slowly driving into the underground parking garage.

As the underground parking garage entrance drew closer, Chen Xiu, who was in the car, began preparing for the two meetings that would be held later.

Whether it was Douyin's first quarter summary meeting or TikTok's prospectus confirmation meeting, these meetings were given top priority.

Meng Ziyi is supposed to return from Taohuawu this afternoon, but I don't know if the meeting will end on time...

Thinking of this, Chen Xiu turned her gaze away from the dimly lit underground passage and looked at Luo Shikan sitting next to her.

"Xiao Luo, if the meeting isn't over by 1 o'clock, could you send a message to Wei Feng and ask him to arrange a car to pick up Sister Meng?"

"Ok."

Luo Shikan meticulously recorded everything in his memo.

After finishing taking notes, he looked up and said, "I received an invitation tonight. They called yesterday, but I haven't replied yet. Should I wait until the meeting is over to give a response?"

"What kind of invitation?"

"It was an AI technology exchange meeting initiated by Baidu. The person who called was Li Yanhong's secretary."

"AI?"

After thinking for a moment, Chen Xiu decided to ask Luo Shikan to call back and confirm after the meeting.

Since news of Microsoft acquiring a portion of OpenAI, an investment firm Chen Xiu invested in, reached China, the investment and internet communities have been inviting him to various exchange meetings.

To put it bluntly, these exchange meetings are for learning from each other's experiences.

As one of the earliest major internet companies in China to bet on AI, Baidu naturally wanted to understand the development path of AI on the other side of the ocean.

Chen Xiu and Li Yanhong weren't particularly close, so she didn't really care whether she accepted the invitation or not.

After parking the car, Chen Xiu entered the elevator surrounded by Luo Shikan and his bodyguard/driver.

Back at Douyin Company, Chen Xiu went straight to Conference Room No. 1, pushed open the door, and Zhou Shouzi, one of the main figures in today's meeting, was already sitting inside.

"Hello, Shouzi, good morning."

"Mr. Chen, long time no see."

"How have you been lately? The news from White Elephant doesn't seem to be very good..."

The two shook hands and exchanged pleasantries. Chen Xiu and Zhou Shouzi then discussed the recent censorship crisis that TikTok had encountered in Baixiang.

Zhou Shouzi's reaction was relatively calm: "Actually, it's just a content issue. Our people are negotiating and hope to resolve it through rectification and review."

"The market there isn't very friendly, so we still need to prepare for the worst."

Chen Xiu said solemnly.

The Indian market has always been a prime example of not playing by the rules, and he couldn't guess what jaw-dropping moves they would pull off.

Zhou Shouzi nodded slightly, indicating that he would not allow these matters to affect TikTok's listing plans.

As the two were talking, more and more people entered the conference room.

The presence of Zhou Shouzi here indicates that the first meeting was likely a confirmation meeting for TikTok's prospectus, hence the presence of TikTok's board members.

When Zhang Yiming came in and saw Chen Xiu there, his small eyes suddenly lit up. He pulled out a chair from the next room and moved closer to Chen Xiu.

Seeing this, Zhou Shouzi got up and left under the pretext of distributing materials.

Without being disturbed by others, and in order not to delay the meeting, Zhang Yiming went straight to the point: "Xiu, when did you invest in the overseas AI company?"

"Last year, when Pinduoduo went public."

Chen Xiu answered honestly, but Zhang Yiming still didn't believe her.

“Pinduoduo has been listed for less than a year, and you’ve only been in the US for less than a month. How did you build such a network of contacts in Silicon Valley in such a short time?”

"Even if you're popular and can make friends there, what a coincidence that the company you invested in last year has been targeted by Microsoft this year!"

“Just hearing these words, I can’t believe a single one of them.”

Chen Xiu held up the documents sent by Zhou Shouzi early on, then casually blocked Zhang Yiming's spittle that flew out in excitement, her eyes revealing a hint of disdain.

"If you don't believe me, I can't help it."

"Tsk, I'm not after your shares, so what's there to hide?"

"You've known me since 12, don't you know my schedule these past few years?"

"..."

This rhetorical question left Zhang Yiming speechless.

He knew very well that Chen Xiu wouldn't have time to go abroad between 12 and 14, and then starting in 15, the two of them collaborated to create Douyin...

So what Chen Xiu just said is true. He really did build a Silicon Valley network within a month and then invested in an AI company with unlimited potential.

The best emotional shifts often come from life experiences.

Just as the doubt in Zhang Yiming's eyes instantly turned into disbelief, Chen Xiu looked again and again, but couldn't find any trace of it.

He stared at him in astonishment: "You really..."

"Sister Xiaoxiao is here, quiet down and let's get to the meeting!"

Chen Xiu turned her chair around, declining Zhang Yiming's invitation to whisper.

After Su Xiao came in, she went to see Chen Xiu first, and then found a seat.

Seeing that everyone had arrived, Zhou Shouzi, who had finished distributing the materials, stood up from his seat, holding the same materials as everyone else, and prepared to speak. "OK! This is the TikTok prospectus confirmation meeting. I will speak now. I hope everyone can put their phones on silent and put them on the desktop."

Everyone did as instructed, and Zhou Shouzi took out the first document.

"This is TikTok's financial summary for the first quarter of this year. Total revenue was RMB 46.5 billion, a year-on-year increase of 165.2%. Advertising accounted for 83% of revenue, live streaming rewards accounted for 10%, and the remaining 7% came from new businesses."

"The profit for the first quarter was RMB 12.1 billion. However, if we want to cover the previous losses, the company's net profit is still negative."

"TikTok currently has 8 million monthly active users, and I believe that number will reach 10 billion before the end of this year!"

This last number caused Chen Xiu and Zhang Yiming to show slight changes in their expressions.

After acquiring Musical.ly, TikTok has actually been developing for less than two years, and its monthly active users have already surpassed those of Douyin.

The upper limit of the market determines the upper limit of a product, which is something that cannot be changed by human effort.

After presenting TikTok's first-quarter financial report, Zhou Shouzi picked up a second report.

"TikTok's pre-IPO was completed on December 30 last year. According to the Hong Kong Stock Exchange's regulations, an IPO application cannot be submitted within 120 days after the completion of the pre-IPO. Therefore, this prospectus can be considered an unfinalized initial version."

Chen Xiu quickly skimmed through the prospectus and saw the names of the drafters at the end of the document: Zhou Shouzi and Gao Zhun.

The latter is a CFO specifically brought in to handle TikTok's IPO. He has participated in the IPO plans of dozens of internet companies, including Baidu, Meituan, and Pinduoduo, and is a well-known professional in the industry.

"As you can see, the prospectus is not yet complete. The valuation is tentatively set at US$40 billion, and the target fundraising amount is US$400 billion."

"The funds are mainly used in four areas: technology upgrades and R&D (35%), new service and product development (35%), strategic investment and acquisitions (20%), and working capital and other uses (10%)."

Apart from these two parts, the remaining part consists of the regular business components and financial situation.

The first report is just TikTok's financial report for the first quarter of this year; the prospectus contains detailed reports for nearly three years.

Then there's the shareholding structure; this IPO also follows the dual-class share structure.

The so-called dual-class share structure means that the founders and management team hold Class B preferred shares with 10 votes per share, while public investors hold Class A common shares with 1 vote per share.

This approach ensures that the founders and management team maintain control of the company and prevents it from being maliciously acquired by capital.

After discussing the contents of the prospectus, Zhou Shouzi briefly talked about the roadshow plan after submitting the IPO application and the selection of stock dealers.

There's not much to elaborate on in these parts.

Just as he finished speaking and was waiting for questions from the board members, Chen Xiu's phone, which was on the table, suddenly vibrated and lit up.

Chen Xiu picked up her phone and glanced at it briefly.

Then, he abruptly opened his eyes and unlocked them to check the details of the message…

After another director finished asking his question and Zhou Shouzi gave his answer, Chen Xiu also finished reading the international news that had been pushed to him.

"Shouzi, may I interrupt for a moment?"

"OK, may I ask?"

"I'm not asking you a question. Just look at your phone, and you'll understand."

"Ok?"

Seeing Chen Xiu's serious expression, Zhou Shouzi was puzzled, but he still quickly took out his phone from his pocket.

Seeing this, the others also went to check their own phones.

Zhang Yiming leaned over and asked, but Chen Xiu only said one sentence before his expression changed drastically, and he quickly opened his phone to search.

The news notification on Zhou Shouzi's phone was exactly what he had been paying close attention to recently: the Madras College of Higher Education had ordered TikTok to be removed from Apple and Google app stores!
Inside the meeting room, others who had also seen the news began to whisper among themselves.

"Dong dong!"

Chen Xiu quickly tapped the table twice and asked Zhou Shouzi, "What should we do?"

"I will appeal and have this unreasonable request rejected."

"TikTok's IPO plans?"

"It won't be affected!"

Zhou Shouzi's eyes were firm, and the confidence in his words even inspired the others in the conference room.

For the first time, he demonstrated the responsibility expected of TikTok's CEO.

Chen Xiu smiled, a hint of approval in her eyes, thinking that compared to the greater challenges to come, this incident was merely an appetizer...

TikTok's IPO prospectus meeting was forced to turn into a discussion of countermeasures due to the unethical actions of Baixiang.

After the discussion, Zhou Shouzi left with his group, while Chen Xiu, Zhang Yiming, and Su Xiao stayed behind to wait for another group to arrive and continue with Douyin's quarterly meeting summary.

This meeting, unsurprisingly, showed steady progress.

Douyin has long been the leader in the short video market. After its collaboration with WeChat's scan-to-red-envelope campaign during the Spring Festival, its user base has increased again. The lower-tier market that Kuaishou has been cultivating has also begun to flow to Douyin.

The GMV (Gross Merchandise Volume) of live-streaming e-commerce is increasing every week.

Content moderation issues have always existed, and there's no easy solution but to continue recruiting more moderators and improving the keyword reporting mechanism.

When the second meeting ended, Chen Xiu glanced at the time; it was already 13:20 PM.

"Sister Xiaoxiao, let's go have lunch together."

"okay."

"Count me in!"

Chen Xiu and Su Xiao looked back at Zhang Yiming in astonishment, both thinking: Don't you have any sense of propriety, you human third wheel?
(End of this chapter)