Those Years When I Was Forced to Top the Forbes List

Chapter 242 Fire at the Tang Dynasty

Chen Datong's prestige at Spreadtrum was indeed very high. He only made Chen Xuebing wait for half an hour before he gave a reply: the shareholders' meeting would be held at the Shanghai company the day after tomorrow morning to discuss the matter.

It's worth noting that Spreadtrum has such a high valuation despite having a small number of employees, but its scale is quite large.

This is a company with an equity structure in the Cayman Islands, but its actual operating entity is in Shanghai. It has an R&D center in Beijing, an office in Shenzhen, and a wholly-owned subsidiary in Silicon Valley.

This structure can avoid restrictions on some imported equipment, and on the other hand, it has also attracted some overseas investors.

For example, Lu Xiaochun helped him find a San Francisco capital company called "Walden International".

The founder, Chen Liwu, is a notable figure. He is a Malaysian who has lived in the United States for a long time. In 2000, he invested US$5000 million in SMIC, in 04 he invested US$1500 million in AMEC, and in 05 he invested US$2000 million in GigaDevice.

He is a shareholder in those semiconductor companies that grew from the early days of China's semiconductor industry and later became billion-dollar companies in the stock market. Moreover, he invested very early and with very bold amounts.

In 05, we invested $800 million in Spreadtrum Communications.

Based on Chen Datong's description of a "valuation of US$1.5 million last year," Spreadtrum should have been invested in around that time, with a relatively small shareholding.

There may be other foreign shareholders.

Spreadtrum's shareholding structure is located overseas, and Chen Xuebing was unable to find the specific shareholding distribution.

However, Chen Datong was able to complete the communication in half an hour and directly convene a shareholders' meeting without needing a prior board resolution, which shows that the board members listened to him.

Chen Xuebing asked him curiously how many shares he owned.

Chen Datong said 10.68%.

He then asked Chairman Wu Ping.

It is also 10.68%.

Chen Xuebing instantly realized that he could no longer control the company.

If the two main figures only hold 21% of the shares, then the company must have at least 50 shareholders, or even more.

"If I want such a large share, can your founding team make that decision?"

Chen Datong smiled and said, "It is precisely because we actively introduced capital that our shares have been diluted to this extent, which has allowed us to expand so quickly. You have 34% now, but when we grow bigger, you may only have 20% or even 10% next year. Of course, we will take even less, but we still control the board of directors, not because of the shareholding percentage, but because all investors know that our team is the company's greatest resource. I believe you think so too."

“Yeah, only a fool would fire you.” Chen Xuebing nodded in agreement.

Chen Datong and Wu Ping both went abroad from Tsinghua University for further studies. The core team they brought back from the United States consisted of Tsinghua returnees and Silicon Valley natives, all of whom were high-end talents.

How large is your core team?

"120 people."

I'm referring to the core team.

"Yes, the R&D team has 120 people, and the core team also has 120 people, one-third of whom hold shares."

Chen Xuebing was speechless.

For its own company, Singularity Technology, the equity incentive plan only sets aside 15%, which is still too little.

This is what a tech company should be like.

"Hehe, you're only missing a general union to be as good as Huawei. But I said it's fine. If you want my help, I want management control. Chairman Wu Ping is not suitable to be both chairman and president. Give up the president position and I'll send someone over."

Chen Xuebing was confident that his 2 million + 2.5 million was the largest capital injection Spreadtrum had ever received, so he boldly set his terms.

Their "valuation of $1.5 million" doesn't mean they have much money in their accounts; it just means investors think highly of them, spending tens of millions to buy a small stake and inflate their value—a little trick before their pre-IPO.

Only with this large sum of money coming in can their valuation be truly confirmed.

“Sure.” Chen Datong readily agreed: “As long as the shareholders’ meeting agrees, you can try out the market. However, the timeframe can’t be too long. I can only give you a year and a half, which is before 2008, to fulfill your promise.”

"What if I successfully fulfill my promise?" Chen Xuebing asked with a playful smile.

Chen Datong said quite naturally, "Then the president position is still yours, or you can even be the chairman. I believe the investors will think the same way. Who can refuse a manager who can make the company a profit of 10 billion a year? We are all willing to work for you. However, in addition to us, there will be independent directors to supervise you."

Chen Xuebing gave him a thumbs up.

Companies that can reach 10 billion in revenue within a few years all have a unique management system.

Spreadtrum's management system is clearly learned from the United States. The US corporate finance system started early, and its long-standing development model has been to absorb capital and expand at will. The classic structure consists of a large number of shareholders with dispersed equity plus a management system. Therefore, the core management body, the board of directors, is full of independent directors to protect the rights and interests of shareholders.

These domestic companies are mostly run by dictators and family businesses, and independent directors are just figureheads.

For example, himself.

Spreadtrum learned the essence from the United States.

Taking charge of such a company might also be a way of broadening his horizons regarding his "dictatorial thinking".

Chen Xuebing had a hint of extra expectation.

"Alright, I'll go to Shanghai with you guys?"

"No, no, no." Chen Datong shook his head: "Don't show up yet. Let's go back and discuss something with the shareholders. There's something we need to take care of."

They need to buy back the shares from the two dissenting shareholders before they can announce this "good news".

"How long will it take?" Chen Xuebing frowned.

In its previous life, China Mobile's total investment in TD exceeded 2000 billion yuan, which is much higher than the current speculation of "800 billion" or "1000 billion" yuan, and the matters involved are very complicated.

Spreadtrum's equity stake is merely an entry ticket to participate in this matter.

"The meeting is the day after tomorrow. We're not a listed company, so we don't need to make announcements. It won't be long." Chen Datong, hands on his hips, asked, "Why are you in such a hurry?"

“Because there are many things to do.” Chen Xuebing thought of the democratic system on the other side and said in advance: “Most of the money I invested will be used for 3G. I hope you can reach a consensus in advance.”

Chen Datong frowned: "We can lower the chip price a bit, but you can't use it for subsidies that might harm the company's interests. We need to sign a contract for what you promised. If you can't do it, even if the annual profit is 9.9 million, we will definitely ask you for the remaining 2.5 million. This is the spirit of contract, there's no room for negotiation."

"Random subsidies?" Chen Xuebing chuckled.
"I am an investor, and a very high-return investor."

Chen Datong then smiled warmly: "It seems our returns will be no less than twice that of BOE?"

"Twice?" Chen Xuebing laughed again.

"Teacher Chen, I think we should get to know each other better."

Two days later, in Chen Xuebing's office. "wo"

"The wind is still blowing tonight, and thinking of your gentleness makes the days with you so easy."

The computer was playing the 20-to-10 competition from the Changsha region of this year's Super Girl contest, and Xu Fei was singing "Intimate Lover" while holding a guitar.

Xu Fei is quite popular. Her appearance continues the "manly" style of the previous champion, but her singing style is still too immature. She is far inferior to the original Anita Mui and not as charming as Joanna Wang's jazzy and lazy style.

The key issue is the video quality; it's incredibly blurry.

The video was choppy, and even the faces were made up of mosaics.

The best bootleg version ever.

The green-on-white "IQIYI" icon in the upper right corner of the video seems to be mocking him.
What are you doing?
To ruin me?
Where's my HD version?

Chen Xuebing took a screenshot and sent it to "Li & Fox".

[HanddrawingPie: The community environment is pretty good, but the technology is terrible. Add Mr. Lin from Qidian Network on QQ (307076) and ask him to set up upload restrictions. Don't upload compressed content anymore. Videos should be ranked by resolution. I'll also help you develop a dedicated attachment for community enthusiasts to upload videos, speed up the upload process, add the iQiyi watermark, and give the videos a comment function like a blog to allow uploaders to interact.]

"Drip."

[Lily & Fox: OK! Bro, I've been waiting forever! Your internet company is finally open!]

[Hand-drawn pie: Take your time. Once you've got the website basics set up, go to Zhongguancun. There's a venture capital firm called Shunwei Capital there that can help you connect with talent and funding.]

Chen Xuebing was quite relaxed about the iQiyi project. The video website wanted to charge, but the environment wasn't right yet, and syncing to mobile phones would take two or three generations. He had plenty of time for Hu Li to work on it.

On the contrary, Chen Xuebing was a little worried about Xu Yunfeng's game project "Land of Glory". He asked him on QQ yesterday how it was going.

Xu Yunfeng said he ran out of money after making a basic version and wanted to launch it first to make some money, raise funds, and then continue development. Chen Xuebing could only ask Ren Ying to go to the bank and invest the 70 yuan balance in his card into him, telling him not to rush and to help him find funding when he had time.

As a result, once Xu Yunfeng and Chen Xuebing's money arrived in his account, Xu Yunfeng doubled it back, investing 140 million yuan, and asked him if he wanted to join in.

That son of a bitch sold his fourth son's shop and now has nearly ten million in his hands.

Moreover, the six million he invested in Fund No. 1 has now grown to twenty million, demonstrating his considerable wealth.

Enraged, Chen Xuebing cursed, "Didn't you say a 4S store was your dream? What the hell is your dream now?"

Xu Yunfeng replied nonchalantly, "Didn't I say? I sold it. I have 30 million now, that dream is no longer worthy of me."

Chen Xuebing had no choice but to borrow another 200 million yuan from the group, doubling his investment, to keep up with Xu Yunfeng's dream.

Xu Yunfeng continued to invest 130 million, determined not to relinquish his 51% controlling stake.

Fengyao Network's paid-in registered capital instantly expanded to 640 million yuan. If this company really grows big in the future, Xu Yunfeng's forced investment will be a classic case.

[Lily & Fox: By the way, bro, my dad wants to invest in your fund (He asked me to be tactful when I tell you, but you can take it as me being tactful; actually, the old man is kicking himself)]

Chen Xuebing chuckled and was just about to tease her when someone knocked on the door.

"Chairman."

Hearing Lu Weibing's voice, he got up and opened the door.

As soon as Lu Weibing entered, he said excitedly, "Found it!"

Chen Xuebing's expression hardened.

Is it crucial?

"Crucial! Absolutely crucial!" Lu Weibing exclaimed gleefully, like an old bachelor who had just returned from the house of the prettiest widow in the village: "I knew it! How come MediaTek is collecting payments so easily! They've installed time locks in all the generic system solutions for those manufacturers who owe money and buy on credit, and they've also installed triggering mechanisms in the underlying firmware! As long as the authorization fee isn't paid within 90 days, they won't send an unlock signal, and those phones could crash at any time once they insert a SIM card and connect to the internet."

Chen Xuebing's eyes lit up.

"Where's the back door? Did you find it?"

Lu Weibing chuckled slyly, "I gave Lin Bin a prototype. He said it's hard to crack, but the trigger conditions can be modified! What should we do?"

Chen Xuebing immediately raised his hand: "Don't panic, it's not time yet."

He pondered for a moment with his hands behind his back, then said, "Have Lin Bin arrange a team to study this trigger signal. It would be best to thoroughly understand this backdoor before taking action. Zhanxun is not in a position to act right now. This kind of thing can only be used once. Keep it a secret and don't make a fuss."

"I understand!" Lu Weibing nodded, then said with a hint of reluctance, "Chairman, it's not that we can't do this integrated solution. Are we really going to leave such a large market to Spreadtrum?"

Chen Xuebing glanced at him: "Everyone has their own expertise. We have too much to do, don't worry. Zhanxun alone can't handle it. You'll have a chance to make a profit in this matter. I'll have Lin Bin come over later."

"it is good!"

No one knows what Chen Xuebing and Lin Bin conspired to.

But when Chen Xuebing set off for Shanghai, some things were revealed to the world.

Caijing published an article titled "TD-SCDMA Dilemma: Technology? Or Interest Groups Blocking the Way?"

On the same day, Digital Communications World also published an article titled "Eight Years of Research, Marketization Still a Long Way Off".

Both media outlets pointed to Datang Telecom, the company that facilitated TD technology, which submitted the TD third-generation mobile communication standard to the International Telecommunication Union in 98, directly accusing Datang of "delaying technology development in order to obtain subsidies."

Datang Telecom, formerly known as the Telecommunications Science and Technology Research Institute of the Ministry of Posts and Telecommunications, has a more prestigious background than Lenovo's predecessor, the Institute of Computing Technology of the Chinese Academy of Sciences.

Chen Xuebing would not have chosen to be an enemy if he had no other choice.

But this company firmly blocked his path.

The TD standard was discarded by the three major operators, and even China Netcom, which only picked up the scraps, didn't want it. But at the national level, it was a highly coveted prize, a crown prince. In fact, the issuance of third-generation communication licenses was delayed until 09, just to wait for it to develop and not lose to the communication standards of the European Union and the United States.

However, most of the TD patents are held by Datang Telecom. This company keeps delaying and delaying, relying on licensed TD patents and government subsidies to survive, losing tens of millions of yuan every year. To this day, it is still struggling with a "smart antenna" technology and has almost no output.

Spreadtrum has been cooperating with Datang since 03, with Datang providing intellectual property support. As one of the participants in the research and development, Spreadtrum is responsible for chip design and commercial sales. It has now produced two qualified products, but Datang's technical testing is still endless. At a forum this year, a Datang executive believed that "TD technology has great potential and advantages, but it is still a long way from commercialization."

Is it really that difficult to commercialize technology?

In Chen Xuebing's view, the three words "commercialization" and "fixed dominant player" are almost logically opposites.

True commercialization should be left entirely to the market; whoever is capable should take the lead.

Although Chen Xuebing knew he was a novice, he still wanted to try out the technological potential of this market.

(End of this chapter)