Chapter 670 Buying the Bottom of PepsiCo

Chapter 670 Buying at the bottom - PepsiCo

The inauguration of President Hoover is great news in the hearts of Americans. A large number of Americans have high hopes for President Hoover, believing that he can lead the United States out of the economic crisis and allow Americans to live a prosperous and wealthy life again.

No matter what Americans think, Arthur is happy to see President Hoover take office.

Let alone President Hoover's reputation and deeds in history, just because President Hoover still maintains the laissez-faire economic strategy of President Coolidge, Arthur has to give President Hoover a thumbs up.

The collapse of the US stock market has not been a day or two. Logically, the government should control or rescue the stock market.

But the damn laissez-faire economic strategy has prevented the US government from providing much relief and control to the stock market, and all kinds of chaotic phenomena are happening in the stock market.

Needless to say, the bankruptcy of small and medium-sized enterprises is accompanied by a large number of large companies with capital frantically buying at the bottom, taking the opportunity to establish an absolute monopoly in their own industry.

Many industry giants were born during this period in history, and they were all the result of big capital frantically swallowing up small capital.

Since President Hoover still maintained a laissez-faire economic policy, Arthur would not be polite and immediately launched a big bottom-fishing operation.

The previous bottom-fishing was afraid of attracting the attention of Americans, but now Americans are not paying attention to the stock market, and it is a good time to bottom-fish.

However, in order not to attract attention, the bottom-fishing in Australasia will be dispersed into various forces and acquired in various ways.

February 23, 1927, Virginia, the United States.

Getting off the car, looking at the huge Pepsi-Cola logo in front of him, Frank nodded with satisfaction and walked into the company.

This is already his second goal in the short term. Even if these companies affected by the economic crisis have not gone bankrupt, their stock prices have been reduced by more than half.

Speaking of the famous Pepsi-Cola, the journey he created and developed was much more difficult than the earlier Coca-Cola.

The name of Pepsi in Pepsi-Cola comes from dyspepsia, which translates to indigestion. In short, Pepsi-Cola’s main feature is that it contains pepsin, which can promote digestion.

The name of Coke is simply to take advantage of the popularity of Coca-Cola, which also made it take five years for Pepsi to register its trademark, and it was once considered a counterfeit product of Coca-Cola.

The development of Pepsi, which successfully registered its trademark, would not be smooth, because Coca-Cola has already occupied a considerable part of the market, and there are dozens of cola companies competing with Pepsi, so it is very difficult to stand out.

Pepsi was listed in 1919, but such a small-scale and low-profile beverage company only lasted for four years before declaring bankruptcy in 1923.

Subsequently, Pepsi Beverage Company was acquired by a company from Virginia and barely maintained until now.

The current situation of Pepsi Beverage Company is not too good. Due to the impact of the economic crisis, Pepsi is about to face a second bankruptcy.

The Virginia company that acquired Pepsi itself has little capital, and the parent company is at risk of bankruptcy, not to mention a small beverage company under the parent company.

Pepsi is now like an abandoned adopted child. If no one can take over, it can only wait to be re-acquired after bankruptcy.

The parent company's economic crisis, Pepsi's serious unsalable, the rising cost of cola production (imported sugar prices), coupled with the suppression from Coca-Cola and other cola companies, the bankruptcy of Pepsi Beverage Company has become inevitable, and it has basically been abandoned by Virginia Company.

This is also the information Frank has learned. For intelligence personnel who are on a mission, before acquiring each company, it is also what they should do to understand the company's weaknesses in order to better lower the price.

Entering Pepsi, Frank skillfully ignored the crowded job seekers and expressed his needs to the company's guard.

The guard obviously saw Frank getting off the car and dressed luxuriously. He was not an ordinary person, so he was happy to report to his boss.

Not long after, Pepsi's helmsman Pradoham came over in person. Looking at Frank, who was dressed luxuriously, he quickly stretched out his hand and asked with a smile: "Sir, who are you?"

"Introduce yourself, Frank." Frank smiled slightly and said his name.

Pradoham nodded secretly in his heart. Although the other party's name was not well-known, he was very excited about the other party's intention to acquire Pepsi-Cola.

Of course, this did not mean that Pradoham wanted to give up the business he had worked hard to create. But the problem was that relying on this Virginia company, Pepsi-Cola Beverage Company had no future at all.

Instead of waiting for Pepsi-Cola to die on its own, it would be better to try to find a better destination for his hard work and let Pepsi-Cola's name resound throughout the United States.

"Mr. Frank, please go to the conference room to discuss in detail. To be honest, I fully agree to sell Pepsi-Cola, and I believe that Bragi (the previous acquirer of Pepsi-Cola) will agree." Pradoham smiled and gestured, and took Frank to the Pepsi-Cola conference room.

In the conference room, Pradoham changed his smile just now and said with a sad face: "Mr. Frank, I wonder how you want to acquire Pepsi-Cola Beverage Company?"

Looking at Prudham in front of him, how could Frank not think of his intention. But anyway, Australasia didn't think of controlling the company personally, and Arthur didn't think Australasia's economic experts could do better than Pepsi-Cola itself.

"Of course it's a full acquisition, Mr. Prudham. However, because we have too many companies, we can retain the senior executives of Pepsi-Cola Beverage Company, including you, and let you have sufficient management rights under supervision." Frank said with a smile.

Prudham nodded slightly, not rejecting Frank's statement.

When it was acquired in 1923, Prudham only retained 10% of the shares, and the remaining 90% of the shares were sold to Bragi.

It is worth mentioning that Pepsi-Cola's issue price was as high as $40 per share, which also means that Pepsi-Cola was actually a company worth hundreds of thousands of dollars at the beginning.

But when it went bankrupt in 1923, the price of Pepsi-Cola per share dropped to about $25, which also caused Pepsi-Cola's market value to plummet to less than $300,000.

Although this seems a lot, it also takes a lot of money to keep the company running normally. Coupled with the rising cost of cola production and the decline in Pepsi sales, the company went bankrupt and had to be acquired by Bragi.

In fact, after the acquisition, Pepsi also ushered in a period of glory. Because of the new capital injection, Pepsi still seized a part of the market in Virginia and became the most famous beverage company in Virginia, which also made Pepsi's stock price continue to rise, reaching $120 per share at its peak.

But the economic crisis is not something that small and medium-sized companies can withstand. Especially companies like Pepsi rely heavily on cola sales to make profits and return on investment.

The economic crisis has directly caused tens of millions of Americans to lose their jobs, and the sales of cola have naturally been reduced again and again, causing Pepsi's stock price to plummet from millions of dollars to hundreds of thousands of dollars again, and it is still falling.

What's worse is that Bragi's company is also facing an economic crisis. Not only can Pepsi not wait for any financial support, but it is even forced to mobilize part of the funds to Bragi's company.

Under such a blow, if nothing unexpected happens, Pepsi will go bankrupt in a short time.

This also made Pepsi shareholders including Pradoham and Bragi think of selling their shares.

The difference is that Pradoham, as the founder of Pepsi, naturally wanted Pepsi to develop in a better direction.

Bragi himself is an investor, and he only wants to sell his shares to get funds and ensure that his original company will not go bankrupt.

Pradoham is very happy to see Frank's suggestion that he should have management rights.

Although he has no shares, it is enough for Pradoham to stay in the company he founded.

Pepsi has a history of nearly 30 years, and only Pradoham knows the hard work he has put in these 30 years.

The bankruptcy of Pepsi is like a bleeding heart for Pradoham. If Pepsi can find a stronger destination for capital, Pradoham will definitely be happy.

"Then I have no problem, Mr. Frank." Pradoham said very seriously: "I will help you persuade Mr. Bragi, when can the equity acquisition start?"

Looking at Pradoham who was more anxious than himself, Frank was a little surprised, but it was a good thing for him after all: "If possible, today is no problem."

As a senior intelligence officer, Frank's activity funds for acquiring American companies are as high as millions of dollars.

If the task can be successfully completed and there are unexpected gains, these activity funds can still increase, which also makes Frank basically have no worries about funds.

Pepsi-Cola's stock price was worth millions of dollars at its highest period, and it is good to have a market value of more than 200,000 US dollars now.

After all, this is a company that is about to go bankrupt. To take over this company, you must also consider the debt problems that the company continues to face.

If the problems of production costs and market size cannot be solved, the value of Pepsi-Cola will not rise.

Especially in the economic crisis, such a beverage company on the verge of bankruptcy is too common, and it is impossible to sell it at a high price.

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