Chapter 326 The Secret to Becoming a Super Rich Person
Tonight, there are so many Wall Street financial industry tycoons attending this private dinner, and the happiest person is undoubtedly the old Suntou of SoftBank Group.
As Yahoo's largest shareholder holding 7.8 million shares, SoftBank's market value has reached US$590 million based on today's closing price of Yahoo's stock in US dollars.
In just a few months, the book profit was US$490 million! Let Lao Suntou be overjoyed.
Tonight, Lao Sun felt as if he was so proud of the spring breeze that he saw all the flowers in Chang'an in one day. His face was red and he was full of ambition. The success of Yahoo's bet made him even more ambitious.
Li Xiaofan brought the beautiful Tang Xinyi, and when the two of them raised cocktails to greet him, Lao Suntou said happily with a smile on his face: "Li, I have to thank you! In the end, it was you who made me decide to invest 100 million US dollars in Yahoo, and obtained Huge reward today!”
Li Xiaofan said humbly: "Dr. Sun, you are so polite. You are a senior in the investment world. I will learn more from your master in the future! I hope you will have the opportunity to teach me more and take me to see the world..."
"Haha, I don't dare to be a master! Li, if there are good projects in the future, if we have the opportunity, we can share resources and work together again!"
After a courtesy chat with Sequoia Capital Chairman Don Valentine and Morgan Stanley CEO John Mack, Sun Zhengyi focused on Citibank, Wells Fargo, and the United States who were invited to attend the dinner tonight. Bank and Morgan Bank.
Li Xiaofan noticed that when Lao Suntou communicated with these bank executives, his purpose was very clear, which was just two words: financing!
Tang Juntan used three words to praise Sun Zhengyi: vision, boldness, and broadmindedness.
Li Xiaofan thinks a few more words need to be added: wolf nature, adventurer!
Before Li Xiaofan was reborn, the media published an article about Masayoshi Son and SoftBank. The title was shocking and sensational: Masayoshi Son, who is heavily in debt, owes a total of 1.1 trillion, and only needs 200 million in interest every day.
The article said that Masayoshi Son had a unique vision for investment, but investment must require the support of huge wealth. Although Masayoshi Son had a certain amount of funds in his hands at the time, it was only a drop in the bucket if he wanted to complete his grand ambitions. In order to realize his ideal, he began to seek loans from banks. In 2000, according to statistics, there were more than 600 companies investing and cooperating with him!
Lao Suntou reinvests the money he earns. This allowed his business to grow in size and cover more and more fields. Major banks also regarded him as a super VIP customer.
When Sun Zhengyi first borrowed money from banks, he needed to mortgage his assets to the banks for financing. Later, when his career became bigger and his reputation became more prominent, he often used the reputation of SoftBank Group and other investment companies as collateral. In this way, he invested in various new industries, which made him famous in the business circle. The reputation inside is getting higher and higher. Banks are also willing to lend him money...
Li Xiaofan thought that the article was a bit sensational. Although SoftBank's debt amount at that time had reached 1.1 trillion yuan, based on bank interest rates, Son Zhengyi had to pay 200 million yuan in interest every day. But Son Zhengyi did not go bankrupt because of this. On the contrary, he continued to invest, and his business grew bigger and bigger.
This is mainly because SoftBank has invested in many Internet and high-tech unicorn projects before. After several years of development, these companies have become well-known industry giants in the world. The equity he owns has far exceeded his total debt. If he really wants to pay off his debt, selling some stocks will be enough to pay off the debt.
The growth rate of Masayoshi Son and SoftBank's assets is much higher than the growth of their liabilities!
So as long as these well-known corporate giants invested by SoftBank are still operating normally, Masayoshi Son and SoftBank will never go bankrupt, and his total assets will only continue to rise...
Li Xiaofan summarized Sun Zhengyi’s current philosophy, which is to try every means to borrow money and raise funds, and then spend huge sums of money to invest in or acquire Internet, media publishing and other projects that he is optimistic about, desperately expanding his business territory!
In his previous life, Son had unparalleled ability to borrow money. In 2017, Sun Zhengyi’s investment in the United States was damaged. Coupled with the poor global capital environment at that time, Sun Zhengyi encountered financial difficulties. But Sun Zhengyi found another way and went to the Middle East, convincing a group of oil tycoons such as the United Arab Emirates to invest tens of billions of dollars for him to become a fund partner. At that time, Sun Zhengyi captured an anxious psychology of an oil tycoon, that is, whether they can continue to be rich if there is no oil in the future. So Masayoshi Son persuaded them to jointly invest US$100 billion to establish a Vision Fund.
After Li Xiaofan was reborn, he has been studying the successful entrepreneurs in his previous life.
He believes that the most enviable thing about these successful businessmen is not their huge wealth, but their business model.
After getting in touch during this period, Li Xiaofan discovered that Sun Zhengyi currently has two main methods of financing:
The first is to use equity pledge to obtain bank loan financing. Therefore, he must continue to expand the assets of companies like Yahoo that he invests in, try to go public as quickly as possible, double the assets, and increase leverage.
The second is to set up an investment fund and attract wealthy people to join him and become his partners.
Li Xiaofan feels that he can completely copy what Son Masayoshi SoftBank does now.
"Mr. Sun, the equity pledge rate of Yahoo you asked about, our bank may only be able to achieve about 50% at present. How about I let the head of the credit management department contact you tomorrow?" Tom, the vice president of Wells Fargo, answered the equity pledge rate question raised by Masayoshi Son.
Wells Fargo Bank is an outstanding company. Their earnings from 1983 to 1998 were times that of the stock index of the same period, 1.5 times that of Intel, 3 times that of General Electric, and 4.5 times that of Coca-Cola. Because the entire financial industry was far less prosperous than high-tech stocks, automobiles and electrical appliances during this period, the outstanding performance of Wells Fargo Bank surprised the world.
The equity pledge rate is the ratio of the financing amount to the market value of the pledged stocks. The lower the pledge rate, the safer it is for the bank. The pledge rate of equity pledge loans is agreed upon by the bank and the borrower based on the quality of the pledged stocks and the borrower's financial and credit status.
Masayoshi Son was very dissatisfied with the answer of Tom, the vice president of Wells Fargo:
"Tom, the 50% pledge rate you mentioned is too low. Yahoo is a great Internet company. We estimate that Yahoo's profitability will be very good in the second half of this year, and the third quarter report will be very good. By then, Yahoo's price is likely to exceed $200, and Yahoo's market value will be at least $5 billion. At that time, the market value of Yahoo's shares held by Softbank will exceed $1.5 billion! So, now you Wells Fargo should look further ahead. For excellent companies like Yahoo, the equity pledge rate should be increased to 70%!"
Masayoshi Son was eager to pledge Yahoo's equity to the bank for financing in order to complete the acquisition of the publishing department of the Ziv-Davis Group for $1.8 billion, and there are plans under negotiation to acquire memory manufacturer Kingston Technology for $1.45 billion and several other high-quality projects that he has already favored...
Li Xiaofan was also very concerned about these questions asked by Masayoshi Son.
After some inquiries, the current 1996 US loan base rate is %, while Singapore is only %, so Li Xiaofan thinks it is more cost-effective to go back to Singapore to find a local bank for a loan.
As for the 50% equity pledge rate, Li Xiaofan feels that it is enough for him.
The current market value of Yahoo that he owns is more than 220 million US dollars. If he uses the 50% equity pledge rate, he can raise more than 100 million US dollars from the bank, but he may not need that much at once.