Chapter 1494 [If merged, they can complement each other perfectly]

At about 9:47 am on Monday, December 2, a media report said that according to reliable information, the reporter learned from a senior executive of Toutiao that the company also expressed a strong interest in Tik-Tok, and recently contacted its parent company Qunxing Group to propose participating in the competition to acquire Tik-Tok.

The reporter learned from the senior executive that the parent company Qunxing Group was also interested in this and quite supported the proposal, and was discussing the possibility of acquiring Tik-Tok.

As soon as this news came out, the outside world was shocked.

Qunxing Group actually also took a fancy to Tik-Tok. I didn't expect that the corporate giants in the East and the West were so coveted for Tik-Tok, which attracted all kinds of giants to compete for it. It can be said to be a super sweet cake.

What is certain is that although Toutiao has developed rapidly and has become a major Internet giant, with its current strength, it is still impossible for Toutiao to swallow Tik-Tok on its own. The valuations of the two are comparable.

But if the parent company Qunxing Group intervenes, it will be completely different.

Qunxing is so huge now that it can be said that even a giant like Microsoft can be fully acquired, and it is a cash acquisition because Qunxing really has that strong financial strength.

Shortly after the news was exposed, the stock price of Toutiao immediately rose abnormally. The company first went public through a backdoor listing during the bull market in 2015, and then moved to this venue after the establishment of the SGX market.

When Toutiao first went public through a backdoor listing, its issuance market value was only 4 billion yuan, 3.2 yuan per share, and the total share capital was 1.25 billion shares. It was split this year, with a ratio of 1 to 10, and the total share capital expanded to 12.5 billion shares.

As of last Friday's closing price, Toutiao closed at 54.07 yuan per share after the market, corresponding to a market value of 675.875 billion yuan. The cumulative increase since its listing has reached +16796.87%, a terrifying increase of nearly 168 times.

At this moment, the intraday trend of this stock fluctuated upward all the way, and the bulls took the upper hand and began to push the stock price up continuously, and the capital game on the market became very fierce.

Before the news was exposed, the trend of this stock was actually quite normal, with an increase of less than 0.5 percentage points.

As the news spread, the trend of this stock began to change, and the attention it received also soared rapidly. It was previously outside the top 50 of the popular stock rankings, but now it has rushed into the top ten list.

At around 10:02, major market software pushed the news:

[Toutiao rose by more than 4 percentage points, reaching the 700 billion market value mark for the first time, setting a historical high, and the current transaction volume is 11.7 billion]

When the small windows of major market software pushed the quick news, Toutiao's stock price intraday time-sharing line continued to rise, and at this moment it has risen by more than 5 percentage points, and the transaction volume is also continuing to expand.

Most investors believe that this is major good news. If Toutiao can successfully acquire Tik-Tok and merge with it, it must be a strong combination and a perfect complementary situation.

Moreover, the two companies themselves have a great origin, because both are companies founded by the same founder, Mr. Zhang, but Toutiao was sold to Qunxing Group by Mr. Zhang that year. It was also because of the sale of Toutiao that Mr. Zhang went overseas to establish Tik-Tok, which became the most successful entrepreneurial project in his career.

For many companies, as long as the founding team leaves, it is often the beginning of decline.

But Toutiao is an exception. After its founding team left, it did not decline, but its development momentum was rapid. Its Douyin has now surpassed Kuaishou to become the leader in the domestic short video track.

According to Toutiao's third-quarter financial report data this year, the company's revenue reached 30.7 billion yuan and its net profit was 5.2 billion yuan. The total revenue in the first three quarters reached 73.356 billion yuan, and the total net profit in the three quarters reached 12.5 billion yuan.

During the third-quarter earnings conference call, the company's head said that in 2019, the company's revenue is expected to exceed 100 billion yuan, and the net profit is expected to reach 17 billion yuan.

Such a performance level is more than enough to support the current market value of 700 billion yuan.

You know, when the company went public through a backdoor listing in 2015, its market value soared from 4 billion to 100 billion. Investors at the time thought it was completely crazy. They all thought that after the crazy bull market, there would definitely be a mess, and it would depend on who would take the last baton.

As a result, today, its market value has soared to 700 billion. The valuation bubble at that time was incredibly large, and the price-earnings ratio soared to more than 300 times.

But the bubble did not burst, but was filled by value growth. At present, Toutiao's price-earnings ratio is about 41 times.

Today, the news that Toutiao wants to acquire Tik-Tok came out. Investors are looking forward to this matter. Not only can the two companies complement each other perfectly, but it even makes people feel an inexplicable sense of fate.

After all, they are all companies founded by Mr. Zhang. Toutiao has been incorporated into the Qunxing Group. If Tik-Tok is also included in the Qunxing Group again, it will really be a sense of fate.

However, this is secondary. The main reason why market participants are looking forward to it is that the two companies are too complementary.

Currently, Tik-Tok has lost the support of the three major record companies and is facing a copyright dilemma.

From the initial failure to obtain the copyrights of the three major record companies, to the dispute with ICE in the copyright court, and now the NMPA is involved again, Tik-Tok's copyright road can be said to be difficult.

Although Tik-Tok acquired the British artificial intelligence startup jukedeck, it can use AI to solve the problem of providing users with more convenient music accompaniment, but as long as users are allowed to upload music by themselves, there will always be copyright issues.

The current situation is that Tik-Tok's external copyright issues are difficult to solve, and the road to self-help for copyright is still unclear.

And if Tik-Tok, a huge pain point, can be merged with Toutiao and integrated with Douyin under the company, the copyright issue will no longer be a pain point.

Because Fang Hong had already spent a huge amount of money to collect a large number of domestic and foreign copyrights at a very early time, whether it was film and television copyrights, music copyrights or TV drama copyrights, etc., they were all bought in a packaged manner.

At that time, the outside world thought Fang Hong was crazy and a stupid son of a landlord.

Looking back today, I understand how wise it was for Fang Hong to spend a huge amount of money to acquire copyrights. The price seemed very expensive at that time, but now it is extremely cheap.

In addition, there is also a giant called Yixing Media Group under Qunxing Group, which is also producing a large amount of the latest original content.

Just this year, Yixing Media cooperated with the Douyin department under Toutiao to launch the "Music Gang Plan" in China. The 62 songs launched online are all from the independent musician support plan, and the copyright is shared by both.

In recent years, both Douyin and Yixing Media have supported and incubated musicians in large quantities to obtain copyright support.

In short, if Tik Tok can merge with Toutiao, it will have many benefits and can solve many of its own troubles. The difficulties currently faced by Tik-Tok are more than just copyright issues.

Similarly, Toutiao can also gain huge benefits from the merger with Tik-Tok. First of all, there is no need to worry about the overseas market. Once the merger is completed, it will completely secure the world's number one position in the short video field, and no one can compete with it.

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