Chapter 195 Google Stock

In fact, there is another company in Silicon Valley that Barron is very interested in, and that is Google.

But it is a pity that since Sequoia Capital and Kleiner Perkins Caufield \u0026 Byers, two of the most well-known venture capital firms in the United States, jointly invested a record $25 million in Google in 1999, the company did not raise funds again until it went public.

It is worth mentioning that after participating in Google’s financing, KPCB’s Doerr complained:

“I’ve never invested so much money into a start-up and received so little equity.”

However, the performance of Google after it went public made all his previous dissatisfaction disappear.

Barron also asked Google through Sequoia Capital whether there is still a possibility of financing, and he also hopes to participate...

However, Morris still said that this possibility is not high, because Sequoia Capital is also very concerned about this, but judging from the news received from the two founders of Google, when Google conducts its next financing, it is estimated that The IPO is on the market.

And this time is likely to be next year.

Therefore, in theory, if Barron wants to invest in Google, he can only participate in subscribing for their publicly issued shares at that time...

Even so, Barron did not give up, and he set his sights on investors who owned shares of Google at this time.

Of course, Sequoia Capital and KPCB are no longer possible, but there are still other early investors who own shares in Google.

For example, Andy, the teacher of two Google investors who first invested $100,000 in Google, is also the co-founder of Sun Microsystems.

There's also Amazon founder Jeff Bezos, who was also an early investor in Google.

However, these people all refused to sell their shares in Google at this time, even if the price given by Barron's seemed very attractive at this time.

You must know that last year, Yahoo, which was still at its peak, wanted to acquire Google. They offered $3 billion, and Google counter-offered $5 billion. Then, Yahoo gave up on the acquisition...

At this time, Barron's valuation of the company for acquiring Google's shares was US$6 billion, which was twice what Yahoo offered last year.

But at Yahoo, DS Capital has gained something.

Since 2000, Yahoo has cooperated with Google, with Google providing search services to Yahoo.

In the process, Yahoo invested $10 million in Google and held approximately 5% of its shares.

After the failure to acquire Google last year, Yahoo's competition with Google became more and more obvious. Therefore, when DS Capital proposed to acquire their shares in Google, Yahoo showed interest.

Barron was not surprised that Yahoo would respond to his offer to acquire its shares in Google. After all, Yahoo has done a lot of tricks in this regard.

The 5 billion acquisition of Google was abandoned by him. Later, the 1 billion US dollar acquisition of Facebook was reduced to 850 million US dollars before the contract was signed. As a result, Xiao Zha angrily refused. This kind of thing will not be mentioned.

Even the shares they currently hold in Google were mostly sold out before its IPO...

Well, the most outrageous thing is that during Google's IPO, they sold their Google shares at a price of $82 per share, which was lower than the issue price of Google's shares of $85...

Since this is the case, now that Barron has bought their Google shares in advance, there will be no psychological burden.

However, for the approximately 5% of Google shares held by Yahoo, DS Capital's bid was US$300 million. Yahoo thought the price was slightly lower, so it counter-offered US$350 million...

Then DS Capital agreed.

Of course, the team sent to negotiate with the other party performed a back and forth request for instructions, made a gesture of "making friends", and finally reluctantly agreed.

As a result, the two parties reached an agreement. DS Capital purchased 12.6 million Google shares held by Google for US$350 million, accounting for approximately 5% of its current total share capital.

In addition to Yahoo, DS Capital has also reached an agreement with AOL.

When Google cooperated with America Online (AOL) last year, it had an agreement with them, that is, they granted AOL the right to purchase its shares at a price of $3 per share. AOL could purchase up to 7.4 million shares of Google stock.

In the original time and space, when Google was listed, Time Warner Group, where AOL was located, exercised this authorization. At that time, the issuance price of Google's stock was US$85, which means that this agreement obtained at least US$600 million in additional income for AOL.

But this will not happen now, because after the merger of Time Warner and AOL, their operating conditions were not ideal. Therefore, AOL was very happy after DS Capital proposed to buy out their agreement for US$185 million. So he agreed.

After all, AOL's revenue from cooperation with Google last year was only US$35 million.

DS Capital's bid is equivalent to the fact that they can only make profits after Google's stock price exceeds 28 US dollars per share. This price corresponds to Google's market value of more than 7 billion US dollars.

In AOL's view, Google's future market value may exceed US$7 billion, but how long will it take? Compared with continuing to wait for this, getting this money now and turning it into a substantial profit for the company, the future is too vague.

After all, CEOs of such listed companies have a term of office. The most important thing is to achieve more profits for the company within this term and obtain more bonuses and shares.

The equity transfer agreement signed between DS Capital and AOL stipulates that AOL's interest in purchasing Google stock will be owned by DS Capital.

In this way, DS Capital will need to spend US$535 million to purchase just the two Google stocks of Yahoo and AOL. Counting the US$3 per share purchase fee required to exercise the options owned by AOL, the total amount will reach $557 million.

In this way, after DS Capital executes AOL's agreement to purchase Google shares, they will hold approximately 20 million shares of Google, accounting for 7.7% of Google's total share capital at that time!

Of course, Barron's first problem now is the need to solve the funding problem.

By late August, NetArt's stock price continued to rise, thanks to the substantial growth in revenue from its SMS and gaming businesses, reaching a high of $50.

Barron knew NetArt's share price would next reach a record price of $55.85, and subsequently exceed $70 - which, of course, would not last long.

However, in addition to the NetEase shares obtained through the last additional issuance, DS Capital also held 4.3 million NetEase shares earlier, accounting for about 14% of their total share capital, so it is impossible to sell them all when its stock price is the highest.

By this time, Daisy had already begun to sell NetArt shares in the secondary market.

It is worth mentioning that when Barron’s DS Capital initially purchased NetEase shares, Duan Yongping, the founder of BBK, had already started to buy NetEase shares.

At that time, he bought about US$2 million in NetEase shares at a low price of less than US$1 per share. However, he did not keep these stocks now. He sold them out one after another after NetEase's stock price exceeded US$30...