Vol 6 Chapter 584: Bargaining

If you talk to your own people, it’s not easy to be mad and cool. "After the two rooms are taken over, among the remaining four major investment banks on Wall Street, Merrill Lynch and Lehman, which are the less powerful, will suffer very much. pressure,"

Teacher Zhou immediately asked, "Do you think they can withstand such pressure?"

"It's difficult," Feng Yiping said, "Maybe, finding a bank to buy is their best ending,"

After all, these guys on Wall Street are so embarrassed now, except that they have developed so many derivatives that they don't even know themselves, the most deadly is still high leverage.

Like Lehman now, because of the write-down of various losses, they have used 10 billion US dollars in net assets to support 690 billion US dollars in assets.

By analogy, it can be regarded as a person with only 1 million who runs a factory, and then very wildly received a large order of 69 million.

Because he calculated carefully, using his 1 million as collateral, he can borrow a sum from the bank-if you have a high wrist, if you repeat the mortgage several times, you can borrow several.

Second, you can borrow from friends.

Finally, negotiate with each supplier a relatively long, for example, three-month billing period.

Stimulated by his large order of 69 million, many suppliers will finally agree to his request-which is equivalent to all the suppliers providing him with a fund that can be used for three months free of charge.

In the end, he put it together, yo, the available funds are very sufficient. While making the factory run smoothly, he can also buy himself a luxury car that is awe-inspiring at first sight-just like those private jets of Lehman Brothers.

Yes, Lehman Brothers has more than just a private jet. They have a total of 6 planes including a Boeing 767 large passenger plane, plus a helicopter for short trips, which can be called a fleet.

This kind of calculation is very good. If it goes smoothly, it is also feasible. It can complete the 69 million large order smoothly.

However, such a tight capital chain cannot tolerate any fluctuations. If an investor withdraws halfway through, for example, even if it is only a very inconspicuous 500,000, it may endanger the operation of the factory.

Of course, he can still imagine a way to deal with the luxury car for 500,000 yuan-this is to sell assets and reduce leverage to reduce leverage.

Then, there was a supplier that was disconnected from the capital chain due to a problem with its own operations. Don’t panic. You can also think about how to transfer part of the benefits that will eventually be acquired, that is, to transfer the factory Sell ​​part of the shares of the company and pull people into partnership-this is the sale of equity financing, increasing the denominator of leverage to reduce leverage.

But he was too unlucky. In the financial crisis, all suppliers had to gather funds to save themselves. Now, even if he sold himself, he couldn't complete the big order.

But he still has the opportunity, for example, to find a stronger company, you are not short of money, we have a well-functioning factory, and a large order with very good expected returns-this is the final resort, sugar daddy, ask for acquisition .

For Lehman and Merrill Lynch today, the first two methods are useless. Assets, cut, and who wants toxic assets?

As for equity financing, there are precedents in Bear Stearns and Liangfang. Who would dare to buy your equity?

Therefore, they have only one last way left to buy.

"Acquired," Teacher Zhou thought for a while, "Will it go smoothly?"

"If the U.S. government can guarantee their mortgage assets like Bear Stearns, it is still possible to reach a suitable transaction,"

"But now I think that the one that may not stand up first will be used by the U.S. government to sacrifice its flag."

Teacher Zhou said, "Then, it's Lehman."

Lehman’s well-known problems are bigger than Merrill Lynch’s. Just last year, just like Blackstone, they spent tens of billions of dollars on the acquisition of a large number of commercial real estate, including those acquired at a high price of US$22.2 billion. Aston Trust, the nation's second-largest high-end apartment developer.

How high is the leverage? They only paid out 250 million US dollars.

Including Axton and other real estate projects, prices have generally fallen before they have started much. Therefore, Lehman, whose core is commercial real estate and the rise of commercial real estate, has finally suffered.

"I also think it will be Lehman," Feng Yiping said.

"Considering the relationship between Lehman and Goldman Sachs..." Teacher Zhou suddenly laughed, "Haha, this is not surprising,"

Being able to say this to Feng Yiping shows that Teacher Zhou really didn't treat Feng Yiping as an outsider.

As for the meaning of Teacher Zhou's words, people in the industry, including Fuld, who must be in a panic at this time, also know.

"Yeah, I think, at exactly this time, Paulson also needs to show his attitude,"

"Haha," Teacher Zhou laughed again, "Yiping, when it comes to politics, I think that many corporate leaders in China do not have a deep understanding of you."

Feng Yiping understood why Mr. Zhou praised himself so much, "Well in the United States, it's not good not to pay attention to this."

"That's why you can always be so stable," Teacher Zhou said, "Do you have any specific suggestions about our investment...or else, I ask them to ask you directly?"

He didn't ask which one on Wall Street to invest in, because their exchanges just now actually excluded Lehman and Merrill Lynch, leaving only Goldman Sachs and Morgan Stanley.

Considering that if it were not for Feng Yiping's report, we almost invested in Motorola at the end of last year, so it is naturally more likely that we would be Motorola.

At this time, Morgan Stanley also needs more funds.

"No," Feng Yiping quickly refused.

Talking to Teacher Zhou about this is even a communication, but if Teacher Zhou asks other people to call, it is to ask yourself for advice.

Feng Yiping estimated that the caller would not be too happy.

"Everyone should know what to do at this time, and I don't have any suggestions. However, we must try to make the period of the transaction price reset clause as long as possible, at least one year."

Transaction price reset is a right generally required by wealth sovereign funds when investing.

For example, after they have invested in a company, if within a certain period of time, say within one year, the company sells its shares again, and the transaction price is lower than the price when they bought the shares-that is, the stock price has dropped significantly, then The right to adjust the original transaction according to the new price.

This undoubtedly avoided large losses after investment.

It turns out that those guys just forgot about this when we invested in Morgan Stanley. As a result, they lost money within a year.

"Also, considering the subsequent development, I suggest that the shares we hold should not be forced to convert to ordinary shares after maturity."

"What do you mean?" Teacher Zhou was silent for a while, "They might become commercial banks?"

Talking to someone who is knowledgeable is easy, "Yes, I don't think it can rule out this possibility,"

Now Goldman Sachs and Morgan Stanley, because they are investment banks, are not regulated by the Federal Reserve, but after they become commercial banks, they will be regulated by the Federal Reserve.

Holding 10% is the Fed’s regulatory red line. If it exceeds 10%, it will be very difficult to get the Fed’s approval.

In that case, if the shares converted to stocks exceed 10%, the best way is to sell more than 10%. Considering that the stock price may not rise at that time, it is equivalent to cutting meat.

Even if it is a part of the meat, but for the investment made with the mind of bargaining, any form of meat cutting will be frustrating.

"I will also repeat these two points that everyone knows," Feng Yiping said.

"Yiping, you are too humble, thank you for your reminder,"

At this time, Teacher Zhou was very convinced of the eyes of a student who had not had much contact with him when he was in school. They really did not expect the second point mentioned by Feng Yiping.

This vision is really far-sighted.

"Also, I don't know what you are deploying now~www.wuxiaspot.com~ But, if we can help, just say, you, now you are the most grateful person in the domestic financial system,"

That's because Feng Yiping's report has allowed many financial institutions to avoid huge losses.

No, not long after the phone call with Teacher Zhou, Malika just snuggled into Feng Yiping’s arms, and his phone rang again. The caller was from CIC, “Mr. Feng, thank you very much for your suggestions and thank you very much. The report last year allowed us to successfully avoid huge losses."

At the end of last year, they negotiated a 10% investment of US$5.6 billion with Morgan Stanley, equivalent to US$50 per share.

The current stock price of Morgan Stanley is less than half of US$50. When they think about it now, they are in a cold sweat.

"We sincerely welcome you to come to the company to guide your work at your convenience,"

This attitude is humble enough.

Because success has allowed us to avoid huge losses, Feng Yiping is equally in a good mood, "I wish you success in bargaining,"