In July and August, most of Simon's energy was focused on the Westeros system's financial reports for the second quarter of 1991.
Because the size of the company doubled and it was still in the early stages of the merger, it was not until August 21 that the first quarterly financial report after the merger of Daenerys Entertainment and MCA was finally released.
In the three months from April to June 1991, the new Daenerys Entertainment Group's total quarterly revenue was US$1.93 billion. This revenue scale is second only to Time Warner, which has annual revenue of tens of billions. Group, ranking second among the seven major Hollywood companies.
However, compared with the huge profits in the same period last year, this time, due to employee layoffs, debt settlement, asset write-downs and other actions during the merger of the two companies, a large amount of money was consumed. Daenerys Entertainment’s net after-tax in the second quarter The profit scale was only a paltry $28 million.
Large-scale corporate mergers and acquisitions often mean huge losses that last for one or two years after completion. This has been the case for Time Warner in the past year or so.
Steve Ross is struggling to cope with the huge debt incurred by Time Warner due to its last acquisition.
Therefore, Simon is generally satisfied with the financial results.
After the successful IPO of America Online, Cisco's IPO began to accelerate.
As the Internet industry has taken off in the past year or so, Cisco's revenue has grown more rapidly.
In the second quarter that just passed, Cisco's revenue was US$298 million, a 26% increase compared to the first quarter. At this revenue growth rate, the company's full-year revenue in 1991 is expected to reach $1.2 billion.
With most of the revenue invested in corporate expansion, Cisco's quarterly net profit still reached $16.79 million.
Because the entire Westeros system almost monopolizes the core patents of the World Wide Web platform, Cisco's market share in the production of network equipment products such as routers and switches has reached more than 95%. Because of this obvious monopoly, management predicts that in the next few years, as long as Cisco can maintain its advantage in the Internet equipment market as much as possible, the company's net profit margin is expected to reach more than 20%.
Cisco is different from AOL, which is limited to the three major carriers on the east and west coasts of the United States. This company targets the entire North American and overseas Internet equipment market. Coupled with the monopoly on the basic patents of the World Wide Web, the capital market is even more looking forward to Cisco's IPO prospects.
Before AOL was officially listed on the Nasdaq exchange, Cisco had submitted a prospectus to the U.S. Securities and Exchange Commission (SEC).
The same issuance ratio of about 15% of new shares. Based on Cisco’s adjusted total share capital of 271 million shares before the IPO, the number of new shares issued this time is 40 million shares, rounded up.
In addition, with this IPO, Cisco's shares will also be adjusted to a dual-class share structure.
After the IPO, the 15,600 shares held by Westeros in Cisco were reduced from 57.5% to 50.1%. Class A shares, which hold 10 times the voting rights of outstanding shares, still guarantee an absolute majority of 56.7% of the voting rights of Westeros Corporation.
Naturally, other shareholders of the company also expressed opposition to Westeros' strong demand to maintain absolute control of Cisco.
Westeros' 57.5% stake in Cisco is not as high as the 75% it held before AOL's IPO. This incident almost triggered an IPO.
However, after Simon uncompromisingly expressed his tough attitude of either dual-class share structure or canceling the IPO, other unwilling shareholders stopped.
Different from the calculation method of 35 times expected price-earnings ratio used during the AOL IPO process because the company's net profit was negative, Cisco maintained relatively considerable net profits in the first two quarters of 1991, and it is expected that the net profit for the whole year of 1991 The scale will reach about US$65 million.
Morgan Stanley did not calculate the price-earnings ratio and conduct valuation based on Cisco's net profit margin of only 5% in the second quarter. Instead, it based its valuation on factors such as corporate revenue, cash flow, and market share, which was equivalent to that of AOL. valuation of US$3 billion.
Simon is not satisfied with this valuation.
In my memory, at the peak of the Internet bubble in 2000, Cisco's market value once exceeded US$600 billion, and AOL's peak did not reach US$200 billion.
That's a threefold difference.
Even now, although the revenue volume of the two companies is temporarily equivalent, the gap is obvious.
AOL only operates in a few states on the east and west coasts of the federation. Not only does Cisco almost monopolize the Internet equipment market in North America, it has no competitors even overseas.
Therefore, Simon insists that Cisco is valued higher than AOL, and very much higher.
After several haggling, the company's IPO valuation was confirmed at $5 billion, and the revised offering price range submitted to the SEC was between $17 and $19.
Although it has the success of AOL, because of Simon's insistence on high valuation strategy, Cisco had to activate the green shoe mechanism for this IPO in order to cope with possible fluctuations in the stock price after the listing.
However, this green shoe plan is not to issue new shares, but to provide 6 million shares as a reserve by other Cisco shareholders.
Cisco's shareholders have held shares for up to seven years since the company was founded in 1984.
For example, the famous Sequoia Capital. These companies have a relatively strong desire to cash out, and activating the green shoe mechanism can exactly meet their needs.
Westeros and other Cisco shareholders agreed that once the stock price rises after the listing, other shareholders will provide investors with an additional 6 million shares. If the stock price falls after the listing, Westeros will purchase approximately 6 million shares of its own capital to stabilize Cisco's stock price.
In fact, if necessary, Simon would not even mind buying out all of Cisco's outstanding shares to take the company private again.
However, Simon is confident that it is unlikely that Westeros will need to invest in the stock.
Through this period of operation, the final date of Cisco's IPO was confirmed to be September 6, which is also a Friday. The date is about 2 months later than the AOL IPO.
Two consecutive IPOs also made Simon realize that he had opened the Internet era in advance.
You must know that the World Wide Web standard in memory gradually took shape in 1993, and then in 1995, the Internet industry began to explode.
Now, Simon proposed a complete World Wide Web technology solution in 1990, and the Internet era arrived early.
The Internet has sprouted in the 1960s, and computers began to appear in the 1970s. After decades of accumulation, the Internet industry has a very fertile 'soil'. The World Wide Web is like a seed, planted three years in advance. Under the soil, which is already fertile enough, this seed quickly takes root, sprouts, and spreads with the wind.
What's more, there is Simon, a 'farmer' from the future who has decades of farming experience.
Graphical interface browsers, Igrit portals, AOL's early efforts, etc., all provide super nutrients like auxin for the growth and spread of this seed.
The Cisco IPO road show started on August 26, so Simon himself naturally did not need to follow up in person.
After the European trip in early July, Simon has basically stayed in Los Angeles for more than a month, working while accompanying Janet, who is five months pregnant.
After several pregnancy tests, the gender of the little guy has been confirmed and he is a boy.
This made Janet very happy.
Because the woman feels that she cannot imagine a girl named 'Melbourne', and has even made plans to steal the female assistant's alternative name of 'Seattle' once she becomes a girl. Everyone feels that 'Seattle' seems more suitable for a girl. name.
Of course, being able to give birth to the eldest son of the Westeros family was actually one of the reasons why Janet was happy.
After careful genetic testing, it was confirmed that the little guy was very healthy, and Simon's last worry was completely dissipated.
Some marriage relationships have lasted for thousands of years and still exist in most countries in modern society, so there is a natural rationale for its existence. Simon's worries come more from the influence of his previous life and education environment.
Daenerys Studios.
The time is already August 28th.
In the screening room of the Administrative District No. 1 office building, the internal preview of "Toy Story" ended at four o'clock in the afternoon.
This 3D animated film, which the Pixar team has been busy working on for more than two years, ultimately cost $35 million, which was $5 million more than the version in the original time and space.
Moreover, this does not include some investment in technology research and development and basic equipment.
In order to support the production of "Toy Story" and the development of CG technology for Daenerys' special effects, Simon specially built a rendering farm consisting of 1,000 top-level graphics workstations at Daenerys Studios.
In fact, there is no concept of "rendering farm" in this era. Many studios that produce computer animation-related businesses often just pile up a lot of workstations of different brands and configurations in a room for graphics rendering processing. Therefore, this is obviously also The world's first render farm, with an investment of US$20 million.
With the success of blockbuster films such as "Batman Begins", "Batman: The Dark Knight" and "Terminator 2" that use a lot of CG special effects, the rendering farm invested and built by Daenerys Entertainment has gradually attracted the attention of the industry.
However, not many people are willing to spend such a sum of money to build a rendering farm.
20 million US dollars is a huge amount of money that is completely out of reach for a small animation special effects company. The seven major Hollywood studios have the ability to invest this money, but they do not have Daenerys Entertainment who has invested several years. A series of professional software developed.
Fortunately, Daenerys Entertainment’s special effects studio and rendering farm do not refuse external orders.
This is of course also a strategy of Simon. In the short term, he does not want a second studio with top-level special effects technology to appear in Hollywood.
Disney, during its most powerful period in the original universe, was actually significantly ahead of its peers in terms of special effects technology due to its successive acquisitions of Pixar Studios and Lucasfilm, which owns Industrial Light and Magic. The most obvious comparison is between the Marvel Cinematic Universe and Differences between DC Cinematic Universe works.
"Avengers" can produce dozens of minutes of daytime special effects, and the superheroes smashing things along the way makes people excited.
"Justice League", or most of the DC superhero series, feels "black". Many special effects scenes take place at night, and some shots even give people a sense of déjà vu in a 50-cent online game. This is no accident. One of the big reasons is that night special effects require lower CG technology and are more economical.
Now, Daenerys Entertainment has been leading the industry in special effects for at least three years. Pixar's 3D animation software, Randerman rendering software, and Daenerys special effects Maya software are all things that the industry cannot catch up in the short term. And corresponding software patent barriers have been established in advance.
As Simon continues to invest in the research and development of film special effects technology, this advantage is destined to continue.
Although the new version of "Toy Story" was born four years in advance, due to Daenerys Entertainment's unwavering support and investment, the film is more mature in terms of technical details than the version that Simon remembered after five years of ups and downs before it was finally completed. Both the 3D graphics and character movements are smoother.
Although everyone who participated in the test screening was not sure whether such a 3D animated film would be recognized by the market, they all said that they tried their best to create a very interesting 90 minutes.
After the test screening was over and the film's promotion strategy was discussed, Simon stopped John Lasseter after the meeting and praised the other person's work without hesitation.
"One more thing, John, doesn't the production team of "The Lion King" hope to go to Africa to collect music?"
The two of them walked together on the corridor of the movie theater park.
John Lasseter nodded after hearing this and said: "Everyone hopes to see the scenery of the African savannah in person and then invest in the production of some scenes for this film."
"Coincidentally, Gaomen Pictures is preparing to produce a documentary about the African savannah. You can contact Ella tomorrow and select some people to follow."
The documentary about the African savannah was naturally inspired by the very successful Antarctic documentary "Snow World" released this summer.
With a production budget of 3 million U.S. dollars, it has been more than three months since its release. "Snow World" is about to be released. As of last week, the cumulative box office of this documentary in North America reached 51.69 million U.S. dollars. This box office performance exceeds that of the summer release. There are many large-scale productions with investments exceeding US$30 million.
Therefore, during this period, various Hollywood studios are looking for various documentary projects.
Now that she has tasted the sweetness, Daenerys Entertainment will certainly not just produce this documentary.
After "Snow World", the original team has begun preparations for an Antarctic penguin documentary project similar to "Diary of the Emperor Penguin" in Simon's memory.
In addition, Simon has approved a documentary about the African savannah. The production team will rush to Africa next month, just in time to bring Pixar's "The Lion King" team with them.
The two chatted for a few words and then parted ways in the parking lot.
Back at Dume Point Manor, Janet had already started preparing dinner.
After becoming pregnant, although the woman gave up her job at Cersei Capital, she still lived a fulfilling life every day.
Taking care of the Simon & Janet Westeros Foundation, preparing for the Westeros Medical Center, regularly attending pregnancy training classes, paying attention to the progress of the Westeros Tower project, etc., I am very busy, so I don’t care at all. Pregnant women who do not get any rest may develop tendencies such as loneliness, depression, and insecurity.
Simon was originally worried that his busy work and occasional need to leave Los Angeles would cause trouble to Janet. As time went by, he found that this worry was completely unnecessary.
After having dinner with the woman, Simon had to leave Los Angeles overnight.
This time I am going to New York, because Time Warner's long-prepared stock increase will officially take place tomorrow.
Steve Ross personally called Simon many times before, hoping that Simon would come forward. Terry Semel also invited Simon in person, so he could not shirk at all and had to rush to New York to support this additional issuance.