After the IPO application was officially submitted, Daenerys Entertainment Group's prospectus was immediately announced on many platforms such as Ygrit Portal, SEC official website, and Daenerys Entertainment official website.
The first version of the prospectus details Daenerys Entertainment Group's business structure, revenue data, equity structure, development prospects and other relevant information that must be disclosed for the company's IPO. It also includes the exchange selection and underwriter list for this IPO. , the scale of funds raised, the stock issuance price range and other specific information that investors are most concerned about.
The business structure and revenue data of Daenerys Entertainment are no secret to anyone who cares. In this version of the prospectus, what most potential investors are most concerned about is the ownership structure and development prospects of Daenerys Entertainment.
After employee internal subscriptions and high-level stock award redemptions in March, the total share capital of Daenerys Entertainment Group after accounting is approximately 2.113 billion shares, of which Simon himself holds 91.7% of the shares and 1.937 billion shares.
There have been many speculations about Daenerys Entertainment's internal subscription and reward redemption plans. Most people did not expect that Simon would transfer or reward up to 8.3% of Daenerys Entertainment's shares to group employees in such a generous way. .
According to the issuance price range of US$18 to US$20 given in the prospectus, even if the lowest value is US$18, the total value of the 176 million shares transferred to employees by Simon will exceed US$3 billion.
Daenerys Entertainment Group plans to issue 250 million new shares this time. Also based on the minimum value of US$18, the total amount of funds expected to be raised is only US$4.5 billion.
According to previous reports from some media, except for high-level stock awards, the stocks subscribed by internal employees are sold at a very low discount, and the average subscription price may be less than 50% of the actual value of the stock. It can be said that Simon Westeros directly gave away a huge amount of more than 1.5 billion US dollars in cash to the employees of Daenerys Entertainment Group.
1.5 billion US dollars. According to the prospectus, Daenerys Entertainment currently has a total of 29,000 employees. On average, each person has received an award of US$51,000. This has exceeded the annual salary of most working-class people in the United States. .
In 1993, the per capita annual income in the United States was only $31,000.
The actual distribution of rewards and subscriptions is of course unlikely to be even.
According to the figures disclosed in the prospectus, in addition to Simon Westeros’ high absolute holding of 91.7%, Daenerys Entertainment CEO Amy Pascal, who holds the next highest shareholding ratio, received 35 million shares. The shareholding ratio is 1.65%.
Also based on the lowest issuance price of $18, the total value of the shares held by Pascal reached $630 million.
This is obviously still a very conservative estimate.
After the official listing, it is not impossible that the total value of these stocks exceeds 1 billion US dollars.
Not only that, according to Amy Pascal’s salary contract that has been exposed by some media, the female head of Daenerys Entertainment has received hundreds of millions of dollars in salary since joining the company, with investments like Simon Westeros The wizard pointed out that even if Pascal invested half of his salary, including the share award he just received, his personal net worth would probably have exceeded the US$1 billion mark, making him another billionaire in the United States.
After Amy Pascal, the third largest shareholder of Daenerys Entertainment shares is still a female executive.
Nancy Brill holds a total of 7 million shares.
This small female executive, who is mainly responsible for Daenerys Entertainment's peripheral products, video games, video chain and other businesses, has made achievements in recent years that are obvious to all. However, in this society where men are still respected, Nancy Bu Lille's ability to obtain the share of shares second only to Amy Pascal still surprised many people.
Probably to explain some people's doubts, Daenerys Entertainment Group's official website additionally published a more detailed list of stock awards and subscriptions.
Nancy Brill's 7 million shares, 5 million of which are bonus shares, and the other 2 million shares are internal subscription shares.
Amy Pascal's 35 million shares were all obtained from incentives. The CEO of Daenerys Entertainment took the initiative to give up her 3 million internal subscription shares to other employees of the group.
Robert Iger, who is co-president of the group with Nancy Brill and is mainly responsible for Daenerys' entertainment television business, received a total of 4.5 million shares, with an award share of 3 million shares and 1.5 million shares from subscriptions.
Mark Belford, Vice President of Global Operations, who is in charge of the global distribution of Daenerys Entertainment's film and television works, Ella Deutschman, President of Highgate Pictures, and Danny Morris, President of New World Pictures, The shareholding amount of the three people is 3 million shares, of which 2 million shares are bonus shares and 1 million shares are subscription.
Although the total value of the stocks received by the five core executives Nancy, Iger, Mark, Deutschman, and Maurice is far less than Amy, it has exceeded the salary of most executives of the same level in Hollywood. Even if the minimum single share value is still calculated at US$18, the total value of the stocks received by the five core executives is at least US$54 million.
Across the United States, there are only a handful of corporate executives who can receive such a large sum of money in one go.
Of course, because Daenerys Entertainment Group prefers a flat corporate structure, except for Simon, the actual controller, and Amy, the CEO, it is impossible for other executives to gain much power, so the Nancy Five Compared to Amy, the returns that can be obtained are not too high.
In fact, the distribution rules of most companies are like this.
If the leader gets the biggest share, the income of the next-level executives may be reduced by zero.
Moreover, the high rewards Amy Pascal received were also due to her being the founding veteran of Daenerys Entertainment. Other core executives only joined after the gradual rise of Daenerys Entertainment.
Many times the earlier you join a company the more you can gain.
Just like Steve Ballmer, an early core executive of Microsoft, who later gradually accumulated a net worth of tens of billions of dollars, Indian CEO Satya Nath who brought Microsoft back from the bottom to a peak of trillions in market capitalization decades later Della can only earn an annual salary of tens of millions of dollars.
Including the current Yigrit.
Jeff Bezos and the other three are expected to receive 5% of Eagleite shares after the contract expires. Alice Ferguson, who is in charge of the e-commerce business and has successfully transformed the Big Three of Eagleite into the Big Four, Even if Simon specially adjusted the contract for her after recognizing the housekeeper's ability, Alice could only get at most 3% of the stock before Igret's IPO.
In fact, in Simon's mind, the housekeeper's ability is much stronger than that of Tim Berners-Lee and Carol Bartz among the original Big Three, and is almost as good as Bezos, but that's how things are.
The topic returns to Daenerys Entertainment. Tom Pollack, who was once the president of Universal Pictures and served as the president of Daenerys Pictures after the merger, received the smallest share of shares among the seemingly core executives. , there are only 1.5 million shares, of which the bonus share is 500,000 shares, and the other 1 million shares are internal subscriptions.
Everyone in the circle also knows that this executive who serves as the head of Daenerys Films, the core of Daenerys Entertainment's three labels, actually has very low authority.
Most of the decisions of Daenerys Films are made by Simon and Amy themselves. Although Tom Pollack has a title of president, he is more of a butler-like executor, and he joined Daenerys Entertainment. It's also late, and it's not actually the core of Daenerys Entertainment Group.
Being able to obtain 1.5 million shares may be because Simon Westeros wanted to protect the face of this veteran Hollywood executive.
In addition to the core management, such as Pixar President John Lasseter, Daenerys Special Effects President Mark Silvers, Marvel Entertainment Chairman Stan Lee, Fashion TV President Anna Coleman, etc. Silk Entertainment executives at all levels shared another 13.5 million stock awards and about 7 million shares of subscription shares.
According to comprehensive statistics, of the total 176 million shares transferred by Simon Westeros, 63 million shares are of a bonus nature and are basically owned by management above the level of director of Daenerys’ entertainment department. 113 million shares were subscribed, and the management took a small share, only 14.5 million shares, most of which were subscribed by employees at all levels.
Speaking of which, the biggest difference between the two parts of stocks awarded and subscribed is actually tax.
The bonus stocks received by many executives need to be taxed according to income tax standards.
You do not need to do this for the time being if you subscribe for part of the stock. You will only need to pay capital gains tax when you sell it in the future.
Moreover, because the shares subscribed internally are additional issuances, Daenerys Entertainment does not need to pay taxes, but the funds raised must be used as Daenerys Entertainment’s cash reserves for company development purposes and cannot be allocated to Simon personally.
In fact, through internal stock subscription of 113 million shares, Daenerys Entertainment only recovered $1.09 billion in funds. In other words, the actual value of rewards Simon gave back to employees of the entire Daenerys Entertainment Group far exceeded the US$1.5 billion estimated by the media.
In fact, Simon doesn't really believe that money can win people's hearts. He believes more in the idea that I will give you whatever you pay.
Daenerys Entertainment Group has developed rapidly over the years. Simon will not underestimate his role in it, but he will not ignore the concerted efforts of the entire group. Therefore, he will not be stingy when it is time to give.
However, Simon has no intention of letting go of control of Daenerys' entertainment.
The prospectus specifically states that Daenerys Entertainment will adopt a dual-class share structure. After completing the equity adjustment in March, all 1.937 billion Daenerys Entertainment shares held by Simon will be Class B shares with 10 times the voting rights. , the 176 million shares held by all employees of Daenerys Entertainment are Class A shares, with only one-tenth of the voting rights of Class B shares. The 250 million new shares planned to be issued during the IPO process are also Class A shares with only one-tenth of the voting rights.
It is expected that after the official listing at the end of June and early July, the total share capital of Daenerys Entertainment Group will expand to 2.363 billion shares. Simon's personal shareholding ratio will drop to 81.9%, but the voting rights will still be as high as 97.8%.
Even if Simon intends to sell some of his shares in the future, he has the right to convert Class B shares into Class A shares before the sale. It can be said that as long as Simon does not give up voluntarily, even if the Westeros family's shareholding ratio in Daenerys Entertainment Group drops to less than 10% many years later, they can still maintain absolute control over the company.
It is not difficult to imagine that due to the recent public opinion situation, after the dual-shareholding structure of Daenerys Entertainment was exposed, there was naturally another inevitable criticism.
Simon just ignored it.
Whether it's Cisco, AOL or Daenerys Entertainment, Simon's dual-class operations are completely within the rules of the game.
Even if some people are dissatisfied, even if the authorities amend the relevant provisions of the company law in the future, it is impossible to change many established facts according to the unspoken rule of non-retroactivity in US law.
Ever since the news of Daenerys Entertainment's upcoming IPO was released, there has been a popular saying in the industry that this entertainment giant, whose core film business has accounted for about 40% of Hollywood's share, no longer has much growth potential, so it is not Not optimistic about its long-term development prospects.
Recent events have proven this view to be profoundly wrong.
Not to mention anything else, during this period, the social game "Farm" produced by EA, a subsidiary of Daenerys Entertainment, suddenly achieved phenomenal success, which has proved that in addition to the film business, Daenerys Entertainment's game business still has Very high growth potential.
Daenerys Entertainment Group's film released in the first week of Easter is "Teenage Mutant Ninja Turtles 3," the third installment in the "Teenage Mutant Ninja Turtles" series. The film opened on April 1, with a final box office of US$21.62 million in the first week and seven days. Compared with the film's production cost of US$40 million and the publicity budget of US$20 million, the opening result of US$21.62 million obviously fell short of expectations.
However, the estimated total box office in North America of around US$80 million is actually a pretty good ending for this series. Counting overseas box office, the film can easily recoup its costs and achieve profitability through global theatrical distribution.
At the same time as the movie was released, the "Teenage Mutant Ninja Turtles" series of games on the Nintendo console platform also launched another sequel on April 1. The sales volume in the two major markets of North America and Japan was 116,000 boxes in the first week, even if it cannot be compared with the first generation "Teenage Mutant Ninja Turtles" It is comparable to the phenomenal sales of the Teenage Mutant Ninja Turtles game, which has exceeded 5 million boxes worldwide. Based on the first week results, it is expected that the total global sales of this sequel will also be around 2 million boxes, which is still a very rare success.
Online games, console games, coupled with EA's strength in the PC stand-alone field through real-time strategy games and sports games, the industry predicts that the future output value of the electronic game field will be no less than that of the movie market. Daenerys Entertainment will have a long future. It has maintained very impressive and rapid growth for a period of time.
On the other hand, after the Backstreet Boys, a group owned by Daenerys Records, officially released the album of the same name "Backstreet Boys" on March 25, the album sold 270,000 copies in the United States in the first week alone, and the sales in the following weeks were even higher. It was a counterattack to 320,000. It is estimated that the total sales volume of "Backstreet Boys" in the United States alone will reach about 15 million copies. Although its overseas potential is currently unknown, based on its popularity in North America, it is conservatively estimated that the total global sales volume of this album will exceed 20 million copies.
Simon has personally followed up on the formation and promotion of the Backstreet Boys since last year. After a busy year, it finally paid off.
The success of the Backstreet Boys not only means that Daenerys Records has established a firm foothold in the mainstream pop music field, but also means that the attempt to mass-produce Teen-Pop singers is truly feasible.
Similarly, the sudden popularity of the Backstreet Boys also gave this entertainment giant another point in the relatively weak recording field at the critical time when Daenerys Entertainment submitted its IPO application, proving that Daenerys Entertainment In addition to the group's core film business, there is also huge growth potential in the recording field.
In the description of the company's development prospects in the prospectus, in addition to the prospects for the two high-growth businesses of games and music, it also focused on the television business that Daenerys Entertainment has been actively deploying.
In terms of content production, Daenerys Entertainment not only created a craze for reality shows, but also launched popular series such as "Seinfeld" and "Desperate Housewives" in recent years.
In terms of TV stations, Daenerys Entertainment already fully owns the basic cable network USA with a total subscriber base of more than 90 million. Fashion TV, a professional fashion TV station launched last year, has also completed its full launch in major countries such as North America and Europe. The two targets Cable TV networks with precise and clear audience groups have maintained very rapid performance growth.
Not only that, Daenerys Entertainment also stated in its prospectus that it will further expand into the television field after the IPO.
There is nothing subtle about this description.
The lifting of the ban on federal media integration is already an inevitable trend. Once the ban is lifted, Daenerys Entertainment will undoubtedly be the one with the most strength to merge with the three traditional public television networks in the United States.
Some analysts on Wall Street predict that the listing of Daenerys Entertainment will largely pave the way for the future merger of large public television networks. On the one hand, it will raise funds, and on the other hand, it will reduce the federal influence on Daenerys through a public listing. political and commercial obstacles to further expansion of Silk Entertainment.
Therefore, it can be seen that whether it is from Daenerys Entertainment’s still rapidly developing games and music businesses, or its possible future expansion into the television field, this entertainment giant can continue to maintain considerable growth for a long time to come. high growth potential.
What's more, Daenerys Entertainment's movie business isn't really hitting its ceiling.
Only in the United States, the film market capacity has maintained a natural growth of more than 10% in the past few years. Hollywood, which uses super-grossing blockbuster films as a 'battery ram', is even more unstoppable in conquering the global film market. And Hollywood The super bombshells of the past few years are basically produced by Daenerys Entertainment.
Considering that Daenerys Entertainment has strong technical or IP guarantees such as Daenerys special effects, Pixar Studios, Marvel Entertainment, etc., it is not possible for this Hollywood giant to continue to maintain performance growth in its core film business. question.
Coupled with Daenerys Entertainment Group's layout in consumer peripherals, theme parks, movie theaters, and video tape chains, the first version of the prospectus confidently predicts that Daenerys Entertainment can still maintain a 20-year growth rate for at least the next five years. % to 30% annual revenue growth.
Obviously, in order to leave room for oneself, this forecast number still tends to be conservative.
After all, in the two years after the merger of MCA, Daenerys Entertainment's annual growth rates reached 37% and 35% respectively. This is actually the corporate growth data when Daenerys Entertainment's core film business is very strong.
It is conceivable that even if Daenerys Entertainment's potential expansion into the field of large public television networks is not considered, it will not be a problem for Daenerys Entertainment to continue to maintain an annual revenue growth rate of more than 30% for at least the next five years.
Although after Daenerys Entertainment submitted its prospectus, many media and Wall Street analysts with ulterior motives still insisted that Daenerys Entertainment had hit the growth ceiling, but most potential investors have no idea about the true value of Daenerys Entertainment shares. But he knew it.