Sunset and sunrise, for most people, this is just an ordinary day, but for Apple and its investors, this is another cruel trading day.
Just like yesterday, the pre-market news was all negative about Apple. From yesterday's close to today's pre-market, Apple did not issue any announcements, nor did it give investors an explanation for the stock price collapse. The media seized on this and made a big fuss. Apple has completely given up resistance today.
In fact, whether Apple responds or not, the result is the same. If it doesn't respond, the media will say they have given up resistance. If it responds, the media will say they are helpless and powerless.
In the pre-market news, a TV station's financial program said that according to rumors, Jobs had submitted his resignation to the board of directors. Apple is now discussing the selection of a new CEO, but no one seems to be interested in this position.
Before the market opened, some financial experts predicted that Apple's stock price would fall by at least 5% or even higher today.
If there is any major bad news today, it is estimated that Apple's stock price will fall by more than 10%.
When the U.S. stock market was about to open, Louis Martin, senior VP of Sequoia Capital, got off the plane, hurriedly passed the customs, took a special car sent by Sequoia China Branch, and went straight to Makino Technology to meet Li Mu.
Although Louis Martin flew all the way, fortunately it was a private plane, so the more than ten hours of flight was not tiring for him at all, but gave him an excellent rest and relaxation experience, so at this moment he On the way to Makino Technology, I was full of energy.
Originally, Louis Martin was too embarrassed to go talk to Li Mu after landing at night, but Li Mu insisted on letting him meet at Makino Technology as soon as possible, so he could only rush to meet Li Mu in the dark of night.
Li Mu met Louis Martin, who had come all the way from the United States, in his office. The two had met during Makino Technology's last round of financing, but that was mainly for Makino Technology's financing business.
Louis Martin is not only a senior VP of Sequoia, but also has extremely rich experience. He has been working in the securities industry and IPO field in the early years, so he has a very in-depth understanding of the U.S. stock market. Under normal circumstances, the companies invested by Sequoia eventually The operation to go public in the United States was led by Louis Martin.
It can be said that Louis Martin is the one who knows the U.S. stock market best in the entire Sequoia system. With just one sentence from Li Mu, Sequoia sent such a trump card all the way to Yanjing. It can also be seen from this that Sequoia is very interested in the U.S. stock market. The importance of Makino Technology.
As soon as Louis Martin saw Li Mu, he immediately stepped forward to shake hands with Li Mu and said to Li Mu in fairly fluent Chinese: "Hello, Mr. Li, we meet again!"
Li Mu smiled slightly, shook hands with him, and said, "Thank you for your hard work, Louis. You flew here so far and couldn't even rest for a moment."
Louis Martin said with a smile: "Mr. Li, what I am flying here this time is our chairman's private jet. To be honest, it is much more comfortable there than in a five-star hotel."
"That's good." Li Mu nodded, pointed his palm towards Li Ziwei, and said, "This is my personal assistant Li Ziwei. Please leave each other's contact information to facilitate the exchange of information in the future."
Louis Martin hurriedly shook hands with Li Ziwei and said: "Hello, Miss Li, it's a pleasure to meet you."
Li Ziwei also hurriedly shook hands with him to say hello, and then the two exchanged business cards.
Li Mu said to Louis Martin: "Louis, let's sit down and talk. If you want to drink something, ask Ziwei to ask someone to prepare it for you."
Louis Martin said to Li Ziwei: "Miss Li, please give me a cup of coffee."
"Okay." Li Ziwei nodded and asked Li Mu: "Mr. Li, where are you?"
Li Mu said: "Have a bottle of Coke and add some sugar. I'm so tired these days."
After taking a seat in the reception area, Li Mu got straight to the point and said to Louis Martin: "Louis, the reason why I came here to find you so far is actually to ask a question, how can I acquire a majority of Apple's shares, and then Delist Apple from Nasdaq and take it private?”
Louis Martin guessed that Li Mu was looking for him for this purpose. He hesitated for a moment and said, "Mr. Li, I would like to take the liberty of asking, do you want to fully acquire Apple?"
Li Mu nodded: "Yes, I want every share of Apple, every product line and related patent ownership, and even their team."
Louis Martin said: "Mr. Li, judging from Apple's current plummeting trend, it is not impossible for the market value to fall below three billion US dollars. By that time, everyone from stock investors to individual shareholders and holding capital will go crazy. Even if these investors They only bought a hundred shares of Apple stock to make money, but the plummeting stock price and market value will make them lose all their money, and it is very difficult to stop the loss. In this case, you only need to send Apple a A written offer document, setting a market value for Apple’s acquisition, and then letting Apple’s management and board of directors consider it.”
"It's that simple?"
Louis Martin laughed: "This is the first hurdle, because equity does not represent voting rights. If you want to acquire a majority of Apple's shares, you must first ensure that the majority of Apple's voting rights are inclined to agree to your acquisition. If these hands hold the votes, If the powerful people agree, then it doesn’t make any sense even if the shareholders behind it don’t agree.”
Li Mu asked again: "Where are the circulating stocks on the market?"
Louis Martin said: "Those who don't need to worry, small shareholders and retail investors have no say in the privatization of large companies. As long as the offer passes the vote of Apple's management, the privatization will be easy."
Having said this, Louis Martin added: "However, since it is privatization, basically most of them have to give a certain premium, some are 40-50%, some are higher. With Apple's current situation, We can't just give them a specific amount of premium right away. We need to conduct in-depth investigation and evaluation to understand their operating conditions and the possibility of recovery in the future. On the other hand, we also need to understand the current situation of their shareholders. mental state;
If most shareholders are eager to jump out of this fire pit, then privatization acquisitions will be much easier. As long as they are given a certain premium, they will get rid of Apple's shares like a hot potato, but if they are in Apple Even if the stock price plummets, if you are still optimistic about Apple's future, then a privatization acquisition will not be that easy. Maybe even if you give a 100% premium, it may not be successful. "
Li Mu nodded slightly and said, "The U.S. stock market has just opened. Let's see what Apple's opening price is today."
As soon as Li Mu finished speaking, Li Ziwei came over with her laptop in her arms. After calling up the US stock trading software on it, she placed the computer in front of Li Mu.
Louis Martin couldn't see the computer screen and said: "I read some pre-market news on the way here. Overall, today's capital market is very unfavorable about Apple's future. I think today's stock price will drop at least 8 cents." Points and above.”
Li Mu looked at the data on the screen and said in surprise: "It seems that your estimate is not wrong. Apple fell 7 points at the opening, from 5.47 US dollars to 5.08 US dollars. It should be certain that it will fall below 5 yuan today." matter."
Louis Martin nodded and said: "Apple's pre-market news today has new bad news. A large number of returned iPods will force Apple to spit out the profits it has already eaten, and there are still a large number of users. They are protesting and asking Apple to provide a return or subsidy policy. The return of iPods and the backlog of inventory will cause Apple's entire supply chain to collapse. Coupled with the users who continue to protest, it will be really difficult for Apple this time. I can handle it.”
Li Mu asked Louis Martin: "Do you know much about Apple? Do you know what their current inventory of iPod3 is?"
Louis Martin said: "Normally, for highly competitive electronic products, the inventory digestion cycle is at least 5-60 days. If a mobile phone brand has annual sales of 10 million units and monthly sales of 830,000 units, then their normal The inventory should be around 1.5-1.6 million units."
Speaking of which, Louis Martin added: "However, Apple's iPod sales were still very good before, so their inventory digestion cycle should be very short. I estimate that it is only thirty days at most. Taking five million units a year as an example, The inventory should be equivalent to one month's sales, about 400,000 units, and combined with recent user returns, it is estimated to reach 500,000 units."
Li Mu nodded and said: "If Apple's iPod inventory is 500,000 units, and current sales are greatly reduced, Apple will definitely not continue to maintain the previous production, and will most likely reduce most of its production capacity, and then resume production." Deplete inventory through promotions and price reductions.”
"Absolutely." Louis Martin shrugged and said: "Currently, there is no other way to go except to drastically reduce the price of iPod 3. However, if Apple significantly reduces the price, the iPod business line will have no money to make, so once Apple is ready to significantly reduce the price, Clearing inventory basically means that iPod production will soon be discontinued, because they cannot continue to allow OEMs to produce at a loss, and OEMs also need enough orders to survive. If Apple reduces or stops production, the iPod production line will be It may stop, and by that time, the iPod will be completely dead."
Li Mu smiled and said: "If the inventory of 500,000 units is liquidated at a significant price reduction, Apple may not be able to recover a cent of profit, and it may even have to pay dealers and OEMs, right?"
"That's right." Louis Martin nodded and said: "But Apple used to be very strong with dealers and OEMs. The dealers paid for the goods first and then picked up the goods, and the OEMs delivered the goods first and then settled the payments on a periodic basis. So if Apple To act rogue, you can first default on the unsettled payment to the dealer, then clear the inventory through your own Apple-Store, retain the cash in exchange for clearing the inventory, and continue to default on the OEM. In this case, how can the inventory of hundreds of thousands of units be given to the dealer? Apple received hundreds of millions of dollars in cash flow."
After a pause, Louis Martin added: "However, this will also bring hundreds of millions of dollars of debt to Apple. If Apple has any way to break the situation, it can use this money to rescue the emergency first, but if not, it will withhold this money." It doesn’t make much sense to them, it just depends on whether Apple has any secret weapons on hand.”
Li Mu was a little shocked.
In comparison, I was far from professionals like Louis Martin. I only thought about Apple's stock price plummeting, its market value plummeting, its profits plummeting, and all its businesses being hit hard. But I didn't expect that Apple could also use its inventory to start a transfer. Although he demolished the walls of dealers and OEMs to support himself, he was still able to get over 100 million US dollars in cash. As the saying goes, a skinny camel is bigger than a horse...
Apple definitely still has abundant cash flow at the moment. After all, the impact is on the stock price and current and future profits. Li Mu cannot reduce the current cash on Apple's account. In addition, the inventory may be converted into over 100 million US dollars in cash. It does add up to a large amount of money. If Apple has so much money and suddenly comes up with something new in a hurry, it might be able to break out of the adversity. If that's the case, But it’s so fucked up!
Immediately, Li Mu asked Louis Martin: "If I want to acquire Apple as soon as possible, is there any good way?"
(End of chapter)