"President, this is the details of our company's stock transaction last week. The turnover rate in the secondary market is relatively large, which is a typical incremental price drop, and the situation of institutional withdrawal... is relatively serious."

One day in mid-April, Vanderbilt, the headquarter of Wang'an Computer Company in Silicon Valley, took a report in a heavy mood and threw it on the desk of CEA Wanglie.

"This bastard Gu Ao! He makes a big fuss! Didn't those people on Wall Street jump out to punish him?" Wang Lie was so angry that he was beaten up and punched the desk heavily.

In his opinion, he still suspects that Gu Ao is a petty guy and is jealous of the situation.

Otherwise, everyone is Chinese. Well, at least they are all Chinese, and there is no core conflict. Why do you have to help ibm and Microsoft in this way and criticize other computer companies with traditional closed systems?

Gu Ao certainly knew the outcome of Wang An's computer for a long time and had the idea of ​​replacing it. But no one would have thought of this idea at this critical moment.

Wang Lie took over the CEO position in Wang An Computer Company for more than a year, and his father Wang An's cancer has indeed worsened a little.

The company has really suffered from financial data for the first time, but the external financial reports can still be concealed.

The company's sales are still good, with nearly 2 billion US dollars a year. However, in the year after Wang Lie took office, the company's product models have further aged and their market competitiveness has declined, so they have to maintain this sales data through discounted sales.

In other words, when his father was in power, the company not only had high sales, but also had high gross profit margins, strong product competitiveness, and had a net profit of 200 to 300 million US dollars a year.

After Wang Lie took over, he relied on discounts and his sales did not drop much, but the total price fell by nearly 20%, and these 20% were almost the original profit. Therefore, sales fell from US$2.4 billion a year to US$1.8 billion, but net profit fell directly from US$280 million to nearly 100 million negative.

To cover up the loss of 100 million, the current financial fraud practice is to turn part of the "cost" into "investment".

In Silicon Valley, the cost of being able to deal with this is mainly R&D costs.

Just like Huawei in later generations, why the profits of financial statements are low? That is because Huawei's R&D costs are 100% cost-effective. Huawei pursues low-key and ugly financial statements. Anyway, this company is not listed, so it doesn't need to please investors, and it just happens that it can secretly hold back its big moves.

Another typical example is Apple. Many Apple research and development do not directly spend their own costs, but use "investment" to collect a small external scientific research company, become its own subsidiary, and then occupy the company's technical achievements.

When using the "investment" trick, it will show that your parent company's expenses are very low, and most of the gross profits earned can be converted into net profits. You only use these net profits to "buy, buy, buy, buy" afterwards. You do not spend the first party on the net profits for research and development, but let the person you buy, buy, spend it, so that the parent company's financial report will look good, and can please investors and raise the stock price.

Wang Lie used this trick last year when facing the crisis of Cunningham, John Chambers and others betrayal and losing business.

He asked the financial director Vanderbilt to find a way to build some new subsidiaries, which were actually controlled by the Wang An Group, and then outsourced the company's R&D work and invested the costs. So although Wang An Computer actually lost 100 million US dollars this year, it was not obvious in the stock market statement, and it was probably just breaking even.

However, this kind of trick cannot be used frequently, especially since Wang An computer does not have the tradition of doing this, and hasty setting up a plan will definitely have many loopholes.

If there is no improvement in another year or two, or the epoch-making R&D results cannot be produced, the lid will not be covered.

Another problem that is more dangerous, but now seems to be extremely low-probability is that once the US stock market, especially the technology stock market, experiences a major bear market, then these tricks of turning a blind eye during the bull market will not be able to cover up.

It is possible for the US Securities and Exchange Commission to relax a little during a bull market.

Once it reaches a bear market, facing the rage of American stock investors, the US Securities and Exchange Commission will also show mercy and catch a few typical examples to calm the anger of American stock investors.

Now, Wang'an Computer, which was already struggling to maintain the situation, has suffered a decline in stock market trust, which means that the cycle of raising more R&D funds for the next generation of products may be blocked.

Although Wang'an Computer will not issue new shares at the moment, as long as it is in a bull market, when the company's own stock price rises and is favored by the capital market, it is still possible to increase financing.

This financing mainly relies on issuing corporate bonds and equity pledge loans.

For example, if the equity in Wang An and his sons have a market value of US$2 billion, then a discount is given. Generally, the mortgage-loan banks may dare to lend you $1.5 billion or $1.6 billion.

If Wang'an Computer's stock price falls, the 2 billion shares are only worth 1.5 billion, and the mortgage amount will be reduced to about 1.2 billion. If your original mortgage loan has exceeded 1.2 billion, you have to add additional mortgages to the bank and increase the equity mortgage ratio.

The most terrifying thing at the moment is that Wang An and his son have been at a high mortgage since the second half of last year.

Because in the second half of last year, co-founder Cunningham did not support Wang Lie to take over Wang An's work and threatened to withdraw. At that time, the Wang family and his son used the method of additional equity pledge to repurchase Cunningham's equity high in exchange for letting Cunningham get out and not get in the way.

Therefore, the equity pledge warning line between Wang An and Wang Lie and his son is in a state of collapse after a big drop. The sequelae brought by Cunningham's capital withdrawal is not enough to be digested in more than half a year.

In the past six months, although Wang Lie did nothing good after taking over, there was no good news to be disclosed to the public, the US stock market was a bull market overall, so even if you perform poorly, as long as you are not outrageous, the stock price will not fall.

It can be said that from December last year to March this year, Wang Lie has performed poorly in the past four months, but because Gu Ao did not take action against him during this period, Wang An Computer's stock price was lukewarm. While the market strengthened, individual stocks stabilized. Until this moment, Gu Ao came to poke the bubble again.

...

Of course, Wang Lie himself was also aware of these situations, so in the face of the bad news from Vanderbilt's announcement, he could only make the decision like this:

"At present, we can no longer add pledged equity. If the capital market's confidence in us further declines, we would rather reduce our capital expenditures and repay part of the mortgage loan."

However, money will not be transformed out of thin air. If you pretend to be Wang An’s computer, you are not short of money. You can pay off a part of the cash as the stock price falls, which means you have to cut off a large amount of expenses.

"So, which part of the expenses are cut off?" Director Vanderbilt asked very simply.

As a financial background, these people have no feelings for the company's technology and products. They are the coldest-blooded group in C. O. He can do whatever he wants to cut.

"Make a comprehensive layoff plan, but don't announce it first. If a group of people take half or low-paid leave in the near future, everyone should not be disgusted. Everyone is too busy. If it really doesn't work, they can only cut the R&D department's staff, or sell it to an outsourcing R&D subsidiary." Wang Lie thought for a while and finally answered this.

After Wang Lie finished speaking, he had a lot of other things to arrange, but after thinking about it, he found that those things were not something that Vanderbilt, a financial person, could argue with, so he waved his hand to signal that the other party could leave.

After Vanderbilt left, Wang Lie asked his secretary to arrange a car and returned to his own villa in the sea view in the Bay Area.

He felt very confused and wanted to ask his father for instructions.

The Wang family’s villa is very luxurious, you can see the pure golden beaches of San Francisco Bay and a private coast covered by long palms and coconut trees. However, the atmosphere in the villa is very depressing and solemn.

After a year of worsening, Wang An's cancer is no longer able to move around. The continuous chemotherapy has caused his original short hair to fall out, and even his eyebrows are sparse and almost gone.

At this time last year, before handing over the CEO to his son, Wang An could at least work for more than half a day every day and walk on his own. When he just asked his son to take over the CEO, he insisted on listening to one hour's work report every morning and after dinner to grasp the company's major events.

Now he can only stand up and walk with a crutch for no more than half an hour every day, and he is so breathless. The rest of the time he has to either rest in bed or ask the maid to push out a wheelchair. Moreover, his son's routine report on company affairs has been reduced to only once a day, only half an hour each time. Unless something big happens, he will not tell Wang An.

This time, when Wang Lie returned to the villa, Wang An was pushed into the glass room of Chaohai by the maid, looking at the sea half asleep and half awake.

"Dad? Didn't you fall asleep?" Wang Lie asked carefully.

Wang An opened his eyes slightly, his expression and breathing were not fluctuating: "What's wrong? It seems not good news."

Wang Lie sorted out his words: "Gu Ao, this mad dog, is eyeing us. His fallacies are very popular outside now. Wall Street investment banks are following the risks that Gu Ao is talking nonsense, looking at us technology companies with a magnifying glass. Our capital chain is very dangerous."

Wang An smeared the armrest of the wheelchair and found something like a book. Wang Lie looked at it with pleasure, but found that it was actually "The Dilemma of the Innovator".

"Dad, why don't you take good care of your health? What does this kind of thing depend on him?" Wang Lie couldn't help but persuade him.

"If I don't watch it, I will never have a chance to watch it again!" Wang An sighed, "The one who knows me, Gu Ao. Do you think what he said is wrong? Can our company go beyond this generational discontinuous aspect and develop smoothly?"

"Do you think he is right?" Wang Lie was shocked.

Wang An sighed: "If I were not sick, I would definitely be able to survive the crisis that Gu Ao mentioned and bring the company to the next generation growth curve. Unfortunately, thank you, I dare not say that I have confidence or not. Tell me, how did you deal with it recently."
Chapter completed!