Becoming Rich with Daily Scavenging APP-Chapter 496: Negotiation and Threats

Chen Yiyang asked his assistant to look into the details of the app that had sent him information about bargain opportunities.

Then, he began assembling a team to contact the large shareholders behind Bilibili and seriously pushed forward the acquisition of Bilibili.

The news that Chen Yiyang intended to buy Bilibili was not deliberately concealed, so the information quickly spread in the market.

This set off a small wave of stock price increase for Bilibili.

Once Bilibili’s current management learned of the matter, they actively reached out to Chen Yiyang, even traveling directly from Shanghai to Lin’an for face-to-face negotiations with him.

For Bilibili’s management, being able to sell Bilibili at the present moment would be a blessing.

Because the current issue for Bilibili was not only that it wasn’t profitable, but was losing tens of billions each year.

It’s quite rare for an app with over three billion monthly active users to incur such losses annually.

According to studies by relevant institutions, Bilibili’s ad monetization efficiency is on par with Kiwifruit, ranking at the bottom tier in the video software industry, with ad revenue per monthly active user being only around three yuan.

That might sound decent considering how well Kiwifruit performs.

But the problem is Kiwifruit’s income primarily comes from paid membership services, while Bilibili relies exclusively on advertisements.

This represents the same income level for one company’s main business and another’s secondary business.

So Bilibili has been crazily cutting down video quality these years because they’ve lost so much that they even need to save on bandwidth fees.

Hence, industry insiders currently assess Bilibili as being on an unavoidable downward trajectory.

Selling Bilibili now still brings over 40 billion in value; if delayed further, it might drop to two or three hundred billion.

Bilibili’s current investors also hope Bilibili can either quickly turn a profit or boost stock prices so they can cash out and exit.

With someone like Chen Yiyang showing interest, Bilibili’s management is, of course, enthusiastic about facilitating this deal.

Regarding Bilibili’s major shareholders, Tengxu straightforwardly expressed willingness to sell shares.

Even though Tengxu has considerable trust in Chen Yiyang’s vision, they also feel Bilibili’s messy situation isn’t salvageable and it’s better to sell outright.

Of course, Teng Xuyang opted for a stock swap in the deal with Chen Yiyang.

This means exchanging Tengxu’s shares in Bilibili with a combination of shares in Yiyang Automobile and some cash.

Tengxu owns fourteen percent of Bilibili’s shares, making it the largest shareholder of Bilibili.

Ari’s stance is ambiguous, not saying whether they’ll sell or not, only indicating they’ll have to see.

Chen Yiyang was uninterested in Ari’s intentions and continued negotiating with other shareholders.

Bilibili is a classic example of an AB share company, meaning shares with different voting rights.

Bilibili’s chairman, Chen Rui, holds only ten percent of Bilibili’s shares but controls forty percent of the voting rights.

If Chen Yiyang just wants to control Bilibili.

Then, with Tengxu’s shares and Chen Rui’s shares, Chen Yiyang would have enough to control Bilibili.

Of course, to be safe, Chen Yiyang also chatted with the three large investment companies holding Bilibili’s shares.

These three investment companies collectively hold fourteen percent of Bilibili’s shares.

Their attitude was uniform; as long as Chen Yiyang paid in cash, they were willing to sell their shares, asking a total of 7 billion, with some premium, but not overly high.

As for Chen Rui’s own ten percent shares and forty percent voting rights, his asking price was 8 billion.

"The price is a bit too high." Chen Yiyang said looking at Chen Rui, "Currently, Bilibili is only worth around 40 billion in total, asking 8 billion for ten percent of shares is excessive."

"But I also hold forty percent of the controlling rights, without this control, even if you acquire many shares, you won’t be able to control Bilibili."

There is naturally a reason for Chen Rui’s high asking price.

Control is far more crucial than mere shares for a company.

But Chen Yiyang was not swayed by this.

He was already paying a significant premium to acquire Bilibili.

Moreover, everyone knows Bilibili is currently on a downward path, rendering control worthless.

"5.5 billion is the highest I can offer." Chen Yiyang said.

"That’s too low." Chen Rui still insisted on his asking price.

Chen Yiyang didn’t say more, simply producing Bilibili’s previous financial report.

"Did you pay yourself a salary of 250 million annually over the past years?"

"What’s wrong with that." Chen Rui’s tone suddenly grew tense.

Salaries for CEOs of large companies aren’t particularly high.

The reason isn’t that these CEOs aren’t greedy, but rather that higher salaries incur higher taxes.

For example, with annual salaries of over two billion, taxes exceed fifty percent.

Therefore, it’s normal for CEOs to receive a fixed salary plus some equity incentives.

As long as the company performs well, cashing out on equity at a high point not only yields more money than salaries but also incurs lower taxes.

But now, with Chen Rui allocating such a high annual salary to himself.

There’s only one reason — he himself believes Bilibili’s stock is no longer valuable, and prefers cash in hand over equity incentives for peace of mind.

"You could choose not to sell your shares." Chen Yiyang said to Chen Rui, "But if I become a major shareholder, I will definitely request a comprehensive review of Bilibili’s entire financial status.

Even if I’m an outsider, I’ve heard of the corruption issues in Bilibili’s gaming industry investments. It’s hard to believe such corruption doesn’t have authorization from top management."

After listening to Chen Yiyang, Chen Rui fell silent.

Bilibili’s hefty external investments are widely known for their corruption.

The reason the whole company turns a blind eye is because everyone knows this ship won’t last, and everyone inside is busy pocketing money.

The plan was to scoop money until someone takes over, then cash out and leave; if no one takes over, losing investors’ money and escaping was the fallback.

If Chen Yiyang launched a comprehensive financial audit, few within Bilibili could claim innocence.

"Moreover," Chen Yiyang continued, "Bilibili is listed on the US stock market, right? The US strictly investigates financial fraud and deceit, and if discovered, they will surely invoke long-arm jurisdiction to impose fines or arrest individuals. You know, I have significant connections overseas."

People in China’s business circle are aware of Chen Yiyang’s overseas connections.

Although Chen Yiyang has never openly demonstrated his connections in the United States, during the previous issue involving the domestic manufacturing of phones by the president.

Lei Jun mentioned in casual conversation at gatherings that Chen Yiyang facilitated that connection.

If he can bridge the gap with the Great Commander, initiating a re-assessment of Bilibili’s financials and a corruption investigation might be possible.

Those involved wouldn’t just face difficulties in staying within the country; they’d also have to worry about potential pursuit by the United States if they fled abroad.