Just when Claire announced her resignation, there was another important event for Barron, which was O2 Telecom's IPO on the London Stock Exchange.
This year, many companies previously acquired by Baron will be listed one after another. One reason is that these companies have been acquired by him for more than three years, and it is time for them to go public and conduct a wave of capital operations.
In addition, it is now 2006, less than two years after the subprime mortgage crisis broke out. We also need to seize the opportunity to go public before the crisis breaks out, because the economic cycle is approaching its peak before the crisis, and capital is hot. Going public now can achieve better stock price performance.
After O2 Telecom's listing, Argos Retail Group will also be listed on the London Stock Exchange - they submitted their listing application at the end of February and it has been approved.
As the largest IPO in the UK since the Internet bubble crisis in 2001, the listing of O2 Telecom has attracted much attention.
This time, O2 Telecom's listing will publicly sell 1 billion common shares, of which 500 million shares will be newly issued shares and 500 million shares will be sold by DS Holdings (Cavendish Trust Fund).
In addition, during the IPO process, the Saudi Public Investment Fund and Caesars Fund have converted their O2 convertible bonds into its common stock at O2's stock issue price of £5 per share.
In this way, the Saudi Public Investment Fund will hold 200 million O2 Telecom common shares, and Caesar Fund will hold 400 million O2 Telecom common shares.
According to the issue price of 5 pounds per share of O2 Telecom, after the IPO, its total share capital will be 6.1 billion shares, and the market value will be as high as 30.5 billion pounds!
From the subscription of O2 Telecom's IPO, investors are still very enthusiastic, and many institutions have participated in the subscription of new shares. Among them, the Saudi Public Investment Fund subscribed for 10,000 shares of O2 Telecom again - it's not that they don't want to buy more, but during the roadshow, O2 Telecom's shares have been oversubscribed, and they can only get these subscription shares at most.
Because sovereign funds from wealthy Middle Eastern countries including the Qatar Investment Authority and the Kuwait Investment Authority are also participating in the subscription, and investment institutions from the United States, Europe, East Asia and other places are also actively subscribing, including financial giants such as Vanguard Group and Blackstone Group.
As everyone expected, on Monday, May 15, O2 Telecom CEO Barry Trelles rang the bell of the London Stock Exchange and its shares began trading on the main board of the London Stock Exchange.
At 8 o'clock in the morning, the call auction was completed. O2 Telecom opened at 5.45 pounds, 9% higher than the issue price. The highest price during the trading session reached 5.89 pounds...
It finally closed at £5.74, up 14.8% from the issue price.
At this price, O2 Telecom's market value exceeds 35 billion pounds, surpassing France Telecom to become the third largest telecommunications company in Europe after Deutsche Telekom and Vodafone.
At this time, DS Holdings (Cavendish Trust Fund) held 4.5 billion shares of O2 Telecom, accounting for 73.77%; Caesar Fund held 400 million shares of O2 Telecom, accounting for 6.56%; Saudi Public Investment Fund held 300 million shares of O2 Telecom, accounting for 4.92%.
It is also worth mentioning that during this IPO process, DS Holdings sold 500 million shares of O2 Telecom shares they held and raised 2.5 billion pounds.
Barron's originally planned to return the funds to Northern Rock Bank - they had previously mortgaged part of O2 Telecom's shares and borrowed £4 billion from the bank.
But after comprehensive consideration, Barron gave up this idea...
You should know that the 4.5 billion O2 Telecom shares currently held by DS Holdings are worth 25.83 billion pounds based on the closing price on the first day of listing.
Even if calculated based on the 55% of O2 Telecom shares they held at the time, or 2.75 billion O2 Telecom shares, which were pledged to Northern Rock Bank when the loan was taken out, its value was as high as 15.785 billion pounds.
Therefore, O2 Telecom's share price at this time would have to fall by more than 75% to reach the level of the £4 billion loan originally obtained by mortgaging these shares.
Take Vodafone Group, the largest telecommunications company in the UK, as an example. During the last Internet bubble crisis, its stock price was at its lowest, down more than 80% from its high before the bubble crisis.
But in the original time and space, during the subsequent subprime mortgage crisis, the lowest share price of Vodafone Group was "only" less than 50% lower than the high value before the crisis...
It can be said that in the last Internet bubble crisis, telecommunications companies were also collectively hit hard, and it was even called the "telecom crisis"...
But during the subprime mortgage crisis, compared with other industries, especially real estate and finance, the losses of the telecommunications industry, as a part of the technology industry, were not too exaggerated.
The only thing that made them uncomfortable was that due to the impact of the subprime mortgage crisis, loans and financing for the telecommunications industry became much more difficult. Therefore, after that, many telecommunications operators' willingness to upgrade and build new networks dropped significantly. They adjusted their existing investment plans, cut investment expenditures, and held large amounts of cash and cash equivalents to hedge against risks.
Therefore, in the case of O2 Telecom, at least during the subprime mortgage crisis, it is unlikely that the share price will fall by more than 50%, and the O2 Telecom shares held by the Cavendish Trust will not be endangered because of the loan from Northern Rock Bank.
Moreover, even if such an extreme situation occurs, Barron will not lack sufficient funds to deal with it.
Therefore, he finally chose to invest the 2.5 billion pounds in futures that were bullish on international gold prices.
After some research, Barron learned that the current gold price is around $660 per ounce, and by mid-March 2008, the international gold price will exceed $1,000 per ounce.
This is a very good investment opportunity.
The investment scale of the entire gold market is as high as trillions of US dollars, which is fully capable of accommodating their current capital scale and will not be greatly affected.
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They began to build positions in gold futures markets around the world, including the London Gold Exchange and the New York Mercantile Exchange.
The international gold price also fell from around $660 per ounce in the beginning to below $550 per ounce in mid-June. By the end of June, they finally completed the gold futures position...
DS Investment Company's holding cost this time is about US$600 per ounce, and after nearly two years, it will be a huge profit.
This is also the reason why they are still confident in taking on those high-value loans, including those from Northern Rock Bank. After all, in an emergency, they can close part of the gold futures positions first to deal with it.
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"Your Highness, we have already contacted Ford. Although they have said that they have no intention of selling at the moment, they have not refused too firmly..."
When Barron finally found time to accompany Tamaran Ecclestone on vacation in Italy, he received a call from Pat Friedman, CEO of Caesars Investment Management, who was traveling to the United States.