Barron's trust in Chen Fuyang also comes from the remarkable achievements Chen Fuyang has made in the two and a half years of running Avago.
When Avago was first acquired, the company was actually in a loss-making state - this is why Agilent agreed to sell their semiconductor business at the time - Avago was losing more than $250 million a year at the time.
However, now, in the past 12 months, Avago's net profit exceeded $500 million!
If in the past life, Avago achieved the goal of turning losses into profits by selling some businesses that were not in line with their development direction at the time or were not very profitable, and conducting financial restructuring, then now, under the premise of maintaining some businesses that do not seem to be promising at present but are more important for future layout, Chen Fuyang was able to complete the transformation of Avago from an annual loss of more than $250 million to an annual profit of more than $500 million, which also shows his ability.
If we look at the financial data alone, Avago does meet the requirements for listing.
And according to Chen Fuyang, he also had his eyes on another semiconductor company at this time - LSI, a memory chip company in San Jose, Silicon Valley. However, this company's market value and annual revenue were higher than Avago's. Chen Fuyang also hoped to increase Avago's market value through an IPO, and then try to acquire the company.
Speaking of which, in Baron's previous life, what Chen Fuyang was best at was to use this kind of capital operation method to carry out mergers and acquisitions of large companies, whether it was LSI or the future Broadcom.
In that case, Barron decided to support his idea.
…
"According to your request, we have been reducing our holdings of listed company shares, but because we need to take into account market sentiment, the reduction ratio will not be too high."
After returning to London, Barron went to the DS Financial Center in the City of London, and Daisy reported to him about the share reduction of DS Group.
At present, they are mainly reducing their holdings in listed companies including London Stock Exchange, O2 Telecom, SEM Group and Argos Retail Group held by DS Holdings, Caesars Fund and Global Industrial Investment Fund.
Barron knew that the subprime mortgage crisis was about to come. Under the influence of this financial crisis, stock markets around the world would fall sharply, and their listed companies would be no exception. Therefore, before that, their holding companies and funds would gradually begin to reduce their holdings.
However, both Nasdaq and the London Stock Exchange require that major shareholders of listed companies make an announcement when they reduce their holdings, so the proportion of each reduction will not be too high, otherwise it will affect the sentiment of other investors and cause the stock price to fall.
Moreover, they need to give sufficient reasons for reducing their holdings. For example, the reasons they gave for reducing their holdings in companies such as O2 Telecom and the London Stock Exchange were to meet the exchange's requirements for the proportion of circulating shares, or to raise funds for other investment projects, etc.
This is also the reason why they began to reduce their holdings more than a year before the outbreak of the subprime mortgage crisis.
After all, at this rate, it is impossible to complete the reduction in holdings in a short period of time when an economic crisis is about to break out. That would be too deliberate.
And they will not reduce their holdings to a too low proportion, as that would make it easy for other institutions to take over the opportunity - except for Woaw Technology, which has Class A shares with 10 times the voting rights, they will keep their shares in other companies at a relatively safe proportion.
In this way, they can also invest the funds obtained through the reduction of holdings into the corresponding short selling of global assets. After the subprime mortgage crisis broke out, they will not only have huge profits, but will also be able to increase their holdings back to their original shareholding ratio when the stock price is at the bottom.
In fact, not only DS Holdings and those industrial investment funds, but also securities investment funds such as Mars Fund have already made plans to start reducing their holdings of some stocks. These are all done to cope with the upcoming subprime mortgage crisis.
It's just that because Mars Fund holds a wide variety of stocks, and each type of stock does not occupy a too large proportion, it does not need to be as cautious as industrial investment funds, and can start reducing its holdings in the second half of next year.
…
"I heard you were planning to buy the Bentley?"
Barron met with His Royal Highness the Prince of Wales at a private club on the outskirts of the city, and after swinging his golf club, His Royal Highness the Crown Prince asked casually.
"Yes, Your Highness, it shouldn't be long before this matter is finalized."
After taking a look, Barron hit the ball...
"That's great. I support you in doing this, Barron. Our automobile industry once had a glorious past, but unfortunately, it is now lost. If we can bring back some brands and promote them, it will be the glory of the whole of Britain."
"It's not easy to do this…"
Barron smiled and said to His Royal Highness the Crown Prince,
"Sometimes, I also need the help of the royal family."
"Oh? If we can, Barron, we will help."
In the negotiations with Volkswagen Group - although the two parties have not yet formally negotiated the acquisition agreement, in fact, this process has been ongoing, but the person they are currently dealing with is mainly Volkswagen Group's CEO Pierre-Emerick Aubrey.
Bi Ruide said that Kaiser Fund needs to increase its offer and agree to add the Dresden plant in Germany or another German plant to the acquisition list to help him gain an advantage in the board's discussions on the sale of the Bentley brand.
What Baron knew was that Bisried was likely to reach a certain compromise with Piech, which was to retain the Dresden factory - because the glass transparent factory there was mainly used to produce the Phaeton. The Phaeton was a project that Piech had insisted on launching, and although it has been losing money, this is how it is when faced with different opinions, and compromises need to be made with each other.
But Bissert still needs to reduce some of the burden on Volkswagen Group's factories in Germany by selling the Bentley brand this time, so he hopes to at least add a German car factory in this acquisition agreement. His main hope is to reduce the number of Volkswagen Group's car workers in Germany and reduce salary expenses in disguise by selling the German factory...
You know, the salaries of German auto workers can be said to be the highest in the global automotive industry - the current average salary of Chinese auto workers is often only 1/25 of that of German workers!
Wouldn't it be great to use the money from selling the factory to build a new automobile factory in China at lower personnel costs?