After returning to China, Zhang Yida immediately arranged for the family office's private legal consultant to verify all contracts that he needed to sign.
At present, he personally does not hold any shares in the two companies, they are all held by BVI Cayman Islands offshore companies.
For such a large transaction, Zhang Yida was also very cautious. He found three lawyers and conducted cross-examination.
After confirming that all agreements were correct, Zhang Yida put his name on the contract.
Zhang Yida originally held 58.64% of the shares of Zhonghe Group, but he only took 1% of the 1.36% shares that he won in the bet, and the total shareholding ratio increased to 59.64%.
The other 0.36% was allocated to company executives such as Lu Qi and Zhang Lan.
These are real equity shares, not options. Although they are valuable, the management's efforts are worthy of this treatment.
Especially Zhang Lan, she was responsible for the commercialization of DouYu, and it was later handed over to Su Hua. She played a major role in winning the bet.
On Ruixiang's side, Zhang Yida holds 34.36% of the shares, which has remained unchanged since the completion of the US$6.666 billion Series E financing last year.
According to the 1:1 share exchange method, Zhang Yida will hold 47% of the equity of the merged "Xinruixiang" Group.
In addition, last year, Zhang Yida increased his investment in Zhonghe Group by US$1.2 billion, and this part of the equity was held in the name of a family trust.
This was also done deliberately by Zhang Yida. Gradually, he began to divide his personal property and family property, and built more caves to hide his property.
After subsequent rounds of financing dilution, the family trust still holds 1.88% of the equity of Zhonghe Group, which will be converted into 0.94% of the equity of Xinrui Xiang Group.
Ruixiang Industrial Investment Fund Phase III holds a 3.12% stake in Zhonghe Group, which will be converted into a 1.56% stake in Xinruixiang Group.
This fund is also a special existence. The original shareholders of Ruixiang hold one-fifth of the 1.56% equity.
In addition, 20% of the fund's investment return, as fund management fees, also belongs to Ruixiang's original shareholders.
After the five-year lock-in period of the fund is up, this part of the equity will be distributed to the original Ruixiang shareholders in the form of dividends, currency or equity shares when exiting, and has nothing to do with the shareholders of Zhonghe Group.
A rough calculation shows that in this fund, Zhang Yida can get at least 0.1% of the equity of Xinruixiang Group.
Zhang Yida's equity is divided into three holding platforms, Cayman Company, Family Trust, and Ruixiang Phase III Industrial Fund.
The valuation of Xinruixiang Group, based on the latest round of financing information of the two companies, is:
666.66+642 equals 130.866 billion US dollars!
According to the exchange rate of 1 U.S. dollar to 6.4586 yuan in June, converted into RMB, it is 845.2 billion yuan.
However, this figure is obviously too conservative. Zhang Yida put forward his own suggestion: announce to the public that the valuation of Xinrui Xiang Group is US$160 billion, equivalent to RMB 1.0334 billion!
Based on the combined annual revenue of the two companies of 95 billion yuan, the price-to-sales ratio has actually reached 10.9 times, which is higher than both Penguin and Ali.
However, investors present felt that this valuation was not high and even conservative.
"If you ask me, just announce the valuation of US$200 billion and give some big news to the media and netizens." Tong Shihao, as an activist, was the first to suggest.
When Zhang Yida signed and the process was completed, the focus of a group of investors returned to valuation.
The valuations of Ruixiang and Zhonghe have never been discussed. According to the 1:1 share exchange method, the valuations of the two companies are the same.
Whether it is more than 60 billion US dollars or 100 billion US dollars, it does not affect everyone's equity ratio.
However, in terms of external publicity, investors have expressed their own different opinions.
Gan Renping also agreed with Tong Shihao's point of view. He said: "The representative of GGV is right. Valuation does not necessarily refer to the actual value of the company now, but also includes part of its expectations for the future.
Xinruixiang Group is now the only company in China that can challenge Ali and Penguin in all aspects. We must build momentum!
We need to let the outside world have confidence in us and feel that the gap between us and their two companies is not unbridgeable."
"Isn't Ruixiang planning to acquire an equity stake in that e-commerce company in Southeast Asia? If we raise the valuation higher, our subsequent shareholding ratio can be less diluted."
Xu Xiaoming said with a smile, he also made a small calculation.
"What a great idea, I totally agree with it!"
"Teacher Xu still has a way, this is what we have to do!"
"I heard that the e-commerce company in Southeast Asia is valued at US$5 billion. If you ask me, the bubble is a bit big. It's appropriate for us to increase our own value appropriately!"
…
Zhang Yida felt that he still underestimated the shamelessness of these capitalists, but as the biggest profiteer, he was still very tempted by this plan.
“To make the valuation stand up to scrutiny, we might as well conduct another round of financing to push the post-investment valuation of the new venture to US$200 billion in one fell swoop!”
Hearing what Zhang Yida said, the investors who were in high spirits and discussing happily suddenly became quiet.
Those who looked at the table looked at the table, and those who looked at the ceiling looked at the ceiling... The scene was extremely embarrassing!
It doesn't matter how much you brag about your paper wealth, but if you really have to pay for it yourself, investors will inevitably retreat.
"The valuation was pushed too high all at once, which is not conducive to subsequent financing!" Shen Beipeng expressed his thoughts concisely and comprehensively.
"Yes, how about a valuation of US$160 billion? I think that's pretty good."
"Well, 160 billion US dollars is quite a lot. It has firmly established itself as the third largest Internet company in China and the eighth largest technology company in the world!"
"Yes, after all, we haven't listed on the market yet. The valuation is too high and it is easy to be criticized."
…
The selfish side of capital has emerged again. It only wants to defraud others to make profits, but it does not want to pay for itself, or it wants others to pay.
Zhang Yida is no longer a rookie, and his thoughts on this group of people could not be clearer.
He waved his hands and said, "Don't argue, everyone. We will conduct another round of Pre-IPO financing. All our shareholders will increase their capital in proportion to their equity. No one will suffer, and all the meat will rot in the pot."
Bao Zheyu thought, "What is the financing amount?"
Zhang Yida thought for a while and decided that the amount should not be set too high. He really couldn't afford it.
The US$1.2 billion that he gritted his teeth to increase capital last year basically spent less than half of the funds he had to cash out various equity interests.
The cash at his disposal now comes from the cash out of equity in three companies, Yimin Wangjin, Yimin Wealth, and Yimin Dai, as well as the sale of all equity interests in Huimin Travel, Green, and OYO Hotels.
These six companies brought him a total of US$4.3 billion in cash after paying taxes or avoiding taxes.
Of this money, Zhonghe Group spent 1.55 billion US dollars just on Doudou and Douduo.
In addition, the acquisition of the Blue Hole, the purchase of private jets, the luxury mansion Li Palace, and the loan of 300 million euros to Li Yonghong...all in total cost another US$1.45 billion.
He now only has 1.3 billion US dollars in cash on hand, and it is impossible to invest most of it in the company's operations.
Not only is it about diversifying investment risks, the most important thing is that the return on investment is no longer very high.
Investing US$200 billion in shares, if you want to double the return on investment, you have to at least be like Penguin or Ahri, and we don’t know how long it will take.
"One billion US dollars, I personally will lead the investment of 470 million US dollars!"
After some thinking, Zhang Yida quickly made a decision.
"Is the amount too small?" Shen Beipeng asked with a frown.
"After the merger, Xinrui Xiang Group has more than 14 billion US dollars in cash reserves on its books. Is it necessary to carry out large-scale financing?"
Hearing what Zhang Yida said, other investors also made up their minds and began to speak out in favor of this capital increase plan.
In addition to Zhang Yida and the management, the merged Xinruixiang Group also has forty or fifty institutional investment shareholders.
If an institution invests several million dollars or tens of millions of dollars, it can put together the remaining more than 500 million dollars. It is not too difficult.
The benefits of doing this are also obvious. First, it will push the company's valuation to 200 billion US dollars, and at the same time, it can take advantage of the subsequent equity acquisition.
As for whether it is worth US$200 billion, with financing information and endorsements from forty or fifty world-renowned investment institutions, it can be said to be black or white.