Chapter 416 Will Usher in the Most Glorious Moment After Rebirth!
At the beginning of July, under the arrangement of Morgan Stanley, Li Xiaofan took the management team of Pacific Network Technology Company to the United States for a pre-IPO roadshow. When the US stock market performed strongly, the price of Yahoo shares he held had actually exceeded the $100 mark.
The stock prices of other Internet companies such as AOL and Netscape also rose sharply.
Mary Meeker's team explained to Li Xiaofan that a large part of the contribution came from American families. This year, in the first quarter of 1996 alone, American families invested $100 billion in mutual funds, and this number is maintaining a high growth trend. Six years ago, in 1990, mutual funds could only raise $12 billion in a whole year.
A trend among investors in the US stock market at present is that there are fewer and fewer individual stock investors, and mutual funds have become one of the investment and financial management methods and tools for the American people, and have also become the main way for the American people to achieve asset allocation through pension savings investment.
Li Xiaofan saw a data before his rebirth. At that time, the total assets of global open-end funds were about 40 trillion US dollars, and the scale of US market funds, including mutual funds and ETFs, reached nearly 20 trillion US dollars, accounting for about half, and was in an absolute leading position in the world.
So now, since so much money has been invested in the US stock market, it is not surprising that stock prices have risen.
From the beginning of 1995 last year to the end of June 1996 this year, the Dow Jones Industrial Average climbed from more than 3,800 points to around 5,700 points, a full increase of 45%.
At the same time, the Nasdaq index rose by about 65%, from 750 points to 1,250 points!
As soon as Li Xiaofan's team arrived at Morgan Stanley's headquarters in New York, Mary Meeker smiled and said to Li Xiaofan in the conference room: "Li, congratulations, you are now catching up with the best time of the US Wall Street capital market!"
"Mary, thank you for your team's hard work!"
After the meeting with Mary Meeker's team, Li Xiaofan and his team visited Mary Meeker's supervisor Frank Quattrone at Morgan Stanley's headquarters.
Frank Quattrone was once known as the "Prince of Silicon Valley". He personally promoted the listing of a number of well-known technology giants such as Cisco, Intuit and Netscape. In his previous life, Frank Quattrone founded the investment bank Quatalyst after leaving Morgan Stanley. The most famous deal was the acquisition of LinkedIn by Microsoft for a sky-high price of US$28.1 billion in 2016...
Afterwards, Li Xiaofan and his team also visited Barton Biggs, chairman of Morgan Stanley Asset Management, and Byron Wien, chief investment strategist of Morgan Stanley. Both of them were over 60 years old, with white hair and thin faces, and their clothing taste seemed to have stopped at the Eisenhower administration.
During his stay at the Morgan Stanley headquarters, Li Xiaofan found something very interesting:
At present, after the sharp rise of the US stock index, Wall Street has launched a fierce debate to explore whether a speculative bubble is emerging in the Internet stock field and even the entire stock market? The two factions have very different views.
Within Morgan Stanley, there are also two factions on this debate:
Barton Biggs and Byron Wayne are typical skeptical elders. These traditionalists believe that stock prices have already risen to a level that the economic fundamentals cannot support.
As enthusiastic supporters of the new economy, Mary Meeker and her supervisor Frank Quattron believe that traditional stock valuation methods have become ineffective and should be thrown aside. Wall Street should enthusiastically embrace the emerging new era of the Internet economy and adopt a new valuation method for Internet stocks!
At the beginning of this year, Byron Wayne predicted that the Dow Jones Industrial Average would drop by 1,000 points, while Barton Biggs even suggested that investors should reduce their holdings of US stocks.
But as soon as they finished speaking, the Dow Jones Industrial Average climbed another 500 points in the next two months! The slapped-in-the-face Byron Wayne and Barton Biggs refused to change their views.
In their emails to customers, the two stubborn old men, Byron Wayne and Barton Biggs, still insisted on their views: I believe that the US stock market is overheated and it is easy to suffer a cyclical bear market! The longer the madness in the United States lasts, the higher the price we will pay!
They believe that the current rise in technology stocks such as Microsoft, Dell and Intel is irrational behavior in their view, and the rise in Netscape, Yahoo, Excite and other Internet stocks is completely incomprehensible to them!
Li Xiaofan found that the current Morgan Stanley corporate culture is very open and free.
Byron Wayne and Barton Biggs, Mary Meeker and Frank Quattrone, these four people work in the same company and can express completely different opinions.
In the latest investment manual issued by Morgan Stanley, Li Xiaofan can see Barton Biggs's gloomy US stock market outlook and Byron Wayne's warning to exercise restraint in technology and Internet stocks, as well as Mary Meeker and Frank Quattrone's recommendations for buying Internet new economy stocks such as Netscape, Yahoo and AOL...
Although Byron Wayne and Barton Biggs have much higher ranks and qualifications within Morgan Stanley than the young Mary Meeker and Frank Quattrone, the actual performance of the US capital market has allowed Mary Meeker and Frank Quattrone to shine and gain a lot of say within the company.
In the second quarter of 1996 alone, Wall Street investment banks earned $3 billion in stock issuance fees. As one of the most important stock listing underwriters in the United States, Morgan Stanley also made a lot of money in this bull market!
Of course, Li Xiaofan is also one of the biggest beneficiaries of this bull market on Wall Street.
After the hard road show across the United States, Mary Meeker told Li Xiaofan's team a good news: investment institutions interested in subscribing to the Pacific Online Bookstore project are very enthusiastic!
The IPO issuance plan recommended by Mary Meeker's team is: the Pacific Online Bookstore project will publicly issue 25% of its shares at a valuation of $400 million and raise $100 million. The total share capital of Singapore Pacific Network Technology Co., Ltd. is 20 million shares, which means the proposed issue price is US$20...
Afterwards, Li Xiaofan presided over the board of directors and all shareholders meeting of Singapore Pacific Network Technology Co., Ltd., and everyone collectively voted to approve the IPO issuance proposal of the lead underwriter Morgan Stanley.
According to Morgan Stanley's plan, after the company's official IPO in August, the new shareholder composition ratio of Singapore Pacific Network Technology Co., Ltd. will change to:
Singapore Yifan Holdings Pte. Ltd. holds 30% of the shares, Longmeng Investment and Longyue Investment hold 7.5% of the shares, Singapore GIC Special Investment Company holds 7.5% of the shares, Singapore Yifan No. 1 Venture Capital Fund holds 7.5% of the shares, the United States Draper Fisher Jurvetson holds 7.5% of the shares, IDG holds 3.75% of the shares, two partnerships consisting of company executives and all employees hold 7.5% of the shares, Malaysia Hong Leong Company holds 2.25% of the shares, Malaysia Guanghui Company holds 1.5% of the shares, and the public shares 25% of the shares.
Then, according to Li Xiaofan's suggestion, the lead underwriter Morgan Stanley communicated with the Nasdaq Stock Exchange and determined that the official listing date of Pacific Network Technology's IPO would be Thursday, August 8, 1996.
August 8 was another exciting day for Li Xiaofan. The company he created would soon be listed on the Nasdaq in the United States, and he would usher in the most glorious moment after his rebirth!