100: Chapter 100 Huaxin Invests in Tencent!

Shen Fei did not speak immediately. After staring at Pony Ma for a moment, he opened his mouth again and said,

"It's possible for me to stay out of the social media market, but Mr. Ma must agree to this proposal."

"I'm all ears."

Seeing that Shen Fei had finally relented, the weight on Pony Ma's heart finally lifted.

"Forget about investment. Why don't you just acquire it at a valuation of 3 billion USD, and at the same time, we at Transsion will invest 1 billion USD in cash to acquire a stake in Tencent.

Considering that Mr. Ma probably can't come up with that much cash, well, we also accept a share swap. Just give us 20% of the shares, and that will be enough.

This way, we can consider it a deep partnership. We'll handle the hardware, you handle the software, and by combining them, we'll provide users with a better experience.

With this plan, I won't have to worry about Huayin Gaming Company anymore."

Shen Fei looked at Pony Ma with an expression that said, 'You're getting a huge bargain.' It wasn't that he was treating the other party like a sucker; it was genuinely the case!

Huayin Gaming Company was worth that price!

But Pony Ma pointed at Shen Fei, then pointed at himself. He wanted to take a sip of tea to forcefully suppress the anger in his heart, but Shen Fei's proposal was truly too outrageous. Before he could swallow, he spat it all out.

The secretary nearby hurriedly helped him wipe it up...

"Mr. Shen, let's not talk about what that shell is worth for a moment. Do you know what Tencent's current market capitalization is?"

"I haven't really looked, but as you said, it's already the third-largest internet company in the world, so it should be worth quite a bit now, right?"

"Around 250 billion HKD. A 5% stake is worth at least 1.5 billion USD at market price.

And that's just the market price. To acquire that much, you'd need a premium of at least 1.7 billion USD." At this point, Pony Ma's anger had subsided a bit. "1 billion USD won't buy it. You're basically offering a 50% discount."

"I know." Shen Fei didn't play dumb and said straightforwardly, "But some things cannot be bought at market price."

He pushed the teacup in front of him forward an inch, leaving it only a step away from Pony Ma's teacup.

"Mr. Ma, aren't you worried that I'll dump this 1 billion USD into the social media market? Since you're aware that I'm the capital behind those three companies, it means we've already validated the market's development.

Tencent isn't there, but there are other international social media platforms. I spent less than 100 million USD on those companies, and now they've grown tenfold..."

He suddenly leaned in closer to Pony Ma, delivering another blow: "But Transsion's domestic users have already exceeded 3 million. After the Honor is released, this number will reach at least 7 million, or even 10 million...

Many of these users are connecting to the internet for the first time, registering accounts for the first time, and using a Smartphone for the first time... They aren't in QQ's pool..."

Pony Ma didn't respond. This was his biggest concern and the reason he wanted to stop it most.

"If you agree now, you're using 20% of the shares to buy my promise not to enter the market." Shen Fei's words were light, but they made Pony Ma across from him feel immense pressure. "Doesn't that look like a great deal?"

He pressed his hand onto the terms document.

"20% of the shares in exchange for my commitment, and at the same time, Transsion's traffic gateways will be opened to all Tencent-affiliated applications. When that happens, our 1+1 will be greater than 2, and we can completely crush those new challengers."

He looked at Pony Ma: "Instead of defending, it's better to buy an ally with shared interests to jointly crush other challengers.

Mr. Ma, this is business."

...

Pony Ma was silent for a long time.

He remembered in 2005, when Microsoft proposed to acquire Tencent, offering 800 million USD.

Pony Ma didn't sell, not because the price wasn't enough, but because he knew what he held in his hands: the virtual identities of hundreds of millions of Chinese netizens for the future.

Of course, the main reason was also that the authorities wouldn't let him sell...

But fortunately, because of his persistence, Tencent's market value exceeded 200 billion HKD this year. This wasn't the ceiling, but a new starting point.

But now, Shen Fei had directly slashed this valuation by more than half.

And he asked for 20% right off the bat...

But another reality was placed before him: the mobile internet landscape was being reshuffled, and mobile phone manufacturers were rapidly becoming the new traffic gateways.

Apple had its own Apple Store, Google had its own Google Play, and Transsion had its own Taishan Mall...

Hardware manufacturers were becoming distribution channels.

And channels were beginning to force content to adapt.

"1 billion USD, 20% of the shares." Pony Ma repeated these numbers. In his view, that Huayin Gaming Company, those three games might be very profitable, but their lifespan wasn't that long...

They were simply not worth 3 billion USD!

"Mr. Shen, you are betting that Tencent will always stand at the center of the table."

"No!" Shen Fei shook his head. "I'm betting that I will always stand at the center of the table, and that you, Mr. Ma, will make the right choice."

This was the first time Shen Fei showed a genuine smile during this round of negotiations.

"Just like you rejected Microsoft a few years ago."

...

Pony Ma suddenly smiled too.

"3 billion USD in funding," he said, "20% of the shares. At the same time, I want homepage recommendation slots on all Transsion product lines. Plus a 50% discount for pre-installed software, and a 30% discount for Huawei... for a period of three years.

As for Huayin Gaming Company, forget about that shell asset. If I value it at 3 billion, I won't be able to explain it to the shareholders, nor will I be able to convince them."

"1.8 billion. The multinational operating rights for angry birds will be handed over to you, and other games will be promoted as a priority..."

"Mr. Shen, I have already conceded a great deal of interest. If there's too little meat on the bone, I won't be able to convince those shareholders to give up this 20% stake.

At least 2.5 billion..."

"angry birds isn't that cheap, and it's a series..."

After a bit of back-and-forth, the funding was settled at 2.3 billion USD, and Huayin Gaming Company would remain with Huaxin Investment.

However, Tencent would have priority in porting subsequent games developed by PopCap... The operating rights for the upcoming angry birds would go directly to Tencent, with the specific revenue-sharing ratio based on market standards.

The signing ceremony was finally set for a week later.

Although it wasn't clear how Pony Ma convinced the other shareholders, Huaxin Investment did indeed receive 20% of the shares.

As soon as the contract was about to be signed, Tencent officially released an announcement and applied to the Hong Kong Stock Exchange for a trading suspension!

Many retail investors rubbed their eyes in disbelief when they saw the announcement of Tencent's trading suspension. It was falling yesterday, and today it was suspended directly...

This wasn't right!

"What does this mean? I didn't manage to run away yesterday, how come it's suspended?"

"It dropped 3% all of a sudden yesterday. I couldn't bear to sell, so I actually increased my position a little."

"To the person above, is it really just a little?

Better find a nice burial spot before trading resumes; there might not be any left later."

"A major shareholder has entered..."

Many novices still didn't understand what was going on.

If a major shareholder enters, shouldn't it hit the daily limit? How is this possible... Until someone reminded them to go check the suspension announcement.

Soon they saw the announcement on Tencent's official website and the Hong Kong Stock Exchange's website, but they were soon stunned.

Tencent Technology Group Co., Ltd.

Announcement on Trading Suspension Regarding Major Strategic Investment and Shareholding Changes...

After seeing the specific content inside, they couldn't laugh anymore.