Chapter 178 I Didn’t Manipulate the Stock Price
"If I don't make a profit and leave, do I have to stay with you until the end of the world?"

Xie Jing Xing said confidently: "It has nothing to do with what I think, it depends on what you do. If you can go public, I will accompany you until the IPO. If you can't do it, I will find a way to make a fortune in the next round of financing and leave."

This is the end of the story. Xiao Wang is speechless. The outside world all comments that Pusi Capital’s style is toxic. In comparison, it is really a small fry.

However, he was not someone who was ambitious to create a century-old enterprise, so he simply suppressed his tentative thoughts and made an offer: "Invest 3000 million RMB in me and I will give you 20% of the equity."

Xie Jingxing bargained: "2000 million, 20% equity."

"you?"

Xiao Wang raised his eyebrows. The valuation of 1 million without a business plan was far beyond his expectations.

"I'm talking to Douyu. They were spun off from Station A's live broadcast business and received angel round TS from Alpha Animation and Culture."

Xie Jingxing explained: "I entered together with Shen Nanpeng, with a valuation of around US$1 million. The entire industry's expectations are much better than you think."

"Didn't Douyu negotiate an exclusive investment agreement with you?" Xiao Wang asked puzzledly.

Xie Jingxing disagreed: "Xiyou voted for you, and Taihe voted for them."

Sequoia led the investment with $1500 million and acquired a 15% stake, while Taihe followed with an investment of $800 million and acquired an 8% stake.

Both companies are leading investors, and their investment in the A round is almost no less than 20% by leading institutions. This investment plan can be said to be very respectful.

Although Douyu’s founding team has excellent background information and has accumulated a large number of original A-station users, they are generally considered seed players.

But Li Xueling, the YY from NetEase, is no pushover either. If Douyu is so shameless as to insist on the so-called exclusive agreement, then they should just become its rival.

ByteDance and DJI have to wait until the mid- and late-stage financing rounds before they can show off to investors, but Douyu is not qualified to do so even before it goes public.

Xiao Wang heard another meaning from Xie Jingxing's casual words - the same applies to him.

There is limited room for bargaining, and unless there is a special reason, the general framework of the investment will be set.

After briefly discussing details such as post-investment management and exit plans, he asked carefully, "How about you being a nominal co-founder?"

"Okay." Xie Jingxing agreed immediately.

Xiao Wang wanted to use their fame to generate free popularity for the platform, but he was not confident in Xiao Wang's ability.

If this guy can't hold up and is beaten by Douyu right from the start, he will have to take the lead in maintaining the industry structure, and it would be appropriate for him to remain as a co-founder as a starting point.

Xie Jingxing finally reminded: "Douyu's Chen Shaojie has an aggressive style and has burned 2000 million in two months. With the investment from us and Sequoia, he will definitely make big moves."

"It's the end of February now, and we will try to produce the product before July." Xiao Wang is not very confident.

Issues like anchors and game copyrights are easy to deal with, but the technical operations team is a bit troublesome, mainly because there is a large gap between the upper and lower limits of server and product design.

If you want to do something casually, you can just find an outsourced programmer from a technical secondary school to get it done. But if you want to make a good start and compete head-on with Douyu, which has the technical accumulation of Station A, you need to polish it carefully.

It would be easy for him to invite a few small celebrities to do the live broadcast, but interviewing programmers is really beyond the scope of his profession.

"Go to Beijing. I'll introduce you to two Internet companies. You can talk to them about technical cooperation."

Xie Jingxing pushed Zhang Yiming and Su Hua’s WeChat IDs to Xiao Wang, coughed lightly, and said, “Come closer to my ear.”

"Speak nicely!" Xiao Wang's heart tightened.

Xie Jing Xing smacked his lips and said, "Tencent's Weishi project team is going to fail. You should go there in person to show your respect to them. Only then can we form a team."

"...Isn't Brother Xiao Ma your good brother?" Xiao Wang said in a faint voice.

Xie Jing Xing said righteously, "If the project fails, the employees must have a place to go. This is to help him reduce his burden. He should thank us!"

Xiao Wang had nothing to say and gave a thumbs up, with admiration written all over his face.

Weishi just spent money on its New Year's Eve party last month, and Kuaishou has recently shown impressive data in its preparation for financing. It has been contacted by most of the top VC institutions including Tencent's strategic investment, and it is obvious that it has broad ambitions for the short video business.

Xie Jingxing talked about the other person's key project and ruined it, instigating him to rush over and poach people. His thickness of face was really impressive.

…………

On the last day of February, JD.com announced the news of its final round of financing before its listing, and Pony Ma and Xie Jingxing joined forces again.

In less than a year from Didi to JD.com, the two parties have cooperated frequently four times, and each time it was big news.

The media instigated a photo of the two of them looking at each other in a business atmosphere and spread it online. The only thing missing was to chop off a chicken's head and burn yellow paper on their behalf to create a sworn brotherly relationship.

Xiao Wang felt more and more impressed by this, and began to doubt whether it was a good idea to invite Xie to be a co-founder. He never knew he might be cheated one day.

Xie Jingxing didn't have time to play house with him. As time entered March, as the news of "Regarding the Refinancing of Listed Companies" spread, coupled with the explosion of hot money liquidity in the market, a large number of high-leverage "umbrella trusts" appeared in private capital.

The stock market gradually became restless, and Yunshan Group's split listing project became one of the first companies to go public after the relaxation of listing approval supervision.

Wogu Agricultural Machinery - Mainly engaged in agricultural machinery manufacturing and sales, seed and fertilizer manufacturing, and agricultural value-added patent research and development.

This company, which integrates all the marginal businesses of Yunshan Group, has been touted as China's first agricultural machinery manufacturing and agricultural chemical industry stock, and the most technologically advanced agricultural listed company.

The revenue share of agricultural machinery sales clearly stated in the prospectus was ignored, and the research report of the buyer's institution touted the short line of strategic development plan for the research and development of agricultural drones.

There are even malicious bastards who shouted the slogan of "Yunshan Group" for listed capital.

The company issued 1.2 million shares for the first time on the market, with an offer price of 26 yuan per share. After three consecutive daily limit increases, the market value of Wogu Agricultural Machinery exceeded billion yuan.

Xie Jingxing immediately received the leaders from the regulatory department in the Grapefruit Capital office. He answered all the questions and had a long conversation. Thousands of words were summed up in one sentence: I did not manipulate the stock price!
"From now on, we will avoid all listed companies that have any interest in Wogu Agricultural Machinery."

After seeing off the supervisory department leaders, he convened a meeting of the Xiyou Securities Market Investment Team and stressed: “In the future, our internal risk control and legal department will organize business training to strictly control the follow-up.”

“Does quantitative trading need to be adjusted?”

A thin middle-aged man with light eyebrows and a pair of half-frame glasses on his face asked.

Xie Jingxing shook his head: "Follow the rules. No matter how we try to avoid it, we have to be responsible to our customers."

Most private equity teams recruit their employees from outside the company, so the period before and after the New Year is the peak recruitment season. During this period, Grapefruit Capital is fully staffed with more than 30 employees.

First-tier venture capital market partner Tang Man and new MD He Chuan each lead a group. In the secondary market, Wang Xueqing leads two people to do active strategy securities investment, and another group is engaged in securities quantitative trading.

The risk control and compliance, legal affairs, and finance departments are all staffed, and a deputy general manager will be hired from outside to take care of these mid- and back-end businesses.

The candidate is on the way, and will switch jobs after receiving last year's year-end bonus package from his old employer.

The thin middle-aged man with glasses is Zheng Zhe, a 33-year-old young talent in the private equity fund circle in Shanghai. He originally wanted to start his own small-scale fund. Xie Jingxing asked him to lead a quantitative trading team and start with 20 billion yuan of funds.

After Zheng Zhe came in, he saw the greenhorn Wang Xueqing using 11 billion of his own funds to do short-term trading, while he took the entire quantitative trading team to move to the newly rented office and clean up.

I felt so bad that I kept slapping my thigh and saying I regretted it.

"Look, you're in a hurry."

After the meeting, Xie Jingxing pulled him into the office and comforted him with kind words: "The sales department is preparing for the first round of fundraising for Xiyou Securities Fund. The 2 billion funds promised to you will be in place next month."

"Have you contacted your LP?" Zheng Zhe was skeptical. If he hadn't contacted his LP in advance, it wouldn't have been possible so quickly.

Xie Jingxing explained in detail: "I will personally contribute 10 billion, and the remaining 10 billion will be supplemented by external LPs."

"A requirement for relative returns is the fundraising condition for this fund?" Zheng Zhe asked, turning his thoughts.

Xie Jingxing personally invested 10 billion in active strategies and quantitative trading respectively. The former was operated in the name of Xiyou's own funds, while the latter was invested in the name of a fund through multiple shells.

In short, the active strategy investment group is only responsible at the company level, and it has the final say on how to spend the money.

Quantitative trading is responsible to LPs, and the risk control process of investment operation strategies is relatively complicated.

Public fund institutions take advantage of their size and bully their customers by treating their proprietary businesses as treasures, not caring about the lives of their customers. However, private fund institutions are completely different.

Some leading private equity firms will even quietly cover the losses of their clients if their funds lose money, in order to maintain their brand reputation.

So this involves the investment strategy tendency. Should we be more stable and make relative returns, or pursue high returns and make absolute returns?
"That's a good question. Are there any peers in the market who are making absolute returns?" Xie Jingxing asked approvingly.

Zheng Zhe was slightly stunned: "In recent years, the market environment has been unstable, and everyone tends to agree that beating the market is victory."

The implication is that if the market is good, follow the crowd and make some money, and if the market is bad, lose less.

"I personally invested 10 billion yuan, which was the net profit I earned from pledging loans to trade U.S. stocks last year," Xie Jingxing revealed.

Zheng Zhe remained silent. A net profit of 10 billion meant that he had to borrow billions of principal, which was too much of a gamble.

Xie Jingxing continued to talk to himself: "Last year, I borrowed money from my friends and used leverage to invest in A-shares and made some money. After tasting the sweetness, they still wanted to invest. The remaining 1 billion shares of this fund were pooled by a few of them."

"I understand. Let's strive for absolute returns." Zheng Zhe sat up straight.

Xie Jingxing sighed: "Since I started investing in the secondary market, people have been talking about relative returns and absolute returns, but in fact, I have never seen any domestic fund do absolute returns."

"Except for the brokerage firms' proprietary trading departments, of course."

He laughed and complained: "Our absolute return strategy will offend people. Those old guys will jump out and dig up our ancestors' graves. You have to be mentally prepared."

Zheng Zhe was startled. The boundaries between the two strategies of absolute return and relative return in China are very vague, and his peers are mostly just getting by.

If we look into it more deeply, it is a conflict of interest within the industry. The market is volatile. Some funds have an annual return rate of 200%, while others have an annual return rate of 50%.

Investors vote with their feet and flock to those with high rates of return, but no one can guarantee a 200% return every year, and we must know that the rate of return is always proportional to the risk.

Therefore, there will be a situation where fund managers take the clients' money and gamble. If they win, they will get a high return rate and be very proud. If they lose, they will suffer huge losses and go bankrupt and dissolve the fund.

However, most fund managers do not want to gamble and would rather just work hard and earn steady relative returns over the long term.

Whenever a high-return fund appears in the market and is sought after by lay investors, on the other side are the majority of ordinary fund managers who are trampled and scolded by lay investors.

They can't reason with the laymen, so they have to unify their firepower and criticize fund managers who are not in line with the group and pursue absolute returns. Everyone has the right to punish them.

Over time, this has resulted in there being almost no true absolute return strategies in the country, except for brokerage firms' proprietary businesses.

Occasionally, a young and inexperienced fund manager wins a bet, and if he likes to show off publicly, the industry's senior star fund managers will inevitably take the lead.

The same is true for Grapefruit Capital.

"We didn't create this industry market environment, and the relative returns are not bad, but I prefer to let a hundred flowers bloom and try different possibilities."

Xie Jingxing's words were inexplicably idealistic: "I started to form a quantitative trading team and build our financial research institute in September last year, and it has taken a lot of effort so far."

"Now I hand it over to you. You have a long way to go, Brother Zhe."

Zheng Zhe twitched the corner of his mouth: "I'll do my best."

"Some seeds germinate in one year, bloom in two years, and bear fruit in three years. Some seeds need twenty years to germinate. Now may not be the time for fruiting, but it is definitely the time for flowering."

Xie Jingxing paused for a moment and said, "The bottom line of the return rate of the first securities fund of Grapefruit Capital this year is 200%."

"Then I'd better resign on my own initiative." Zheng Zhe shook his head and laughed.

Xie Jingxing stood up and patted him on the shoulder: "I set a 300% return rate for Wang Xueqing."

"Are you serious?" Zheng Zhe widened his eyes.

"This year is indeed the flowering period of A-shares. I will send you an active investment decision."

Xie Jingxing said sincerely: "Grapefruit's venture capital business has made a great success, and the secondary market investment cannot be bad. You two can bear the responsibility of Grapefruit's cash cow next year."

So far this year, he has spent a lot of money everywhere, and he also plans to repay the loan secured by WhatsApp shares and transfer the shares to Zhou Fenglan.

The capital flow situation is still optimistic, but it will be a bit difficult to cope with next year.

Prince Wang only knew that Tencent was in contact for a new round of financing for Kuaishou, but he didn’t know that Tencent’s blind strategic investor Peng Zhijian disliked Kuaishou’s slow data growth and wanted to go all in on his own Weishi.

On the other hand, ByteDance has developed rapidly with his help. As long as Toutiao maintains its market share and defeats Tencent and Sohu, it may rush into the short video industry at any time.

In addition, Tencent is about to acquire Qidian Chinese Network and reorganize its entertainment division. Xie Jingxing has set up a platform for film and television variety shows + game entertainment live broadcasts + short videos.

With all the business going on, the honeymoon period between him and Xiao Ma Ge is coming to an end.

Summarizing the history of the three BTA Internet giants, Baidu and Alibaba have both suffered many clear defeats in the mobile Internet era, but Tencent seems to have only lost one game in the short video industry.

Even so, they are still unwilling to give up and use WeChat, a product that they can rely on for a lifetime, to cling to Douyin and Kuaishou like a hanged ghost, ready to take a bite at any time.

Facing such an opponent, Xie Jingxing had to give him the highest respect and make arrangements a year in advance.

"Be humble and take it slow," he said to himself.

(End of this chapter)