Chapter 343: USC Speech (Bonus for Alliance Leader

The average temperature in Champaign in early April is around 10 degrees Celsius.

This was also the first stop for the film crew.

The temperature was a bit chilly; just as a scene wrapped, Zhang Chunru busied herself draping a thin coat over the young girl in the green dress.

Liu Yifei smiled like a flower: "Thank you! Sister Chunru."

Today was the final scene in Champaign.

The following will be a full reconstruction of the path Zhang Chunru took from a Chinese-American girl in Champaign to becoming a patriotic female writer who wrote books and established theories for history.

Liu Yifei was very excited because this was a path she had walked herself over the course of three months.

Every night, tossing and turning in bed, her mind was filled with the sensations she had experienced in depth a year ago.

She hardly needed to review or rehearse the performance details and action designs written and drawn in her notes; she could render them instantaneously like an Impressionist master.

These two months were the final few steps of her ascent toward the next dimension of her acting career.

Even in the handling of certain details, like that fragment of textbook material from the Beijing Film Academy, she could already faintly touch the pulse of a top-tier actor.

"Cut! Let's stop here for today."

After filming ended, Boss Lu called over the local North American production assistant.

"How is it outside today?"

"There are protesters of Asian descent from unknown sources, but there are also Chinese people from Champaign who have spontaneously come to drive them away."

"Heh, good. Help me contact the organizers of these Chinese community groups; the crew has some small gifts to give them before we leave."

"Understood, Director Lu."

Just as Boss Lu had told Liu Yifei before, once you leave your own country, it is a "foreign land" fraught with danger.

The constant clamor of pro-Japanese media in North America, and the slanders and smears from university professors and commentators bought off by the right wing.

There was also constant intimidation and harassment that hovered on the edge of legal boundaries.

This included, but was not limited to, spray-painting the crew's vehicles, obstructing the crew's meals, and creating high-intensity noise outside the filming locations to disrupt production.

But soldiers are met with soldiers, and water is met with earth.

Everything was dealt with one by one by the measures arranged by the young director who had prepared in advance.

These ugly faces were also recorded by Zhao Fei using the lens of a world-class photographer.

At the appropriate time, Liu Yifei's millions of Chinese fans on Mytube would naturally see this vlog.

8:00 PM, downtown Champaign, Hilton Garden Inn.

Besides Lu Kuan, Anna Huang and the big short-seller Paulson were also sitting in the luxury suite.

Paulson did know Anna Huang's identity; this former senior Chinese-American legal counsel at Google had a distinguished reputation in the industry.

In the future, Anna Huang would rise to the position of Vice President and General Counsel at Google.

After leaving Google in 2012, she joined Twitter to serve as General Counsel.

In May 2013, she was appointed by Obama as the White House's first Chief Privacy Officer, focusing on internet and privacy policy.

Obama knew well the horror of being monitored and wiretapped, so he sought out this female lawyer who had long served at internet companies to tailor a privacy strategy for him.

However, Anna Huang did not quite know Paulson's role, even though she recognized that he was a famous big short-seller on Wall Street and was currently riding a wave of popularity.

"Sir..." Paulson hesitated.

Boss Lu laughed: "Speak freely. Anna is the president of the North American company for Wenjie, coordinating surface-level affairs; she is my right-hand woman!"

Paulson nodded: "Currently, based on the equity structure of Blockbuster and Netflix, I still strongly suggest taking Blockbuster first."

Anna Huang was shocked to hear this!

She only knew that her boss intended to intervene in the North American DVD rental industry, but now it sounded like...

It sounded like he intended to unify the whole world?

This Chinese-American female lawyer felt gratified to have earned his trust, but Boss Lu's "speak freely" was limited to the strategy regarding Netflix and Blockbuster over the past half-year.

Even Liu Yifei did not yet know about the CDS fund, which had already risen by 480%.

The future Paulson would achieve a 600% return in 2007, the best in the United States, and he was currently in the state of being halfway through a hundred-mile journey.

"Anna, how is Blockbuster's current operating situation?"

Anna Huang came back to her senses.

Under Boss Lu's instructions, she had previously coordinated with Liu Yifei's investment in Netflix, acquiring 15% of the equity from Carl Icahn, the Wolf of Wall Street.

"It's going from bad to worse." Anna Huang used numbers to prove her conclusion: "Nearly half of the stores across the U.S. have closed, and the layoffs have already drawn the attention of the Department of Labor and the Bureau of Labor Statistics."

"Protests by employees have already appeared in states like North Carolina and Virginia; the situation is not good."

"The most critical thing is..." She flipped through the documents in front of her: "At last week's board meeting, Antioco resigned because his high bonus of 7.6 million dollars was refused."

The mastermind behind the scenes blew a smoke ring and smiled with satisfaction.

As mentioned earlier, the pressure on the acquisition of Blockbuster lay in the fact that its stores were a huge debt burden.

Before truly taking control, Wenjie's core strategy was to use Netflix's hand to beat it into a state of total collapse.

But there was a small obstacle in this, which was this Blockbuster CEO, Antioco.

During his confrontation with Netflix, he proposed a cross-platform strategy, which was to introduce offline traffic to the online side, causing Netflix's pure online advantage to stall.

If the situation were left to develop, Blockbuster might have been able to linger on for a while longer in the short term.

It is a pity that the vision of capital is short-sighted.

Just like in the future, Blockbuster's board of directors passed a unanimous resolution to refuse Antioco's high bonus and used public opinion pressure to force his resignation.

Of course, Anna Huang, who had already become one of Blockbuster's shareholders, had done her fair share of networking.

Antioco to Blockbuster was, for Boss Lu, like Yuan Chonghuan to the Great Ming; he absolutely could not be kept!

Dismiss him first, and when he takes charge of Blockbuster again, then give him clothes to wear and food to eat, and recruit him back under one's banner.

The three sipped their coffee; the current situation was now very clear.

Following the previous line of thought, let Paulson's professional team use offshore companies to absorb shares through the secondary market and block trades by institutional investors, and then simply make a tender offer.

No one would be interested in this pile of trash now.

After months of planning, it could be said to be a very cost-effective acquisition; the rest was merely dealing with the reviews of the foreign committee and the Department of Justice.

However, this conspirator from the East seemed to have a new idea.

"Anna, Paulson, I'll propose a plan."

"The day after tomorrow, I'm going to USC to donate and give a speech. This is to build momentum for the acquisition of Blockbuster. I will invite many Hollywood stars, directors, and practitioners who graduated from USC."

"I can reveal two pieces of information in the speech."

"First, I have already invested in Blockbuster and am preparing to acquire it."

"Second, I want to declare in front of the entire U.S. media and film industry that I am bullish on streaming media; this is the core strategy for Blockbuster's future!"

Paulson didn't understand this industry too well and was still savoring the meaning between his words.

But Anna Huang had already frowned: "Boss Lu, doesn't this expose our true goal?"

"Hastings is already bullish on streaming media. If he knows that Blockbuster will be taken over by someone who is also bullish on streaming media—and a successful internet entrepreneur and film director like you—he..."

The senior Chinese-American lawyer's analysis came to an abrupt halt.

Two gasps came from the room!

"Netflix?"

"Netflix!"

Anna Huang and Paulson exclaimed at the same time!

Paulson suddenly realized: "Lu, you want to lure Hastings out of his hole!"

"Exactly!"

Boss Lu set down his coffee cup lightly: "Netflix's Hastings is extremely aggressive, has absolute control over the company, and has never given up his ambition for streaming media."

"If we want to secure our position in the North American DVD channel, Netflix is a hurdle that cannot be crossed; we will have to deal with them sooner or later."

"Either defeat it in the marketplace or directly pull the rug out from under it with a hostile takeover."

The young director laid out his plan: "I want to throw out bait at USC to see if Hastings will react."

"If he sees the crisis and attempts to use funds to intercept the dying Blockbuster, we can launch a surprise attack on Netflix while they are in chaos!"

Paulson's expression was grave: "Netflix's equity structure is AB-type; Hastings owns as much as 97% of the voting rights."

"If our hostile takeover is detected, as long as he calls a shareholders' meeting, whether it's a White Knight, a Golden Parachute, or a Poison Pill, they will all make us pay a price."

These three methods are common strategies for dealing with anti-takeovers.

A White Knight means introducing friendly capital to hold shares and maintain overall controlling status.

A Golden Parachute restricts the hostile acquirer, prohibiting them from dismissing management or requiring ten or twenty times the compensation to do so.

Mergers and acquisitions are industry reshuffles and personnel purges, which would undoubtedly increase the acquirer's costs.

The Poison Pill was mentioned earlier and will not be repeated.

Lu Kuan laughed: "If I have an affiliate now that holds 14% of Netflix's stock, would that be of any help?"

"What?" Paulson felt a bit creeped out.

"Don't be surprised. I have an affiliate, Chinese-American capital, that injected 300 million last year and got Netflix stock. This is also the reason why Netflix has been able to strike at Blockbuster unscrupulously for the past half-year; they have sufficient ammunition."

Paulson nodded: "There is a certain chance, but I am not very confident about how to bypass the acting-in-concert agreement."

Boss Lu sneered inwardly, thinking to himself: You don't have it, but I do.

Boss Lu smiled indifferently: "Let's try it. In any case, we have to let this old fox take the bait first."

"Hastings is an outstanding entrepreneur and is also a director at Microsoft. Microsoft's current CEO Ballmer is very bullish on him; he is not so easily defeated."

This is a tycoon who, in the future, would make Netflix's market value the highest in the world for media and entertainment. For such an opponent, no amount of caution is too much.

Anna Huang asked for instructions: "If Netflix and Hastings don't take the bait, should we still follow the plan..."

"Let's proceed with the acquisition of Blockbuster as planned; at worst, we'll just have to fight them head-on, and it's not like we don't have the advantage."

The schemer smiled cunningly: "Anna, contact this Antioch in advance; perhaps he will be looking for new employment soon."

"Yes, boss."

——

As planned, Wenjie quickly created a buzz among North American media, claiming an interest in taking over the dying Blockbuster, and was the first to start spreading the word.

For a time, there were countless jokes.

Most were from high-and-mighty Wall Street analysts, mocking this young Chinese man with deep pockets for being like a frog in a well, having never fought a wealthy war or lived a wealthy life.

To have a perfectly good Twitter and sell it to others, only to now think about picking up scraps to beg for food.

If there were still a few people in the industry who could smell something wrong in all this, Hastings was clearly one of them.

A secretary knocked and entered: "Sir, this is the invitation."

"Is it from that Eastern director?"

"Yes, tomorrow at USC. Disney CEO Iger, Miramax's Harvey, and some Hollywood stars and directors will all be in attendance."

He had never seen Hastings take the initiative to attend this kind of event; usually, he would not show up even when invited.

He must be interested in the "potential new owner" of his old rival, right?

U.S. East Coast time, April 20, 2007, 10:00 AM, University of California, Los Angeles.

After shaking hands and exchanging pleasantries with a crowd of industry insiders, Hastings sat in his seat and looked back around the film school auditorium, which was already packed.

A handsome and elegant young director walked onto the podium, and the students from USC and the local UCLA offered crazy applause and cheers, which shocked Hastings.

This Eastern director already had such popularity in North America?

All along, Boss Lu had been crafting his persona in North America as a citizen of the world.

Because this was beneficial to his subsequent business planning.

From the widespread fame starting with *Whiplash* to the massive hit *Elysium*, which directly defeated his compatriot Jackie Chan and made him famous.

Following that, his wit and humor at several Golden Globe and Oscar ceremonies, which differed from the casual and indifferent nature of typical major Chinese directors, left a deep impression on North American fans and industry insiders.

By the time the myth of the Mytube sale was born, this foreign creator of the modern "American Dream" was already widely recognized and accepted by the North American film and internet circles.

In 2006, *Newsweek* conducted a survey to vote for the most well-known Chinese faces in North America.

The top three were Jackie Chan, Lu Kuan, and Yao Ming, and Liu Yifei was also on the list in the top ten.

Others included the famous director Li An, actress Gong Li, U.S. Secretary of Labor Elaine Chao, designer Lin Ying, and cellist Yo-Yo Ma.

Clearly, after today, this young director's acceptance in the North American film industry would be even higher.

This was Hastings' judgment based on the current situation on stage——

USC President Steven, and George Lucas, who graduated from USC, shook hands with Lu Kuan on stage.

Subsequently, Steven and Boss Lu held up a $50 million donation certificate together, accepting the clicking sounds of inspection by the long guns and short cannons of the press.

Steven held the microphone; unlike the exuberant desire for expression of domestic school leaders, he was relatively concise: "Thanks to Director Lu Kuan from China, this is a great gift to the art of film. Now, please have him speak!"

Those who could come to the scene today, besides those there to support Boss Lu's connections, were basically all his fans.

The applause in the venue was thunderous in an instant.

Boss Lu took the microphone gracefully and walked to the podium.

For this former PR company boss, crafting his persona in North America was an important proposition.

With his various previous films, especially the massive hit *Elysium*, he was an artist and a filmmaker.

With the successful startup and sale of Mytube, and his participation in the most popular talk show in the U.S., *Larry King Live*, he was an internet entrepreneur.

And there was his wit and humor at the Oscar ceremonies, and his close association with old white men like Quentin and Harvey.

None of it failed to broadcast his subtext to all walks of life in North America:

I "yearn" for this hot land, I hope to integrate with you, I am a citizen of the world!

Please do not have doubts or precautions regarding my corporate operations and industrial mergers.

Like your Secretary of Labor Elaine Chao and Yahoo CEO Jerry Yang, I am a firm supporter of the American Dream!

It was nothing more than the disguise of an Eastern schemer.

But the North American people fell for this act!

Including today, at this moment, this Chinese director who spoke fluent American English started off by showing off some American humor.

"Yesterday I called Steven and asked if Mr. George Lucas had a cold recently and couldn't come to the event."

"Steven said no problem, he would definitely come to show his support! After all, he donated $175 million to the school this year and is our honorary trustee."

Boss Lu looked at the USC president with some resentment: "Steven, you still don't understand the subtlety of Easterners."

"I only donated $50 million, and Mr. George Lucas donated $175 million. Do you think he is a suitable guest?"

The audience burst into laughter instantly!

Steven and George Lucas on stage both made shrugging gestures.

Quentin in the front row put his fingers in his mouth and let out two wolf whistles.

He liked Boss Lu's humor and madness.

The only regret was that he hadn't gone out to party and run wild with this bunch of fox friends and dog companions in a long time.

"Alright, just a joke."

"Mr. George Lucas is a filmmaker I respect very much; he built a magnificent and vast worldview from nothing and promoted the revolution and application of special effects technology."

"And this is also the original intention of my donation to USC this time."

"After communicating with the school, this fund will be used for the Butian Pictures team and the USC School of Cinematic Arts to cooperate in the research and development of motion capture, 3D modeling, 4K HDR equipment, and other directions."

In other words, this money was earmarked for USC's research and application in special effects technology, and the resulting achievements and patents would be shared by Butian Pictures, the school, and the academic team.

This was the same cooperation method as George Lucas's donation, except the latter also donated a teaching building named after him.

A thief never leaves empty-handed; even when building a persona and doing PR, Boss Lu would not treat himself poorly.

This was the same as hiring top foreign special effects teams when making *Elysium*; it was all spending money to buy technology.

After a round of applause, Boss Lu continued to talk freely.

"Last year, I gave a lecture at a domestic university and told my domestic colleagues that Hollywood is not only a commercial rival but also an object for dissection."

"The concept of Hollywood's film industrialization is worth thinking about and practicing by every individual in the domestic industry and industrial chain."

Everyone in the audience nodded; Hollywood appeared as a dumper globally, so it was perfectly normal to be studied and caught up with as a rival.

These power players in the North American film industry should be even happier to hear this; after all, in their eyes, this was praise from a chaser and an imitator.

"As a film director who has worked and started businesses in both China and the U.S., and also as a bridge for Sino-US film cultural exchange, I talk about North American film when I'm in China, but today in North America, I want to talk about the opportunities in China."

"Everyone might know that Wenjie and Disney established a slate deal last year, and our first superhero film adapted from Marvel will be released in 2008. Besides that, we have many cooperation projects for independent film distribution."

"Thanks to Mr. Iger's excellent business vision, seeing the greatness and vastness of the Eastern market, and promoting the deep cooperation between Wenjie and Disney under the conditions of global economic integration."

"Recently, my Wenjie company in North America is also preparing to enter Blockbuster to explore online streaming business."

Boss Lu's eyes swept over Hastings, whose expression had changed suddenly in the front row, as if he were just narrating a trivial matter, and he continued to provide data.

"Regarding the Chinese market, I will list a few numbers for everyone's information."

"In 2002, China's box office was about $160 million; last year, that number was around $480 million, three times in four years."

"In the first half of 2007, the domestic box office figure has already exceeded the entire total of last year; this year, a conservative estimate is over $750 million. This is a terrifying growth rate."

Boss Lu paused: "Just like the 'China Threat Theory' touted by some newspapers, has everyone felt the threat from Chinese film?"

Iger and others in the audience smiled and applauded.

Mocking the authorities and being anti-war were politically correct in Hollywood; these were fixed programs for the Golden Globes and Oscars.

"If we follow this compound growth rate, and consider the appreciation trend of the RMB, in about 2017, the Chinese film market will be on par with the United States, which is only 10 years away."

In later generations, the mainland box office won the global film market championship for the first time in 2020.

In this life, with the wings of a certain butterfly leading the industry's development, it would only be faster.

"By then, the total box office of China and the U.S. could account for 75% to 80% of the global total."

"I think this should be enough to make everyone here pay attention to the Chinese market, right?"

There was an uproar in the audience, and there was no lack of industry elites chewing on this number and the meaning behind it.

Boss Lu used his old trick again, still using the blue ocean of the Chinese market as bait to eliminate any potential acquisition hostility.

At the same time, it was also a reminder to all the Hollywood power figures present!

The importance of the Chinese market now exceeds that of the Japanese market; for those who recently made strange remarks about history in the six major media outlets, you should weigh the seriousness of the matter!

It was impossible to make them empathize with the blood feud of the Chinese people, but making capitalists bow their heads with money was feasible.

The straight man in the audience came; a USC student raised his hand: "Lu, tell us how to cooperate with Chinese film."

The microphone was passed to his hand, and this USC film department student, who still had a few pimples on his forehead, confessed: "After watching *Elysium* and the videos on Mytube, I really yearn for China."

"Last year, your film school was recruiting, and it's a pity I wasn't selected."

Boss Lu smiled: "Thank you for your support."

"Regarding cooperation with Chinese film, I think the far-sighted Mr. Iger has already set an example, and I will add two points."

"First is the supplement of technical means and professional talent."

"Hollywood's film industry is developed, with more than 150 types of jobs, many of which are lacking domestically."

"Even taking the most common lighting technician, the Beijing Film Academy I graduated from has now even canceled the lighting major because lighting technicians have all switched to cinematography, screenwriting, or directing."

"There are no students and no teachers, so we can't maintain the professional scale anymore."

"Most of our Chinese lighting technicians now come from Yanling, Xuchang in Henan Province; lighting technology is passed down from father to son or master to apprentice. The industry scale is small, and high-end lighting technicians are also relatively scarce."

"Because they haven't learned systematic theoretical knowledge, most of them learn by experience and feeling, and cannot provide directors with more professional lighting effects and combinations."

Lighting technicians are called 'Lighting Masters' in China; because talent is scarce, their status on set is relatively high.

If an actor offends the lighting technician, they will make you lose face;

If a film crew offends the lighting technician, they will make you lose money.

These words were spoken clearly and articulately by Wang Changtian, Chairman of Enlight Media, at the 2017 Shanghai International Film Festival.

He claimed: Lighting technicians from Henan Province control the Chinese film and television lighting industry village by village.

The young director changed the subject: "But as far as I know, this industry is in a state of talent surplus in Hollywood."

"At the very least, this time when the *Sky of History* crew recruited lighting technicians through the union, the number of applicants exceeded my expectations."

"Just like the countless graduates who break their heads trying to get into Industrial Light & Magic, or perhaps you could consider the Eastern company, Sky-Mending Pictures?"

The audience burst into laughter; this young director was trying every possible way to insert a small advertisement for himself.

"Besides the lighting industry, professional talent in every aspect—including production, directing, finance, and set management—are all welcome to go to China. Especially for many international students and ethnic Chinese graduates, the opportunities in China's future are no less than those in the United States. Necessary talent exchange is reasonable."

Boss Lu has proposed film industrialization domestically, and the director position can be considered a segment that can be targeted for training.

But what about talent in other lines?

The domestic training mechanism cannot provide a blood transfusion for the time being, but these categorized talents are in surplus in Hollywood.

It is just that, constrained by the development of the era, these surplus talents have not yet seen the opportunities coming from the East.

Boss Lu calls this guiding the way, not leading the way.

"This is the first point. On behalf of domestic film companies and practitioners, I welcome North American film talent to go to the mainland for exchange and study."

"The second point: In today's increasingly close Sino-US film and cultural exchanges, if Hollywood wants to grasp this blue ocean of China, it must value the Chinese audience."

"Understanding the tastes, preferences, ethnic taboos, and religious culture of the mainland audience does not necessarily have to be linked to politics. Rather, I advise everyone to treat the mainland audience as attentively as you treat North American customers. This is the conscious behavior of a cultural product producer."

"Otherwise, the audience will definitely vote with their feet."

"Just like the filming obstacles our *Sky of History* crew encountered in Germany and the United States some time ago, I hope all media can report truthfully and value the feelings of the Chinese audience."

"I am very gratified to see that whether it is the White Rose or peace associations in Germany, or anti-war organizations in the United States including those of different skin colors and ethnicities, they have all brought us solidarity and support."

"They spontaneously came to the vicinity of the crew to applaud and cheer for us, and drove away the troublemaking protesters. Thank you very much!"

Boss Lu used the consistent tone of domestic public intellectuals toward the Americans, with his voice, stage presence, actions, and expression all revealing a sense of sincerity:

"Art has no borders. This is the meaning of cultural exchange, and the warmth and emotion brought to us by film, the seventh art of humanity."

His tone paused: "Alright, finally, let me end today's exchange with a sentence I consider relatively romantic."

The young director highlighted the point again, gesturing to the donation certificate in his hand:

"These checks are not investments, but love letters written to film. I hope Sino-US films get better and better. Thank you!"

A unique speech concluded, and the follow-up scheduled interviews and public relations were still on the way.

USC students and Hollywood practitioners all saw the opportunities coming from China;

Film industry bigwigs saw a blue ocean;

Harvey, Quentin, and other cronies saw the consistent, stable performance of this old partner; he was simply a perfect orator.

His bewitchment of human nature, his guidance of topics, and his timely witty remarks were all just right.

There seemed to be only one guest in the whole hall who was heavy-hearted.

Because he saw a potential competitor!

This was a competitor holding huge amounts of cash (from the sale of Mytube), proficient in the film industry, and backed by the Chinese blue ocean market.

Boss Lu chatted and laughed with Iger and others as they walked out of the door. Hastings walked over very politely: "Lu, hello, I am Reed Hastings."

Boss Lu looked him up and down with surprise: "Mr. Reed, I have long admired your name. I must thank you for crushing Blockbuster; you are a true industry leader!"

Hastings was not moved by his flattery: "Lu, can I talk to you for a few minutes?"

"Of course."

Iger understood the implication: "I'll go to the cocktail party first."

"Lu, I am very interested in the streaming media you just mentioned. Can we exchange some thoughts?"

The Berlin Best Actor was just about to talk eloquently as he had on stage, but then seemed to "suddenly" remember something and pursed his lips.

"Hmm... Reed, actually this is just an immature idea. I think perhaps now is not a very good time for an exchange."

He pursed his lips toward President Steven and Iger and others waiting for him outside: "How about we set a time to talk later?"

Hastings' expression did not change: "Alright, see you later."

He watched the young director's departing back, and suddenly took out his phone: "Bring the car over, back to the company."

He didn't eat the meal, and he didn't drink the wine.

Reed Hastings was left somewhat bewildered by Boss Lu's smoke screen, unable to figure out what he actually meant.

In the office, the slogan "fast is better than perfect" was on display, but Hastings' hands, flipping through the materials now, could not speed up at all.

He discovered a suspicious point, but found it somewhat laughable.

The relationship, cooperation experience, and scandal events between Liu Yifei and Lu Kuan.

Does it have anything to do with Blockbuster or Netflix?

Hastings remembered that pretty Eastern girl, who kept talking about the terrible prospects of streaming media.

For the sake of that life-saving 300 million dollars, he had no choice but to compromise.

An idea inevitably sprouted in his mind—are this Crystal and Lu colluding? Are they plotting against Netflix?

But that makes no sense!

According to the provisions of the *Securities Exchange Act of 1934*, once one holds more than 5% of a company's shares, one must report and disclose it to the exchange within ten days, stating whether there are any related parties.

That is what later generations call "persons acting in concert."

For example:

Lu Kuan acquires 2% of Netflix stock, and at the same time lets Little Liu acquire 3%. At this time, they must jointly disclose that they are persons acting in concert and are "one family."

If they do not disclose it and are proven to be colluding.

Then in subsequent company role voting, it will be deemed invalid, and this portion of equity will have no voting power.

It is true that Liu Yifei obtained about 14% of Netflix's equity, but if she and Lu Kuan are related parties and have not disclosed it, it is a violation and this portion of voting rights will be stripped.

These two portions of equity cannot be combined, so for Hastings, who firmly controls the other shareholders of Netflix, there is no threat.

They shouldn't be that stupid, right?

Hastings carefully combed through his control of Netflix again and still could not find any exposed fatal weakness, which allowed him to set his mind at ease slightly.

Since the enemy has no chance to touch Netflix, do I have a chance to touch Blockbuster?

Regardless of whether the streaming strategy this Chinese director talked about is true or false, the market value of Blockbuster, which has decayed to this point, is around 800 million dollars.

Considering the rise in prices during bulk transactions and the absorption of floating shares, the cost of a full acquisition would be around 1.4 billion dollars (excluding debt).

He doesn't have this money, but someone does—

Microsoft.

In January of this year, Jobs launched the first generation of Apple phones at a press conference, scheduled for official sale in June.

At the same time, he announced that starting this year, he would increase content development for Apple TV and iTunes Store to provide users with more high-quality works.

This moved Microsoft's cheese.

Microsoft at this time is doing the set-top box business, which is not much different from the concept of Chen Tianqiao of Shanda domestically, and Microsoft's game console Xbox can also watch online movies.

In other words, Hastings knows that Microsoft also has plans to enter streaming media and wants to tempt them to take action and swallow Blockbuster together!

And he himself is also a director of Microsoft.

Hastings was excited about his plan and, with extremely strong execution, visited Microsoft headquarters the next day.

In Ballmer's office, this CEO who had taken over Microsoft from Gates for seven years frowned: "Does Blockbuster still have value? How are you going to handle those stores?"

A helmsman of a top enterprise considers defeat before considering victory.

Hastings avoided the important and focused on the trivial: "Blockbuster is trash in anyone's hands, but I am worried that if it falls into the hands of that Chinese person, it will come back to life."

"After all, he is someone who has done Mytube. I have carefully investigated his industries in China, and he is an enterprise leader who cannot be underestimated."

"I don't believe he acquired Blockbuster just to find rental channels for his Golden Harvest film library; this is simply bullshit!"

"Believe me, Ballmer, streaming media is the future! This is a good opportunity!"

Ballmer was a bit surprised by his excitement and shook his head with a smile: "The shackles of streaming media on format issues are too great, just like us and Apple, we are still betting on our own sides."

Truth is always in the hands of the few. Hastings' vision is unique, but not all North American companies recognize his judgment.

As for Apple and Microsoft, they are only laying out plans based on the idea of diversified development, far from being as radical as Netflix led by Hastings.

At this stage in later generations, Hastings has already shut down all DVD rental businesses and turned to online streaming.

It is just that in this life, he was bound by the 300 million dollars from Little Liu, which slowed his pace, allowing Boss Lu to seize this first-mover advantage and plot his Netflix empire.

Ballmer pondered: "How much money does Netflix need?"

Hastings was confident: "Netflix will issue 10 million shares to Microsoft at a price of 45 dollars per share, plus our own assets and equity pledges, to raise 1.5 billion dollars. For Blockbuster, which has a market value of less than 800 million, it is more than enough."

The Microsoft CEO suddenly smiled: "Aren't you worried that this is a Chinese scheme? What if he turns around and launches a sneak attack on your Netflix?"

"They are the people who wrote *The Art of War*, which is a required course for you at West Point."

West Point provides regular training classes for American business leaders, similar to domestic MBAs.

"I have doubted it, but with the person acting in concert agreement, I have 97% of the voting rights and can apply for a trading halt at any time, and then activate the poison pill clause."

"No, you are wrong."

"I think I need to remind you not to be carried away by your own crazy industrial planning."

Ballmer revealed a piece of news to his old friend that was not meant for outsiders:

"You know about the CSX lawsuit against TCI. According to the judgment of our Microsoft legal team, the judge may reject CSX's request regarding TCI's violation of the person acting in concert agreement!"

Hastings seemed to have been struck by lightning, his face changing drastically!

"What is the reason?"

Ballmer smiled mysteriously: "Equity swap agreement."

CSX is a transport company, and TCI is a fund.

I will not elaborate further on the professional legal term "equity swap agreement."

In short, this is a means to legally utilize existing laws to bypass acting-in-concert agreements.

But why hadn't Hastings thought of this before?

Because the United States is a common law country, and this was merely the judgment of Microsoft's top legal team.

But once the verdict takes effect, the probability of future similar cases being judged this way is extremely high!

In other words, the conclusion Hastings held—that Lu Kuan and his rumored girlfriend Liu Yifei, who was suspected of being his accomplice, had absolutely no possibility of laying a finger on Netflix.

Now looks like a fatal misjudgment!

Hastings naturally believed in the strength of Microsoft's top legal team.

What he didn't believe was!

Could it be that from the very beginning, from when that young Chinese girl came to request a stake, to Carl Icahn of Blockbuster selling his shares, and then to the streaming strategy revealed in the speech at USC today!

Was it all his grand plan!?

Just thinking about it made this extremely arrogant head of Netflix feel his hair stand on end!

Why would he throw as much as two or three billion in capital into the DVD rental industry?

Could it be that he, like himself, saw the future of streaming media?

This is simply a madman!

And an insidious, cunning, and vicious madman at that!

Hastings' back was already soaked with sweat.

Under the prompt of top corporate leader Ballmer, this Netflix CEO had a preliminary taste of the strategy and wisdom from the East, and understood the astonishment Murdoch had felt back then.

He suddenly understood.

Why that Chinese girl Liu Yifei demanded that he not use the 300 million in capital for the streaming business.

Why Lu Kuan had to spread the word and initiate an acquisition on the eve of Blockbuster's total decline.

This was to delay his own layout timing, acquire Blockbuster at the lowest cost, and then...

Set a trap for him that almost led to his "total destruction."

What a poisonous bait!

Hastings' expression was dark and inscrutable; it took him a long while to come back to his senses.

"Ballmer, according to my business investigation, he only has the proceeds from Google's acquisition of MyTube, plus his shares of Focus Media on NASDAQ; even if he pledged everything, it would only be a little over 2 billion dollars."

"He is also attempting to acquire Marvel and do a bundle with Disney; the cash in his hands will only be less."

"I have checked his capital entry records for the past six months, and they are few and far between."

Hastings' eyes grew brighter as he spoke: "Can Microsoft provide another 500 million dollars in corporate bonds? I will think of other ways to scrape together 2.5 billion in cash and drive this hateful Chinese director completely out of the North American DVD industry!"

In fact, what he was thinking about in his heart was the streaming industry.

Ballmer stared at his old friend closely for a few seconds and shook his head helplessly: "Netflix's total market value is not even 2.5 billion; this resolution cannot pass the board."

This is not a matter of tens of millions; this is a transaction totaling nearly over a billion dollars! It must be approved by the board.

"Use my shares in Microsoft as collateral!"

Ballmer looked at him helplessly, gently picked up his coffee cup, and did not answer for a moment.

Truly a madman.

Hastings thought Lu Kuan was a madman, but wasn't he one himself?

Regardless, the young director's painstaking plan had fallen short at the final hurdle.

But losing at the hands of two top North American corporate leaders did not seem unexpected.

Hastings was clearly prepared to unite with Microsoft for a desperate gamble, preferring Microsoft to become a major shareholder in Netflix rather than being successfully calculated by this conspirator from the East.

In his heart, letting such a person get an entry ticket to the streaming track would make him an enemy of Netflix for life.

Why not fight a desperate battle and strangle this disaster while he was at his most vulnerable?

The young director, who was currently filming for Liu Yifei on set, did not yet know that the danger of a counter-kill was approaching.

(End of chapter)