Chapter 109

The stock price on the Nasdaq had no movement, the simplified report from Guoshanfeng didn't receive much attention, and the Xiangjiang media only had sporadic reprints in small newspapers. Everything seemed calm.

Yu Xing and Liu Wan Ying were both watching in anticipation, but couldn't see any clues at all.

However, the day after Guoshanfeng released the report, Focus Media had already temporarily formed a team to inquire about this matter internally.

The team's specifications were high: Director Long Jun, Senior Vice President Ma Ruifeng, Vice President Tu Yafang, and Public Relations Director Ji Hairong came together to deal with the sudden external event of the company.

And, they also had to report relevant situations to the boss, Jiang Nanchun, at regular intervals.

However, after three days of research, they were somewhat at a loss.

First, they thought they would have to pay public relations fees, but the other party had no movement.

Second, they tried to investigate the Guoshanfeng Research Company registered in Xiangjiang, but it was set up layer by layer, making it difficult to pursue the actual controller behind it.

Third, the contact information on the surface couldn't be reached.

Fourth, the research report issued by this research company was very concise, but it did indeed have... some meaning.

And it was because of that bit of meaning that the core senior management of Focus Media were all willing to mean something, but the other side was a blank space, so they didn't know what it meant.

"Or, shall we find someone to hack its website?" Vice President Tu Yafang made a suggestion.

"Hacking a website won't work; instead, it's easy to intensify the conflict." Long Jun shook his head. "Such a new website is insignificant; it can continue to post, it can find media to post. Now there is an important matter: why can it lock onto those things?"

Guoshanfeng's research report didn't give specific data, but the number of screens, related-party transactions, acquisitions, and information disclosure—this kind of pointing was too obvious.

So... after the leader Jiang Nanchun knew the situation, he was first furious, then inscrutable, and then let trusted people handle it.

Senior Vice President Ma Ruifeng said concisely: "Still investigating, but it's not easy to start."

Such a precisely pointed report made it hard not to suspect that there was a leak inside the company, but this level of data and transactions was only known to a few people.

Not easy to investigate, really not easy to investigate.

The four were discussing and consulting when suddenly, Public Relations Director Ji Hairong's phone rang.

He looked at the unfamiliar landline number, pointed to the screen, and said: "It's a landline number from Xiangjiang."

The expressions of the three senior executives all became solemn.

Ji Hairong took a breath, connected the call, and turned on the speakerphone: "Hello, hello?"

"Hello, is this Public Relations Director Ji Hairong of Focus Media? I am Wei Yanli, a reporter from the Xiangjiang 'Economic Daily'. This is our office number." The person reported their identity and asked politely, "Recently, there has been a research report about Focus Media circulating in the market. May I ask, do you know about this?"

Ji Hairong stabilized his emotions and racked his brains to respond to the interview from the Xiangjiang reporter.

The three people beside him had thought this was "Guoshanfeng" finally having some movement; they hadn't expected it to be a reporter's interview, and they didn't feel relieved in their hearts, but rather more solemn.

Thanks to "Guoshanfeng," they now had a rough understanding of the Xiangjiang media. Unlike the previous sporadic reports in small newspapers, the "Economic Daily" was a very influential media outlet there.

Once the "Economic Daily" conducted large-scale reporting, the company's situation would very likely become passive.

Ji Hairong finally ended the call, put down his phone, and said: "We can't go on like this. We need a contingency plan to deal with external changes."

Long Jun asked directly: "What do you think?"

"We don't know who is behind this 'Guoshanfeng', and we can't investigate it for a while, so we have to meet moves with moves. Since it says there is a problem with the number of screens, we have to prove there isn't." Ji Hairong had been considering subsequent developments for the past two days. "Get two independent third-party institutions to research and endorse it, and they have to be the famous kind."

"This matter of related-party transactions... the report only mentions it as suspicious, catching shadows and catching wind. It would be better to clarify it."

"The issue of acquisition..."

Ji Hairong felt it was somewhat difficult; those were things reflected in the financial reports, and it wasn't easy to explain them clearly.

"I have a consideration now. Do you think this 'Guoshanfeng' could be an outsider doing it?" Senior Vice President Ma Ruifeng suddenly spoke. "It's not someone inside our company; I feel this motivation is relatively weak. But if this is a short-selling institution like 'Muddy Waters', wouldn't the situation be more reasonable?"

Ji Hairong was startled: "Could it be short-selling? This..."

The formation of the temporary team came from the suspicion of the leader Jiang Nanchun, so from the beginning, they aimed at the inside.

But this kind of thing, everyone looks like it, and everyone doesn't look like it.

Ma Ruifeng said slowly: "It's not that there's no problem inside; perhaps it's a collusion between inside and outside."

Director Long Jun asked: "'Guoshanfeng' is a domestic name, that thing is a King Cobra, but it seems we don't have a short seller specifically doing this here."

Ma Ruifeng nodded; those famous short sellers seemed to be in Europe and America.

But he immediately said: "Maybe this one is to fill the gap of not having a vicious short seller in the country."

Long Jun glared at Ma Ruifeng; he was in the mood to joke now.

"My meaning is, if this is a short seller's work, what we need to do is grasp the basic board." Ma Ruifeng explained his thoughts. "As long as the performance is good, and as long as the number of screens we arrange is more and more, this face can support the stock price, and more than half of the company's trouble will be solved."

He paused and said again: "It's just unclear how much stuff this Guoshanfeng has in its hands."

The report seen currently is very concise, but it's hard to say whether there will be more later. Everyone has felt the unease of being stared at by a poisonous snake in the dark these past few days.

If this poisonous snake is really a King Cobra vicious enough as its name suggests, then it's not just unease.

"Although the basic number of screens has a bit of a problem, in the next few years, the advertising business in this area in the country is certainly on the rise." Long Jun said.

This is a problem of industry development; the overall direction is upward, which means Focus Media's performance is bullish in the long term.

As the Public Relations Director, Ji Hairong finally said: "Prepare first. It shouldn't be so heartless as to not let people have a good New Year."

Long Jun nodded slightly: "Think on the bright side, maybe it's just an extortion."

Ma Ruifeng also nodded. Extortion is better than short selling; the former might not necessarily have much stuff in its hands, and it wouldn't take much money to send them away. Short selling is too vicious; the institution's gain is far lower than the company's loss.

Hope to have a good New Year.

"Really hope to have a good New Year."

"I'm just waiting for Focus Media to allocate funds here."

"Xiao Ying, tell me, will the agent lawyer in the US black-eat-black?"

On the morning of January 18th, Yu Xing squatted downstairs at the company talking to Liu Wan Ying, waiting for Zhong Zhiling and Lu Haiying to go meet Shen Nanpeng and Xu Xin.

Song Yufeng had physical inconveniences, after all; he and Kong Huilin were waiting for the result at the company.

"Probably not, the lawyer fee hasn't been paid yet." Liu Wan Ying was also a bit nervous on the phone. "Additionally, if the SEC successfully fines them, the bonus we get will be split by 20%."

Yu Xing could only sigh: "Really black..."

"This is still the price I indicated for follow-up cooperation." Liu Wan Ying sighed. "If we could recruit people ourselves, the cost could certainly be reduced, but... it's still safer this way."

The lawyer contacted in the name of a company in the Cayman Islands, and the PUTs were bought by different overseas companies through different brokerages. These settings increased the cost, but the different links were independent of each other, and the sense of security was indeed full.

Yu Xing was about to speak when he saw his second-in-command and third-in-command coming out of the residential area, so he could only say at the end: "Give me news if there's movement."

"I don't know if there will be an echo today; there might be a lag." Liu Wan Ying answered. "I will notify you at the first moment. Send a text message."

Yu Xing ended the call, stood up and moved his feet that had gone numb from squatting, smiled at Zhong Zhiling and Lu Haiying: "Are you ready? Is it not as nervous as last time?"

Whether it was Zhong Zhiling or Lu Haiying, after they reviewed their meeting with Xu Xin last time, they both admitted that they were quite nervous in their hearts.

The two shook their heads in unison.

Lu Haiying said: "I was just discussing with Zhiling, wanting to know who is more powerful, this Shen Nanpeng or Xu Xin."

Yu Xing thought for a moment. The Sequoia China founded by Shen Nanpeng developed very quickly and should have more influence than Xu Xin later, but now...

He pondered for a moment and said: "Xu Xin has very old seniority in investment. She had a lot of dealings with the '99 faction before. Investing in NetEase was in 1999. Looking at it now, she is certainly more powerful."

Zhong Zhiling and Lu Haiying asked in unison: "'99 faction'?"

"It refers to a group of big shots who started businesses around 1999." Yu Xing explained. "In 1999 alone, companies like Alibaba, Tianya, Shanda, Dangdang, and E-Tang were founded. Before and after, there were Sina, Tencent, NetEase... many of them successfully went public. BAT are all giants now. Although Sina, NetEase, and Sohu have slowed down, they are also living well."

"Additionally, the reason I mentioned Xu Xin's contact with them is also because their significant characteristic is embracing capital, and most of them went public overseas."

Yu Xing said this and added: "The environment at the time was just like that; there was no soil for going public domestically."

Zhong Zhiling thought for a moment and asked: "Is this such a clear division? If there is a '99 faction, are there others?"

"I don't know either. I chatted with Xiao Ying, and she told me, but it sounds quite reasonable." Yu Xing smiled. "Let's go, get in the car first."

It's relatively luxurious today; didn't take the subway, but took a taxi to meet the investors.

Mainly, last time there were five people, and one car couldn't fit them. Today it's fine.

After getting in the car, Yu Xing chatted: "Counting back from '99, there are '84 and '92, which happen to be the times of two trips to the south. The market in the '84 era lacked everything, from nothing to something. Domestically, there was more establishment of brand groups: Haier, Midea, Lenovo..."

"'92, well, the real estate industry rose. Ten thousand troops went down to Hainan, the six gentlemen of Vantone escaped the top: Feng Lun, Wang Gongquan, Pan Shiyi, Yi Xiaodi, Wang Qifu, Liu Jun, and Fosun, Taikang..."

Yu Xing talked eloquently, and even the taxi driver listened quietly.

When approaching the destination, Zhong Zhiling felt somewhat yearning: "'84, '92, '99, counting like this... our current era should also have a name..."

Yu Xing only smiled this time and didn't speak.

Counting like this, it can only be '15. The wave of mobile internet is sweeping in, and everyone is surviving and looking for opportunities under the competition of giants.

The taxi driver opened his mouth to encourage: "Young man, keep it up. The future is yours."

Yu Xing smiled: "Keep it up, keep it up, we will definitely keep it up. Master, I see you listened so attentively, you can chat with other passengers in the future. Can you waive this trip for us?"

The taxi driver was also straightforward and decisive: "No!"

"Then rounding off the change is fine." Yu Xing signaled. "Zhiling, pay."

Zhong Zhiling successfully rounded off the change, deeply feeling that his Senior Disciple... grasps the big and doesn't let go of the small.

Upon arriving at the office he had visited last time, Zhong Zhiling and Lu Haiying looked at Xu Xin again, only feeling that she carried the historical glory of the '99 faction's development. Oh right, Shen Nanpeng, who appeared with her, did too.

Xiecheng was also founded in '99. At that time, he belonged to the batch that started businesses.

"Hello Ms. Xu, hello Mr. Shen." Yu Xing greeted. "Hmm, I'm quite surprised that Mr. Shen asked me to meet here."

"I just happened to come here to discuss the gains and losses of JD's investment decision with Ms. Xu." Shen Nanpeng said with a smile. "It's also a regret caused by you. If you sent the message again, would you still send it like that?"

Yu Xing understood. If he hadn't mentioned JD like that, perhaps Shen Nanpeng wouldn't have reached a tacit understanding with Xu Xin.

He shook his head: "I would still send it like that. At least it counted as striving for an opportunity."

Xu Xin said directly: "Didn't I give you an opportunity here?"

"You gave it, I wanted more." Yu Xing said honestly. "But it looks like I failed now."

He looked at Shen Nanpeng: "Do I still need to talk about Baixiaosheng's model? Mr. Shen, I have a financing intent letter here."

Shen Nanpeng waved his hand: "I've read it. The model is clear, the team is okay, the users are developing well, there is investment value, and there is room for development in the future. I think it's worth investing in. But I have an additional question. Although I saw many users' daily activities on your website today, have you considered easing your main traffic diversion mechanism?"

He smiled: "You can't always rely on negative news to divert traffic like this, right?"

"What we provide is actually just an objective and neutral platform, but the actual effect presented currently is that negative news is more eye-catching." Yu Xing said. "It just so happens that we think these are all true, which inevitably leaves some regrets—not for Baixiaosheng, but for the companies that were exposed."

He looked at Shen Nanpeng and continued: "Negative news is not what we are most concerned about. What we are most concerned about is authenticity. And for the workplace, many authentic things are only dared to be posted anonymously."

"Although there is dual certification of real name and work, considering the problem of the anonymous mechanism, we will later launch a real-name clarification mechanism from companies. This should be able to ease some of the conflicts between us and the corporate B-side."

Focusing on the C-side, taking care of the B-side.

Shen Nanpeng thought for a moment and thought this was a good setting.

He looked at Xu Xin and, seeing that she didn't intend to speak, didn't want to go around in circles anymore and said directly: "2.2 million US dollars, 30%. Sequoia China and Today Capital each 1.1 million. If the website develops well, Sequoia is willing to lead the Series B round later."

The price was 200,000 US dollars higher than before, and there were also conditions for the next round.

That is, the company's valuation increased by 666,700 US dollars.

"If the company develops well, will Series B financing be difficult?" Yu Xing asked back.

Shen Nanpeng smiled: "Perhaps it will be easy, but this is the sincerity from our Sequoia China."

Yu Xing asked Xu Xin again: "Will the previous consultant office still be set up?"

Xu Xin insisted tactfully: "Baixiaosheng hasn't been established for long after all, Mr. Yu. Don't treat this as a restraint. In fact, perhaps saying this will make you uncomfortable, but many companies want us to set up an office, and we don't go."

The progress of the meeting was much faster than Yu Xing had imagined, and there wasn't even a chance for others to speak; they went straight to talking about price and conditions.

He pondered for a moment and stated the conditions he wanted: "3 million US dollars, 20%, completely free development."

Xu Xin smiled like a smile: "This valuation of yours is unreasonable."

Shen Nanpeng nodded slightly and said: "Mr. Yu, I held an annual meeting in the capital two months ago. 32 CEOs of companies invested by our Sequoia China attended. I very much hope you can attend our annual meeting this year."

"A Series A round of 2.2 million US dollars is already very generous for a website that hasn't been established for long. This is an admission ticket."

"I actually didn't consider too much; I am willing to trust Ms. Xu's vision."

"You should thank Ms. Xu."

Shen Nanpeng looked at the hesitant young founder in front of him and said this.

Yu Xing took a breath. Actually, this condition was also within his expectations and was acceptable.

Just as he wanted to speak, the phone in his pocket vibrated.

Yu Xing took it out and saw a message from Liu Wan Ying, only two words—Done.

Done!

Focus Media is going to allocate funds!

We have a gold master for the Series A round!

Yu Xing kept his expression unchanged, put his phone on the table, and according to Shen Nanpeng's wish, said: "Thank you, Ms. Xu."

Xu Xin revealed a smile.

Yu Xing continued: "And thank you, Mr. Shen."

Subsequently, he paused and gave his decision: "Let's shelve it for now."

The smile that Shen Nanpeng also revealed froze on his face.

Yu Xing stood up directly: "Ms. Xu, Mr. Shen, although the Series A round didn't cooperate, you will be the institutions we consider most preferentially for our Series B round. Thank you for your recognition."

Shen Nanpeng frowned and asked: "Why? What does shelving mean? Not raising the Series A round? Not even considering it?"

Before Yu Xing could answer, his phone suddenly rang.

Shen Nanpeng picked up his phone, listened for two sentences, and his expression became somewhat bad. Broken!