Chapter 429 (1/2)

In July and July, Simon spent most of his energy on a financial report of the westrow system in the second quarter of 1991.

Because the scale of the enterprise has doubled, and it is the initial stage of the merger, it was not until August 21 that the first quarterly financial report after the merger of danielis entertainment and MCA was finally released.

In the three months from April to June 1991, the new Denise entertainment group had a total quarterly revenue of US $1.93 billion, second only to Time Warner Group, whose annual revenue reached 10 billion, and ranked second among the seven major Hollywood companies.

However, compared with the huge profits in the same period of last year, this time, due to the large amount of money consumed by the staff layoffs, debt repayment, asset write down and other activities in the process of the merger of the two companies, the net profit after tax of Denise entertainment in the second quarter was only a paltry $28 million.

After the completion of M & A of large enterprises, it often means a huge loss lasting for one or two years, which is the case of Time Warner.

Steve Ross is struggling with Time Warner's huge debt from its last acquisition.

As a result, Simon was generally satisfied with the results.

After AOL's successful IPO, Cisco's IPO began to accelerate.

As the Internet industry began to take off in the past year, Cisco's revenue growth is also more and more rapid.

In the past second quarter, Cisco's revenue was $298 million, up 26% from the first quarter. At this rate of revenue growth, the company's revenue for 1991 is expected to reach $1.2 billion.

With most of its revenue invested in business expansion, Cisco's quarterly net profit still reached $16.79 million.

Because the entire westero system almost monopolizes the core patents of the world wide web platform, Cisco's market share of network equipment products such as routers and switches has reached more than 95%. Because of this obvious monopoly, the management predicts that in the next few years, as long as Cisco can maintain its advantage in the Internet equipment market as far as possible, the company's net profit margin is expected to reach more than 20%.

Cisco is different from AOL, which is limited to the three major operators on the East and west coasts of the United States. This company is oriented to the entire Internet equipment market in North America and overseas. Coupled with the monopoly of the world wide web based patents, the capital market is more looking forward to the prospect of Cisco's IPO.

Before AOL was officially listed on the NASDAQ Exchange, Cisco had submitted a prospectus to the securities and Exchange Commission.

is also about 15% of the proportion of new shares issued. According to the 271 million share total capital stock adjusted before CISCO IPO, the number of new shares issued is 40 million shares.

In addition, the IPO, Cisco's shares will also be adjusted to a dual ownership structure.

Westero's 15600 shares in Cisco fell from 57.5% to 50.1% after the IPO. Class A shares holding 10 times the voting rights of tradable shares still guarantee 56.7% of the voting rights of Westeros.

Other shareholders of westero have naturally objected to westero's strong demand to maintain absolute control over Cisco.

Westero's 57.5% stake in Cisco is not as high as 75% before AOL's IPO, which almost triggered the IPO.

However, it was only after Simon made no concession to show his tough attitude of either dual ownership structure or abolishing IPO that the unwilling other shareholders stopped.

Different from the calculation method of 35 times expected P / E ratio adopted in AOL's IPO process because of negative net profit, Cisco maintained relatively considerable net profit in the first two quarters of 1991, and the net profit scale of 1991 is expected to reach about 65 million US dollars.

Morgan Stanley did not calculate and value the P / E ratio according to Cisco's net profit margin of only 5% in the second quarter. Instead, it gave a valuation of US $3 billion equivalent to AOL based on such elements as corporate revenue, cash flow and market share.

Simon is not satisfied with such a valuation. In

's memory, at the peak of the Internet bubble in 2000, CISCO's market value broke through 600 billion US dollars, and AOL did not reach 200 billion dollars.

That's three times the difference.

Even now, although the revenue volume of the two companies is similar for the time being, the gap is obvious.

AOL only operates in a few states along the East and west coasts of the Federation. Cisco not only monopolizes the Internet equipment market in North America, but also has no competitors overseas.

As a result, Simon insists that Cisco's valuation is higher than AOL's, and very high.

After several rounds of bargaining, the company's IPO valuation was confirmed at $5 billion, and the revised offering price range submitted to the SEC was between $17 and $19.

Despite AOL's success, due to Simon's high valuation strategy, Cisco's IPO has to start the green shoe mechanism to deal with the possible fluctuation of the stock price after listing.However, the green shoe program is not to issue new shares, but other shareholders of Cisco take 6 million shares as a reserve.

Cisco's shareholders have held shares for up to seven years since the company was founded in 1984.

For example, the famous Sequoia Capital, these companies have a relatively strong desire to cash out. Starting the green shoe mechanism can just meet their needs.

Westero and other Cisco shareholders agreed that once the stock price rises after the listing, other shareholders will provide investors with an additional 6 million shares. If the share price falls after the listing, westero will buy about 6 million shares at its own expense to stabilize Cisco's share price.

In fact, if necessary, Simon doesn't even mind buying all of Cisco's outstanding shares and re privatizing the company.

Simon, however, is confident that westero's need to invest in the stock is unlikely.

Through this period of operation, the final date of Cisco's IPO is confirmed as September 6, which is also a Friday, about two months later than AOL's IPO.

The two consecutive IPOs also made Simon realize that he has opened the Internet era ahead of time.

You know, the world wide web standard in memory was gradually formed in 1993, and then, in 1995, the Internet industry began to break out.

Now, Simon put forward a complete technical solution for the world wide web in 1990 ahead of time, and the Internet era is coming ahead of time.

The Internet sprouted in the 1960s, and computers began to appear in the 1970s. After decades of accumulation, the Internet industry has a very fertile ”soil”. The world wide web is like a seed, which was planted three years in advance. On the already fertile land, the seed will quickly take root, germinate and spread with the wind.

What's more, Simon is a ”farmer” with decades of farming experience in the future.

Graphical interface browser, igritte portal, AOL's advance efforts and so on have all provided the growth and spread of this seed with super nutrients like auxin.

Cisco's IPO roadshow started on August 26, so Simon does not need to follow up personally.

After his trip to Europe in early July, Simon basically stayed in Los Angeles for more than a month, working with Janet, who has been pregnant for five months.