673 Going Public (1/2)
The next morning, despite an extra twenty thousand copies of the Wall Street Journal being printed, the shelf was cleared out immediately.
The reason why was because of two names – Future Technology and First B City Bank.
In the next while, the two names dominated the headlines of newspapers, magazines, websites and forums. The former was recently in turbulence due to the anti-trust scandal while the latter's stock price and client number plunged because of the client information leak.
It was not difficult for people aware of the situation to draw connections.
Future Heavy Industries intervened in Saudi's freshwater project, but Matrix was controlled by First B City Bank and B City Scientific. Both companies were subsidiaries of B City Consortium. After considering all the players, the entire event became clear.
Jiang Chen touched the cake of B City Consortium, and B City Consortium bribed Blue Seagull to smudge the image of Future Group and that unfolded the economic war.
An irresponsible hypothesis, based on the control of each consortium to the Capital, would be that it was highly likely that the anti-trust investigation against Future Technology was the work of B City Consortium. And the infiltration of First B City Bank's firewall was likely done by Future Technology, since they were the leader within the tech industry capable of artificial intelligence.
But last night, both companies published the same announcement on their respective site stating a partnership in the virtual reality financial field to pave the road to virtual reality shopping. The information immediately defeated all the rumors and First B City Bank's shares spiked by 6% on the day.
It was the first rebound the share experienced since the leak.
Not only was VR + Finance an element, Future Heavy Industries will separate the production and distribution in the freshwater project to form the High Tech Freshwater Supply. The company was injected with 400 million US dollars with an equity swap of 19% in exchange for 20.8% of Matrix to replace the Loki family as the largest shareholder of Matrix. The two companies will develop synergies in its operations. Matrix will utilize its vast resources to gain clients while Future Heavy Industrial will digest the contracts.
To Future Heavy Industries with only technology, an equity swap with Matrix was the perfect choice.
At the same time, High Tech Freshwater Supply went public with First B City Bank as the sole book runner.
The IPO of High Tech Freshwater Supply marked the first subsidiary of Future Group to go public. The Wall Street investors were full of expectations with analysts predicting the Saudi freshwater supply would generate at least 400 million US dollars in profits per year! Based on the large demand in the Middle East region, the number could more than likely double!
Based on the a P/E ratio of 15 times, the company with only 400 million US dollars in equity could exceed a market cap of 6 billion US dollars and gear toward 10 billion in a year's time!
The tremendous value naturally made the share the Wall Street darling.
With the assistance of B City Consortium, the IPO process went smoothly. The previously tedious process was not a problem with the support of the consortium and the passion of the investors.
As to why Jiang Chen suddenly changed his mind about going public, it was because of Carson Loki's words.
They already reached an agreement on the partnership by then, but Jiang Chen was against going public from the start. The reason was simple; he firmly believed in the potential of the freshwater business. Future Group didn't lack money and hence didn't require going public to draw additional funds.
”Saudi is UA's strategic ally, even if we are not here to intervene, your business won't be so smooth in the Red Sea.”
”Why?”
”Because of UA's military presence in the Middle East.” Carson smiled. ”Mr. Jiang had done some business in Iraq, am I right?”