[Chapter 867: Unstable Factors]
Three days after the wedding, Eric held a three-day eting with more than a dozen executives from the Firefly Group in an empty barn on the farm. The the of the eting was relatively informal; Eric initially presented a topic titled "Digital Life in the Internet Age," prompting everyone to prepare relevant speeches based on their respective fields of expertise for improvised discussions.
Under the umbrella of Firefly Investnts, companies like Cisco, Arica Online, and Yahoo had already established a complete industry chain in internet technology. The future layout involving Qualcomm, Sprint, and Nokia was also taking shape. As long as these companies could achieve seamless cooperation and maintain strong market positions in their respective fields, Firefly would essentially control a massive and formidable high-tech business empire that would inevitably impact everything from the global political economy to the daily lives of ordinary people.
However, during these three days of etings, Eric also identified so unstable factors within the Firefly system.
...
On May 24, the day after the etings ended, John Chambers, Ian Gurney, and others headed to the White House for a banquet at Clinton's invitation from the wedding day. But Eric and Chris opted not to join the festivities.
Outside the barn, in a small pasture, Eric and Chris leaned against the fence and watched the scene unfold nearby. Jeffrey was walking a pony, with Emma joyfully waving her hands while riding, and Joanna carefully nearby. Emily and Virginia chatted with two other kids in the vicinity.
After quietly observing the heartwarming scene for a mont, Eric finally checked the thick eting notes in his hand. These were the records taken by several assistants during the etings. Among them, Steve Case's speech on "The dia Developnt Advantages of Internet Companies" was particularly troubling to Eric.
Initially, Arica Online, as part of the "Information Industry Alliance" plan, was ant to serve as an internet service provider. Its future direction was also aid at developing into a comprehensive telecommunications operator like AT&T. Eric had even discussed with Steve Case the possibility of acquiring either Verizon or Sprint, and potentially expanding into the cable TV sector.
Understanding the bubble-like boost that portal websites and online email services would give to Arica Online's stock price in the coming years, Eric had not placed restrictions on Arica Online's growth in these areas; he even provided substantial technical support. Currently, Yahoo commanded a 70% market share in the online service sector, with Arica Online trailing at around 10%, while latercors like Microsoft shared the remaining 20%.
But perhaps spurred by the recent explosive growth of internet concepts, Steve Case's speech indicated a clear preference for Arica Online to shift towards being a content provider, even reminiscent of the forrly proposed acquisition of Ti Warner, which would transform Arica Online into a comprehensive internet dia group.
Despite ambitions to dominate Hollywood, Eric did not wish to see this scenario unfold.
No one understood better than he did that the currently thriving internet industry was rely an extravagant bubble. From mory, Arica Online had strayed from its path as an internet service provider and was among the first to fall after the bubble burst.
More importantly, if Arica Online deviated from its established trajectory, Eric's carefully crafted industry chain would face a significant fracture.
Reflecting on these thoughts, Eric spoke first. "According to yesterday's closing price, Arica Online's market value has already surpassed $20 billion, right?"
Chris nodded. "Yesterday's closing stock price was $138, with a total market cap of $20.7 billion. We have 45 million shares, which is still 30%. Oh, those over at Clover must have absorbed quite a bit, huh?"
Eric considered. "They probably hold around 3 million shares."
"That's about 32%. However, even though we're the largest shareholder, we don't have absolute control," Chris noted. "Based on Arica Online's current market value, we can't muster enough capital to pursue absolute control."
Eric grimaced, realizing that not securing Arica Online tightly was a misstep. When he initially invested, many elents were just taking off, and he never harbored such ambitions; he mainly acted on a speculative mindset, hoping to cash out when the stock price surged.
That initial decision had laid the groundwork for the current struggle over Arica Online's control.
It's clear that internet-related businesses were far more favored by investors than traditional telecom services. Thus, if Steve Case insisted on pushing Arica Online to develop its dia business, Eric, even as the largest shareholder, couldn't ensure he could unseat Case as CEO.
Shaking his head in self-mockery, Eric asked Chris, "If we tried to oust Steve Case now and seize control, how certain could we be?"
Chris tapped against a nearby wooden post and thought. "Not even 40%. Arica Online's current montum is strong; the board wouldn't agree to a shake-up."
With such favorable conditions surrounding Arica Online, Eric wasn't keen to stir up any news about discord between managent and shareholders.
However, should Steve Case continue on his current path, focusing Arica Online on the inflated internet dia business, the bubble's burst would hit the value of Firefly's Arica Online shares hard. While Yahoo had also focused a substantial amount of energy on internet dia content, Eric had always seen Yahoo as a technology company. The search engine business it was quietly developing was Yahoo's future, whereas Arica Online's survival, based on its internet access service, was clearly insufficient to shift in that direction, and Eric would not allow it to.
After hesitating for a mont, Eric queried, "What if we decided to cash out in a few years?"
If he couldn't control Arica Online's direction, cashing out while the stock price was high would undoubtedly be the best outco.
"We hold over $6 billion in stock value. Selling that amount in the open market would cause a major impact on stock prices. Ideally, we'd look for institutional buyers, but moving $6 billion is a tall order," Chris shook his head, then added, "Besides, based on the current landscape, Arica Online's stock price hasn't peaked yet. Over the next one or two years, that 30% stake could reach astronomical values."
In Eric's mory, Arica Online peaked at a market cap over $160 billion, and he believed the extent of that bubble exceeded 80%. Therefore, he would be content cashing out even 10% of his stocks during that high.
If he could net $16 billion, even after the internet bubble burst, he could use that to mitigate the damage from Arica Online's deviation from Firefly's information industry alliance plan.
Of course, if Arica Online could stick to the established route laid out by Firefly, even if it faced a bubble burst eventually, Eric would not choose to cash out.
But all that was likely a matter for a year or two in the future.
"Forget it; we're ultimately unsure of what Steve will do. Right now, it's best we focus on what we can control."
Chris nodded. "I'll take steps to rally support from other board mbers. If necessary, we'll attempt to get Steve Case replaced. Also, considering how tightly intertwined Arica Online and Yahoo are, do you think we need to limit that in any way?"
"No need; Arica Online doesn't pose a threat to Yahoo," Eric shook his head. "Limiting Arica Online would only affect our own interests and create opportunities for competitors."
"Okay, we'll leave it at that for now."
Even with 30% voting rights on Arica Online's board, Eric decided to let Arica Online "grow wild" for the ti being, waiting to see what Steve Case ultimately chose.
If Case insisted on pursuing the dia route, Firefly would try to replace him. If that attempt failed, Firefly would aim to exit as soon as feasible, before the bubble burst.
However, if Steve Case allowed Arica Online to develop on the outlined trajectory, the outco would undoubtedly be mutually beneficial. After all, acquiring a traditional telecom operator would allow Arica Online to maintain a strong position in the internet service provider market even after the bubble burst, and it could also expand into mobile communications.
But if they followed the sa path as in the original world by rging with Ti Warner, Arica Online would be dood to collapse quickly once the bubble burst, given its business model would not align with Ti Warner's.
...
After spending two additional days in Maryland, Eric returned to Los Angeles on May 27.
By that ti, the North Arican sumr blockbuster season of 1997 had officially comnced.
This year's sumr lineup kicked off with Luc Besson's long-prepared The Fifth Elent, a sci-fi blockbuster that cost 450 million francs, approximately $90 million, making it the most expensive movie ever produced in Europe at that ti.
Before its North Arican release, The Fifth Elent had already premiered in Europe, Southeast Asia, and Latin Arica, receiving moderately promising box office results.
Due to their collaboration on Leon: The Professional, Gaumont Film Company had hoped Firefly would handle the North Arican distribution of The Fifth Elent.
However, Eric wasn't optimistic about the film's comrcial potential. He recalled that the movie had a completely polarized reception, likely translating into poor box office performance. Furthermore, the copyright was held by Gaumont, and rely taking on the role of North Arican distributor didn't align with Firefly's interests, so Eric chose to decline.
Ultimately, as a special effects movie, even though Firefly wasn't interested in the distribution rights, Eric still introduced it to Fox. With proper marketing, such a recently popular CG-animated film could easily gross more than $100 million at the North Arican box office. However, disagreents on the distribution split between Fox and Gaumont ultimately led to the rights falling into Sony Pictures' hands.
This left Gaumont in quite a predicant.
With Godzilla also slated for release in the sumr, Sony dedicated almost all of its distribution resources to this highly anticipated monster flick. The Fifth Elent missed out on valuable June and July slots, and its marketing scale fell drastically short compared to Sony's own release, Godzilla.
Ultimately, The Fifth Elent opened on May 16 with a first-week box office of just over $22 million. Although its second-week drop was a re 30%, given the impending wave of sumr blockbusters in June, The Fifth Elent's final North Arican gross would likely stall between $60 million and $70 million, far from Gaumont's expectations. Struggling in this crucial North Arican market made it exceedingly unlikely for Gaumont to recoup its $90 million production cost.
The fate of The Fifth Elent illustrated one reason European comrcial cinema struggled to gain traction.
The film markets in Europe, particularly in countries like Britain, France, and Germany, were limited and couldn't support the survival of a major film company. While Gaumont was the largest comrcial film production company in France, in Hollywood, it would only be classified as a second or third tier player. Such a studio couldn't sustain the production and distribution of a film the scale of The Fifth Elent, and as a foreign entity, the road to success beca even more daunting.
Upon returning to Los Angeles, Firefly's first sumr release, Con Air, was set to officially debut on May 30, facing off against Paramount's The Lion King 2.
So dia clearly hadn't forgotten the earlier reports of a joint blockade against The Lion King 2 by Firefly and Fox, and everyone was curious about the outco of Con Air versus The Lion King 2.
However, before Eric's thoughts fully shifted to the film, he welcod two visitors from San Francisco: Larry Ellison and Steve Jobs.
*****
spatreon/Sayonara816.
User Comments
0 comments from readers