Reborn Tech Maniac

Chapter 169 The Argument About the IPO

He endured his impatience and talked with the other party for a while, until Markkula walked in, "Robert, come to my office to continue the discussion. Don is also here, so let's go together."

Robert seemed a little reluctant, but he still nodded and agreed. Tang Huan didn't bother to ask what was going on. He followed Markkula to the office of the chairman of the board of directors and found that Jobs, Scott and several other Apple directors were also there.

Before the three of them could sit down, Jobs said to Robert with a displeased face, "Aren't you very well connected in Wall Street? Hurry up and find another underwriter."

"Morgan Stanley is already the best partner." Robert replied in a muffled voice.

Upon hearing the content of their conversation, Tang Huan guessed that they were discussing the listing of Apple's stock, but it seemed that the atmosphere was not very harmonious.

It turns out that as a leader in the emerging industry of personal computers, many of Apple's situations are groundbreaking, and the same is true for the IPO. Not long after contacting the underwriter Morgan Stanley, they directly discussed the issue price. A huge disagreement ensued.

The Morgan Stanley group is extremely conservative. After evaluating data such as net assets, they give a unit price of $12 per share, which even arouses the dissatisfaction of the company founders and the first batch of venture investors. , Jobs even jumped to the ground, "We are such a great emerging technology company, is it so worthless in the eyes of you bankers?"

It is conceivable how the two parties broke up unhappy in the end.

Tang Huan rubbed the center of his brows, and muttered to himself, Jobs was really ignorant and fearless, and he was not at all polite to the elites from Wall Street.

In his opinion, what Robert said is not unreasonable. At the current stage, Morgan Stanley, which is commonly known as "Morgan Stanley" in the financial industry, should be the best partner. It and Goldman Sachs and other companies have a strong position on Wall Street. It can be said to be very important.

The history of Morgan Stanley can be traced back to the 1930s. At that time, the United States was tossed by the economic crisis into the Great Depression. Most people blamed the cause of the economic collapse on the Wall Street stock market crash in 1929.

In order to curb speculation, in 1933 the U.S. Congress passed the Glass-Steagall Act, or the Banking Act of 1933.

One of the regulations is to completely separate commercial banks that focus on deposit and loan business from investment banks that make profits from securities, forming a mechanism similar to a firewall.

This act eventually forced JP Morgan to abandon its investment banking business and transform into a single merchant bank.

The reason for this choice was that at that time, compared with investment banking business, commercial lending services of commercial banks could bring greater profits.

At the same time, the company's managers believe that the political environment will eventually change in the future and prompt the repeal of the Glass-Steagall Act. At that time, JP Morgan, as a commercial bank, can quickly It will be difficult to resume investment banking business and vice versa.

So in 1935, JP Morgan closed its investment banking division completely.

Partner Henry Morgan, the grandson of the famous John Morgan, and Harold Stanley led the company's investment bankers to establish a new securities company, named Morgan Stanley, and in 1941, became Partner of the New York Stock Exchange.

This group of elites has a very accurate grasp of the future. The provisions of the Glass-Steagall Act are indeed being gradually canceled and replaced.
For example, allowing the Federal Reserve System to regulate interest on savings accounts was abolished by the Thrift Institutions Deregulation and Currency Control Act of 1980.

In the original time and space, the regulations prohibiting bank holding companies from owning other financial companies were also abolished by the Financial Services Law Modernization Act that came into effect in 1999.

It can be said that this change is almost inevitable, because the United States is so isolated, but European countries have not followed suit, and will naturally have a certain advantage in the competition.

But with the popularity of bank holding companies like department stores, no matter what kind of financial business they are involved in, the potential risks are also increasing. Fortunately, they can be transferred through globalization. The turmoil in world capital markets that began later in the decade was not necessarily unrelated to this.

Under the leadership of these visionary financial elites, the development speed of Morgan Stanley can be imagined.

Apple should be happy to be recognized by such a boss and have the value of operating and listing. How can it just slap the table casually for a small problem.

You know, these guys who play finance have already stopped talking about the so-called demeanor. When they helped the client implement the acquisition before, they would try their best to attract or persuade the acquired party to agree, and they would never openly force the merger. It can be called a civilized norm Yes, but after entering the 1970s, it was Bawang's hostile takeover.

For example, in July 1974, Morgan Stanley, which had the best reputation in the investment banking industry, took the lead in launching an attack on behalf of its Canadian client, International Nickel-Chromium Corporation (INCO), and participated in the hostile takeover of Electric Storage Battery Company, the largest battery manufacturer in the world at that time. That is, the actions of the ESB.

There are bad faces and bad faces. In this acquisition, Goldman Sachs participated under the banner of "anti-takeover consultant".
After ESB learned of Morgan Stanley's hostile intentions, it quickly called Freemander, who was in charge of Goldman Sachs' mergers and acquisitions department at the time, and asked for his help.

At nine o'clock the next morning, Freemand sat in the office of the owner of ESB in Philadelphia.

When he learned that the bidding price was US$20 per share, which was US$9 higher than the previous trading day, he suggested that ESB use the "white warrior" method to deal with INCO, or launch an antitrust lawsuit.

With the help of Goldman Sachs and White Warrior, INCO finally paid a high price of $41, and ESB shareholders' shares rose by 100%.

Starting from this incident, Morgan Stanley first, and then First Boston, all played the role of hostile takeovers, while Goldman Sachs was the pillar of anti-hostile takeovers, and together they staged a fight between acquisitions and anti-acquisitions .

Morgan Stanley, which participated in hostile mergers and acquisitions, obtained record-breaking income; Goldman Sachs helped companies that suffered hostile acquisitions, invited friendly bidders, namely white warriors, to participate in the bidding, raise the acquisition price or take antitrust lawsuits to snipe Hostile takeovers also gain both fame and fortune.

It is not difficult to see that these investment bankers are similar to the plaintiff and defendant lawyers, whether they are playing devils or angels, they still make a lot of money and have great energy.

Apple, which is destined to enter the stock market, must learn to get used to the rules and make friends with others.You know, in the future, you will be promoted by the other party to the altar with a market value of 7000 billion U.S. dollars, and you will become the first company in the history of the United States whose market value exceeds this figure.

Therefore, whether Morgan Stanley wants you to lie down or lie down, you have to put a smile on your face, and you can't make petty temper, let alone make trouble.

If there is a disagreement, you can act coquettishly, and you can also hook up with one woman and two families.

In Tang Huan’s memory, there were two investment banks in charge of Apple’s IP0 in his previous life: one was Morgan Stanley, a traditional Wall Street firm, and the other was Hambredit & Quist in San Francisco.

Later, the latter also helped Genentech, Netscape, Amazon and other companies to successfully conduct IPOs. It was a remarkable achievement, and was eventually favored by **** and taken over.

It can be seen that Hamberquist has a more positive understanding of the value of emerging technology companies like Apple.

While Tang Huan was thinking about it, the quarrel in the office became more and more intense, and some people even speculated maliciously, "Morgan Stanley did not want to underwrite our stock by relying on its own strength to sell our shares to other companies when they offered such a price." Investment banks, make a fortune out of it."

"There's no need to doubt Morgan Stanley's professionalism so much, right?" Robert, who was the matchmaker, was both depressed and aggrieved. "As for the choice of underwriting distribution method or agency distribution method, isn't there no time to discuss it?"

Hearing this, Tang Huanyi frowned and said to himself, even if you are crossing the river by feeling the stones, there is no need to make such slow progress.

However, Morgan Stanley is indeed too conservative, and the price given is very inappropriate.You know, in this time and space, I have greatly expanded the application field of the second-generation Apple machine through office software and function expansion cards, which is far beyond the comparison of other types of personal computers on the market that are often used to play games. .

Moreover, there is a clear data reference in the original time and space. On the day Apple’s stock was listed, the bankers finally settled on a share price of $22 a share. By the end of the day, the stock price had risen to $29.

The gap between the two is too big. According to Tang Huan's prediction, the issue price of Apple's stock must be more than 25 US dollars. Otherwise, I have done so much for Apple, what is the point?

Markkula noticed the change in Tang Huan's expression, raised his hand to signal everyone to be quiet, and asked, "Tang, what do you think about the IPO?"

Tang Huan didn't want to waste time with unnecessary quarrels like the one in front of him. If he had the time, he might as well go home and change the diaper for the child, so he expressed his thoughts without hesitation.

"Everyone, I think everyone should calm down first. If Apple is successfully listed, it will set a precedent for the personal computer industry. Since there is no precedent to follow, then Morgan Stanley gives the traditional evaluation, it is no wonder.”

Jobs, whose mouth was parched from the quarrel just now, had moistened his throat. He looked at Tang Huan, who hadn't talked to each other for a while, and asked, "Then, according to your intention, accept Morgan Stanley's price?"

(End of this chapter)