Start by trimming cow hooves

The offer made by Suri seemed sincere.

Mr. Reed Hastings is quite excited. He has been trying to transform into a real Internet company and thinks this is a good opportunity.

So after dinner.

Reed Hastings immediately asked chief operating officer Greg Peters to call other board members and decided to hold an interim board meeting tomorrow morning to focus on whether the financing should be split.

Anyway, he, the founder of the company, and Greg Peters were both optimistic about the cooperation proposal, and after discussing it, they felt that they should give it a try.

The recent financial crisis has caused Netflix's stock price to plummet. Major shareholders and retail investors are in urgent need of good news to stimulate a recovery in the company's stock price.

In Greg Peters' view.

Even if online TV fails to develop after the joint venture, at least it will be able to boost Netflix's stock price in the near future. By selling the concept to the outside world, it will attract the attention of potential investors and increase the market value by US$3.5 billion.

Moreover, after the financing is negotiated, there is no need to continue to spend money to fill the hole in the short term. The financial report for the fourth quarter of this year will be much better, which is also conducive to the company's long-term development.

CEO Reed Hastings was eager to solve a question first.

He was curious about how much the online TV project would be worth if it were separated out separately. Nowadays, this is just a department of the company, and no organization has specifically estimated its value.

After Reed Hastings finished the phone call and temporarily hired a team of consultants from McKinsey \u0026 Company, a group of people came to Netflix's headquarters that night and worked overtime overnight to compile data by category.

Suri's staff can think of the value of Netflix's intangible assets.

Professional institutions such as McKinsey Consulting will certainly not let go of any truly valuable assets. When making statistical valuations, they will discount intangible assets, including hardware servers, software development costs, etc.

Early the next morning.

As soon as Mr. Reed Hastings arrived at the office, he was handed an asset valuation statement.

Data showed that the average number of daily active users of Netflix online TV was more than 700,000. He briefly browsed to the end and found that the valuation given by McKinsey Consulting Company was between US$160 million and US$200 million. .

The online TV company itself is not worth so much money, but Netflix's own user resources are very valuable.

Various valuation agencies in Silicon Valley assess asset values ​​in similar ways, and many non-listed companies and venture capital institutions basically recognize these professional results.

After reading the report.

Reed Hastings was both surprised and depressed.

He thought to himself that there really weren't that many pies in the world, and Suri wasn't as generous as he imagined.

Last night, I only focused on the more than 40 million US dollars invested in the project, thinking that the entire project would only last about 100 million US dollars, but ignored the value of Netflix’s platform resources, with a total of more than 30 million monthly active users, advertising The fee is worth $100 million.

No wonder Suri mentioned many times during dinner last night that the current traffic promotion channels should be retained and cannot be completely separated.

I originally thought there would be a full 150% premium, but after reading the valuation report, I found that the premium space had shrunk a lot, and the feeling of missing out instantly faded.

Of course.

The cooperation plan proposed by Suri is still very attractive.

Therefore, Reed Hastings decided to continue holding a board meeting to let everyone brainstorm and discuss their ideas.

…

It is already October 2008, and Christmas will be celebrated in two months.

Netflix performed very well in the first half of the year. In September, it suddenly encountered a financial tsunami, and its market value plummeted by one-third, basically falling back to the level of the same period last year.

All independent directors are troubled by the inability to meet the standards for option awards. The bonuses received at the end of the year will be severely reduced.

Come over for a meeting today.

They were surprised to learn that Facebook's fourth largest shareholder, Su Rui, took the initiative to propose the spin-off of an online television company and was willing to provide more than US$200 million in financing. This came as a surprise to them.

Basically, there will be no idiots to be hired as board members. They must care about the interests of shareholders as well as their own profits.

After reading the valuation report analyzed by Reed Hastings overnight, several non-executive directors quickly reached a tacit understanding and agreed to negotiate a detailed charter to separate the network TV project as soon as possible.

Just like Suri said.

It's just financing, not acquisition.

Even if the project is split, it will still exist as a subsidiary of Netflix. There will be no loss for them. Instead, they will be able to transfer risks, add some new profit points, and successfully overcome the current difficulties.

Everyone agreed unanimously.

Reed Hastings also couldn't fault it, so he simply voted on the spot and passed easily.

From Suri's perspective.

This is what a prodigal does, selling the hen that lays golden eggs.

However, as far as Netflix is ​​concerned, its core business is still video rental.

The online TV project is a less successful transformation. The market response is mediocre and it also faces competition from other film and television companies.

Keeping it in hand may not necessarily lead to smooth development. It is far better to cooperate with Su Rui and borrow the financing provided by him to explore the unknown road ahead.

If it fails, there is no need to say much. Anyway, it will not be any worse than now. But if it is successfully run, it will be a free surprise.

Faced with a financing amount of 250 million U.S. dollars, everyone felt that it would be a bit unreasonable to bargain any more, and it was easy to make a decision...

——————————

I stayed up late again last night.

Not long after Suri got up, on her way to breakfast, she happened to receive a call from Reed Hastings.

The other party told that teams from both sides could be in contact as early as Monday to discuss the details of splitting, management and subsequent cooperation.

Suri thought he would probably agree before, but she didn't expect it to be so quick.

The efficiency of large companies has always been slow, and is not as good as that of some small start-ups. Today's performance is extraordinary. It is obvious that the price tag last night was deeply rooted in their hearts.

Although the child was lost, fortunately, he successfully trapped the wolf and did not suffer a loss.

After signing the formal contract, the US$250 million in cash he invested will soon begin to increase in value and recalculate a market valuation in the form of an Internet company.

After hanging up the phone.

Suri asked Secretary Amanda to contact Goldman Sachs Group and hire experts who are good at financing acquisition negotiations as soon as possible.

Last night I mentioned that I would try not to get involved in management work, but that is under the premise that everything is going smoothly.

For things like management candidates, how to divide the right to speak, and long-term development strategies, we must first reach a consensus to avoid fighting each other in the future.

As the second shareholder, I don’t have absolute say, and it’s clear that I will easily suffer losses.

This requires hiring several more board members and introducing third-party decision-makers to allow them to participate in specific decisions to prevent the parent company from making confused decisions.

At that time, the rights of board members should be written into the company's articles of association, so that they can act as lubricants and achieve some kind of balance.

For example, when there are differences between the major shareholder and the second shareholder and they cannot coordinate on their own, and the difference between the two parties' right to speak is very small, the board members can vote and make the final decision. Swing states of concern.

The entire market value of Netflix is ​​basically equivalent to his personal wealth.

Even founder Reed Hastings, who lost too much equity in his early years, is only worth about one-tenth of Suri's, so he doesn't have to worry about being easily dismissed.

There are many things to prepare for today.

Not caring about playing around with Miss Daddario, he gave her a secondary credit card and asked her to go shopping and buy some clothes and jewelry she liked.

This girl is quite sensible.

He declined the offer to go shopping alone and confiscated Suri's credit card.

I just want to be with him, be a little secretary who helps carry bags, and see the customs and customs of Silicon Valley...