Chapter 1174 – The proud Jerry Sanders
An American, with white hair and beard and neatly dressed, is sitting opposite Feng Yu. This man has a confident look despite the fact that he is facing the World’s Second Richest Man.
Ralph said. “Mr. Sanders, my Boss, is interested in your company. This is not the first time I had contacted you, and we had met several times. Previously, your company’s market value is around 70 billion USD. But now, I think it is worth only around 20 billion USD, right?”
Ralph is asking Jerry Sanders if he had regretted his decision. We had only wanted 51% of the company’s shares with our previous offer. But now, we can buy out AMD with less than the amount we offered!
Sanders smiled. “Feng, I had never doubted your intention to acquire AMD. I believe you will make a reasonable offer, but I had founded AMD, and it is very important to me. Will you sell the company you founded to someone else? Although the company’s value had shrunk, the company is still making profits.”
This old man is not easy to deal with. That’s right. Although AMD’s value had shrunk more than many other companies, what Sanders said is true. AMD is still making profits. Their last year’s profit is more than 1 billion. The expected profit this year is more than 3 billion USD, despite the global economic downturn.
My company is making money, and I will not sell it even if the share prices plunged. Anyway, I am not suffering any losses. It is the ones who had bought the shares that are losing. When the share prices rise, I can sell away the non-voting shares to make money or keep them for dividends.
AMD is different from those internet companies. AMD has physical products and is doing well. Although Intel had suppressed AMD in CPU and Intel owns almost 90% of the market share, but so what? Intel does not dare to let AMD close down, or else a monopoly is formed. Intel will face heavy fines and might even be forced to split!
“Sanders, AMD had only started to make profits last year. If it’s not for the internet bubble, your company would have been bankrupted a long time ago. I am not afraid to tell you that we had secretly acquired your company’s shares. Although the transaction is not completed, we had signed the contract. With these shares, we will be the biggest shareholder of AMD other than you.” Ralph smiled.
Yes, you had founded the company, but you don’t have the fund to develop and had to accept a few rounds of investments and venture investments to prevent the company from going bankrupt.
You don’t want to sell the company’s shares, but you cannot stop others from selling. Especially those banks and financial institutions. The stock market had crashed, and many financial institutes had suffered massive losses. They needed cash urgently to minimize their losses.
Feng Yu took this opportunity to get Ralph to sign contracts with several investment companies for the shares of those interested companies. The price will be 120% of the share price on the transaction date.
When the US stock market started its recovery, AMD’s share prices had recovered slightly. Those financial institutions thought they had gained an advantage. But as more companies got implicated after WorldCom and Arthur Anderson scandals, the US market crashed again. AMD’s share prices plunged again.
Intel’s value fell from over 500 billion in 1999 to slightly more than 300 billion USD!
The shareholders that thought they had taken advantage of Feng Yu were now suffering losses. 120% of the transaction date’s share price is at least 10% lower than the share prices previously!
But the contracts were signed, and the transaction must be completed by the end of the month. The financial institutions were in a rush to complete the transactions, but Ralph is taking his time. The financial institutions were the ones who insisted on this flexibility. Now, the longer Ralph drags, the more Wind and Rain Holdings will benefit.
It’s a pity that some shareholders refused to sell their shares like Sanders. If Feng Yu managed to acquire all the shares, he would own 49% of the company. Sanders might own 51% of the company, but Feng Yu can still stand up against him.
Of course, other than some non-voting shares which were part of the agreement with the shareholders, Ralph had not bought a single share from the market. AMD’s share prices are still dropping, and if it wasn’t for the voting shares, AMD’s ordinary shares are not worth buying!
Ralph thought Sanders will be shocked to hear they will be the company’s second-biggest shareholder. But Sanders doesn’t seem to care.
“Oh? So what? I am still the biggest shareholder, with a 51% share of the company. You had also said that our company had been making losses until last year. I had not sold my shares when the share price is high. Do you think I will sell the shares at this price now? In fact, I am preparing to buy more of the company’s shares. Maybe in a few days, I will own more than 51% of the company.”
Ralph’s face changed. Sanders must have persuaded that shareholder, which Ralph could not convince, to sell him the shares. But Ralph had made a high offer. Did Sanders make a higher offer?
Ralph thought for a while. It should be this shareholder is wary or even unhappy with Ralph. After all, the other shareholders were indirectly tricked by Ralph, but it was due to their greed.
If Sanders becomes the biggest shareholder, it will not be easy to deal with him. After all, Ralph had only acquired almost 30% of the voting shares.
Feng Yu laughed suddenly. “Sanders, you are old.”
Sanders’s face changed. “Feng, what is the meaning of this?! Are you mocking me?”
“No. I am saying you had lost your ambition. Under your leadership, AMD will remain in Intel’s shadows forever. Yes. AMD’s profits will be high this year, and your latest processor will be selling well. But have you thought about the difference between AMD and Intel? The gap is more than ten times in sales, profits, and the company’s value. Are you satisfied with 10% of the market share?”
“I had just cooperated with Bill Gates to develop a gaming console not long ago. A company named Sega had owned 10% of the gaming console market share. I believe you had heard of this company. At the end of last month, Sega announced they had sold their gaming business to Nintendo because they could no longer afford the operations. This is what happens when you own 10% of the market share!”
Jerry Sanders (businessman)
