Hollywood Hunter - Chapter 1684

After following up on CNOOC's second IPO, everything went smoothly. After spending the weekend at Dumeijia Manor on the west coast, Chen Qing set off to return to China in the new week.

Simon also flew to the East Coast again.

This is October 9, 2000.

on Monday.

There is less than a month left until the 54th US presidential election on November 7.

Boarding the private plane at 8 o'clock in the morning on the west coast, because of the time difference, Simon arrived in New York, and the time was already more than 2 o'clock in the afternoon on the east coast.

Leaving the airport, Simon did not rest and drove directly to the Cersei Capital headquarters in Rockefeller Center in Midtown Manhattan.

The office floor of Apollo Management, a subsidiary of Cersei Capital, where Leon Black, the president of Apollo Management, is already waiting, along with AOL's CFO named Rock Delkins.

A meeting agreed in advance was about a financial audit report that Simon received over the weekend.

The audit object was a 'famous' name in Simon's memory: Enron Corporation.

In the past, the Enron financial scandal not only led to the largest corporate bankruptcy in American history up to that time, but also triggered a series of chain reactions, one of which was the collapse of the new technology wave, which was once again severely punished. He took a sap, triggering another round of plunge in the Nasdaq index.

After the history was changed beyond recognition by the big butterfly Simon, he had forgotten about it. Unexpectedly, the Texas-based company took the initiative to connect with the Westeros system.

First of all, I have to mention Enron, which is an energy company headquartered in Houston, Texas, established in the wave of corporate mergers in the 1980s. It was mainly engaged in natural gas business in the early days and has a huge natural gas pipeline network in the southern United States.

In 1985, after Enron was established, it began a long-term continuous expansion from uninterrupted to the present, and its business shifted from natural gas to electric power, water affairs, papermaking and other fields.

After the rise of the new wave of technology, Enron stepped on the pulse of the times and entered the field of telecommunications, mainly involved in the broadband infrastructure business, so it had an intersection with AOL.

In order to accelerate the expansion of its own network and reduce costs at the same time, in some southern states and counties, AOL chose to lease some of Enron's broadband lines, and also cooperated in some aspects such as marketing and after-sales.

That's where things started.

As the Nasdaq index continues to soar, Enron, whose own business also has a new technology label, has a recent market value of more than 70 billion US dollars. In just the past two years, the company's stock price has increased by nearly 300% , equivalent to the previous decade's increase.

On the other hand, in the quarter from April to June 2000, Enron's single-quarter net profit was US$163 million, and the estimated annual net profit is only about US$650 million, which means that the company's price-earnings ratio has been It is more than 100 times exaggerated.

At the peak of the current Internet bubble, as a new technology concept stock, the price-earnings ratio of more than 100 times is actually quite normal.

The problem is that Enron is not satisfied, so it has recently come up with a plan to invest 3 billion US dollars in the telecommunications field in the next two years. It plans to further expand its own broadband network, and even plans to connect the network cable to Mexico.

Enron itself cannot afford a huge capital of three billion US dollars. Even though the company claims to have an annual revenue of 100 billion US dollars, natural gas sales, which is the focus of its revenue, is actually a low-profit field due to price control.

Therefore, only external financing can be obtained.

Even though the Nasdaq has taken off and left too many people feeling shaky, there is still a rush of potential investments when it comes to new technology.

That includes the Westeros system itself.

AOL cooperated with Enron, and got the materials right away. The two sides approached each other and introduced Apollo Management Company, which is mainly responsible for investment and mergers and acquisitions under Cersei Capital, into the bureau.

However, compared to AOL or other crazy investors who are dedicated to throwing money into the field of technology stocks, as a Wall Street veteran, the team led by Leon Black began in the 1980s, from junk bonds to capital hedging, from vulture investment to super Mergers and acquisitions, countless ups and downs, I have seen too many ways to play, so I quickly discovered the problem of Enron.

big question.

The first is the telecommunications business related to this expansion. After all, to expand, of course, investors must look at their investment results in the past few years.

A conference room of Apollo Management Company.

Leon Black explained some of these joints to Simon himself: "We have invested in the Internet industry in many ways, so we are very clear about the proportion of investment returns in related fields in recent years. However, according to the data given by Enron, the investment income is Some of them are obviously much higher than our similar investments, and there happens to be some data from AOL, we compared and found the problem right away, Simon, look here…”

Having said that, Leon Black brought up a page of PPT on the big screen in front of the conference room, with some tabular data on it, and continued: "...A broadband network lease agreement between AOL and Enron in Austin, Texas, stipulates that It is 5 years and 35 million US dollars, paid in installments, but Enron deliberately erased the 5-year contract period from the financial data. For those who do not know the truth, they will subconsciously think that the agreement between Enron and AOL is 1 year, 35 million US dollars, This is equivalent to indirectly increasing the financial report by 5 times. Moreover, this is only a small measure. After more in-depth research, we found that Enron's public financial report is not only about telecommunications, but also other main businesses such as energy and electricity. Fake data, such as including a large number of forward sales contracts that may not be realized in revenue, such as placing multiple debts in the name of subsidiaries to whitewash the parent company's balance sheet, and so on. It is only in the past five years that Enron has From $13 billion to $110 billion in revenue, an increase of more than 8 times. Through recent investigations, I am sure that at least half of the revenue figures are absolutely false.”

After Leon Black finished speaking, he returned to the conference table and sat down, looking at his boss, who was leaning on the office chair, tapping on the table with one hand and resting his cheek with one hand.

Simon waited for Blake to sit down before he said, "Which is Enron's accounting firm?"

"Andersen," Leon Black said, quickly flipping through the documents in front of him and pushing a folder over: "Andersen's Houston branch has received $25 million and $2700 from Enron in the past two years, respectively. The $10,000 audit fee is equivalent to 30% of the firm’s division’s annual revenue and 70% higher than the normal rate.”

Seal fee.

This idea flashed through Simon's mind for the first time.

Listed companies in the United States, according to the requirements of color C, all have a connected third-party accounting firm, which can be regarded as a means of supervision.

However, now it seems that it is obviously useless.

Ah.

Thinking of a series of companies under his own, Simon raised his mouth slightly and smiled silently.

It would have been of no use.

Therefore, there is no need to ask more about the board of directors, and it is nothing more than a community of interests that does not play any supervisory function.

As for why Enron's management was so frantic about making false accounts, even if they didn't have the memory of the past, based on what Simon had seen and heard over the years, it was not difficult to understand at all.

In the end, it's still profit.

The income of corporate executives, especially those of listed companies, is usually directly linked to the company's revenue, stock price, and other figures. The brighter these figures, the higher the remuneration they get.

Thinking of this, Simon simply flipped through the document that Leon Black pushed over.

In addition to the details of the cooperation with Arthur Andersen, one of the five largest accounting firms in the world, there is also the information of Enron's board members, including the interests of some of the so-called independent directors and Enron-related non-profit organizations.

Obviously, An Ran's matter has been thoroughly investigated here.

Looking up at Leon Black and AOL's chief financial officer, Locke Delkins, and noticing that both of them had some anticipation in their eyes, Simon asked again: "Who knows about this? "

Leon Black said: "We have no more than one pair of hands on both sides, and confidentiality is no problem."

Simon nodded slightly.

What's at hand is definitely not just a matter of the Westeros system avoiding an investment trap.

Simply put, it's a bomb.

As long as the Westeros system throws this bomb, once it is detonated, it will not only blow up the Nasdaq, which is already at its peak, but also affect the voting in the upcoming US presidential election. And move the whole body.

As for your own side, what benefits can you get?

Great benefit!

Just like Simon's operation in 1987, two words, go short.

If the Enron bomb is thrown, it will not only blow up the Nasdaq, but there is little chance that the New York Stock Exchange will survive.

As long as the Westeros system builds enough short positions around relevant trends, it is easy to reap billions of dollars in huge profits in a short period of time.

Of course, the premise is that you must be careful, and you must not let people know that this is the handwriting of the Westeros system. Otherwise, you may not be able to figure out how many enemies this one has created. Maybe one day, secretly Someone reported a few stumbles.

His fingers jumped and tapped on the smooth conference table for more than a minute, Simon finally retracted his thoughts, closed the folder in front of him, and said to Leon Black: "You will contact Jim later, and the arrangements can be made. Start building shorts sensibly, but, without me reminding you, you should understand that my only request is to keep it as secret as possible."

Jim, of course James Raybold.

Such an opportunity, after all, is a potential short-selling profit of tens of billions of dollars. If Simon let it go, it would be really difficult to explain to the people below.

Then go with the flow.

However, after the consideration just now, at least before the general election next month, Simon does not intend to release the news.

Obviously, when this news is released now and bursts the new technology bubble, to some extent, it is definitely not conducive to the election of the Democratic Party.

However, things are not absolute.

After all, Enron is a Texas company, and as a Republican presidential candidate, Bush Jr. is currently the governor of Texas.

The Enron scandal burst the new technology bubble, and it will take some time for the stock market to hit voters. Even if the news is released tomorrow and it really has an impact, perhaps the general election has already ended. However, on Al Gore's side, he could immediately find an excuse to attack George W. Bush's unfavorable financial regulation of Texas companies.

Immediately affect Bush's approval rating.

In short, this bomb exploded immediately, and it was hard to say who would kill the deer.

Just remove this variable.

In any case, after several months of campaign sprints and less than a month before the general election, George W. Bush's spending rate has been on par with Gore since he was initially left far behind by Gore.

As to why.

very complicated.

Perhaps it was Clinton's eight years in office, even if the results were very good, that eventually made the public feel a little tired. Coupled with the various scandals of the current president, it still affects his old partner who has worked with him for eight years.

Perhaps, there is also the campaign strategy of both sides.

Under Simon's secret operation, new technology and the Internet have not become the focus of this election. After all, if you are not careful, the flames may burn to the Westeros system. Simon will not allow such a thing to happen.

However, there are still many topics to discuss.

such as health care reform.

Clinton was in office for eight years and successfully implemented a new health care bill.

For those who don't know where they are, the health insurance bill should definitely benefit more people. In fact, just as the previous medical reform brought more unnecessary burdens to the public and national finances, Clinton's medical reform, because of its emphasis on subsidy at the bottom, increased the burden on the middle class, and actually aroused the dissatisfaction of many people.

Another example, tax cuts.

This is a big killer.

Regarding taxation, when the Democratic Party is mentioned, the public's first impression is often a tax increase.

Republicans, of course, tax cuts.

Now that Clinton has been in office for eight years, the national finances have seen a rare surplus. From the perspective of the Republican Party, the next step, of course, is to cut taxes and reduce the public burden. Bush Jr. also took this as a platform and attracted a lot of support.

In comparison, Al Gore is unlikely to deviate too far from the overall policy direction of the Democratic Party, so he seems to be tied.

All in all, it's still similar to Clinton's slogan back then.

The problem is always the economy.

To a certain extent, as Clinton's successor, Al Gore would not be able to go the other way, even if he did not want to follow suit, which gave Bush a chance with a more flexible strategy.

Changes in people's minds are also considered natural.

Just like in reality or in stories, people who have too many good days can't help but toss.

The result of various reasons is the current situation where the two sides are evenly matched.

However, this is only an appearance.

Through various operations, in some key swing states, Bush Jr.'s approval rate has a faint tendency to suppress Gore, especially in Florida, which Simon has been paying close attention to. As long as history does not change much, this time, Buddha There will be little suspense about where the state votes will go.

After all, there is a memory of the past, and the Westeros system has invested enough in Florida. Therefore, the election result of this key swing state can basically be determined. There is no doubt that the winner is not George W. Bush. A narrow lead of a few hundred votes in a judicial battle.

Now that the overall situation has been decided, the best strategy is to seek stability now.

Enron's bomb can only be put on hold for the time being.