I am Hollywood

[Chapter 1005: Sudden Attack]

In facing the impressive box office numbers of The Matrix Reloaded during its opening week, the media's mocking and sarcastic tone only managed to stir up a wave of schadenfreude towards Firefly Entertainment. However, it failed to cause any substantial negative impact on Firefly. In fact, this media commentary inadvertently boosted the sales efforts for the corporate bonds Firefly was preparing to issue the following month.

The management had always remained under Eric's control, and everything seemed to be running smoothly. Eric had hoped that some of the minority shareholders of the group would express their opinions, preferably so upset that they would sell off their shares, but, unfortunately, that did not happen.

Consequently, Eric was not fazed by the media's varied opinions on The Matrix Reloaded's box office performance or the ensuing pessimism surrounding Firefly Group.

...

However, upon reaching Queenstown, New Zealand, and settling in, Eric received news that infuriated him. Steve Case had completely disregarded the consensus that had been formed and brought the dispute between the management and Firefly Investments -- its largest shareholder -- into the media spotlight.

This incident occurred on the morning of Tuesday on the East Coast of North America, when Steve Case gave an exclusive interview. Eric had just arrived in Queenstown, which was Wednesday morning local time. The East Coast was 16 hours behind New Zealand, meaning that when Eric received the news, it was still Tuesday afternoon in New York, as the New York Stock Exchange had just closed for the day.

At a private resort on the outskirts of Queenstown, Eric ended a call from Chris, who had personally reached out to him, and spoke to Tim Sanders, the producer responsible for the Lord of the Rings project in New Zealand. "Tim, just continue with your work as usual. I may not make it to the set today, but I'll call Peter directly later."

Although it was the coldest month of the year in New Zealand, it did not impact the filming of the Lord of the Rings crew. The basic daily expenses for the hundreds of crew members amounted to hundreds of thousands of dollars. Therefore, Eric had specifically informed Peter Jackson not to alter the shooting schedule in light of his arrival. At that moment, Peter Jackson and his team were filming outdoor scenes near Lake Wanaka, approximately forty kilometers north of Queenstown.

Tim Sanders, having just been with Eric, nodded and said, "Alright, I'll take my leave then. Eric, if anything comes up, don't hesitate to call me."

...

After seeing Tim Sanders off, Eric returned to the living room of the villa, where Caroline was standing by the fax machine on the phone, and Mayer approached him holding a notebook, presenting it in front of Eric.

The screen of the notebook was displaying a video interview with Steve Case.

"I am grateful for the unwavering support the Firefly system has given to AOL over the years, but that does not justify abandoning our corporate development philosophy. A corporation should have its own culture and soul; without these, it is destined to be a mere puppet of capital. All evidence proves that such corporations struggle to grow. It's precisely because we had a clear vision for this company that AOL transformed from a small operation with fewer than 100,000 users to the Internet giant it is today, with nearly 15 million users nationwide," Steve Case said earnestly on screen. "Thus, if the shareholders insist on forcing us to abandon our corporate values, we have no reason to continue in this company."

In the studio, the glasses-wearing host nodded in agreement and asked, "So, Steve, when you say 'we,' are you referring to those individuals?"

"Just myself, President Robert Pittman, and twelve department heads in operations, marketing, finance, etc. If we cannot reach a consensus with the shareholders moving forward, we will collectively resign," Steve replied.

The host showed a surprised expression, leaning slightly forward to ask, "Steve, as I understand it, you are also a shareholder of AOL. Surely, you realize that if the management team collectively resigns, it would cause immeasurable damage to the company's stock price, also harming your personal interests. Have you considered this outcome?"

"Yes," Steve Case replied. "However, I would rather uphold my ideals than focus solely on wealth."

On the screen, the host smiled appreciatively and said, "Alright, now let's watch a video that highlights the legendary rise of AOL over the years."

...

Eric stood in place, furrowing his brow as he looked at the video playing on the notebook screen in Mayer's hands. Just then, the phone he had just put in his trench coat pocket rang again.

Indicating to Mayer that she could take the notebook away, Eric answered the phone, and it was John Mack, the president of Morgan Stanley.

Morgan Stanley also operated a massive stock-investment division and was one of AOL's major shareholders, holding about 2% of the company's stock. Previously, under Chris's persuasion, Morgan Stanley had agreed to side with Firefly Investments during the shareholders' vote. However, following Steve Case's almost reckless move, it was clear that Morgan Stanley was struggling to maintain a calm facade.

As Eric spoke with John Mack, Caroline passed him a freshly organized document, which was AOL's stock price chart for Tuesday in the U.S.

As the founder of AOL and a pivotal figure in growing its value to over $40 billion, Steve Case wielded significant influence over AOL, affecting a wide array of shareholders, especially with the entire management team proclaiming their solidarity with him.

Thus, after the interview was broadcasted, the Nasdaq market reacted sharply to the potential collective resignation of Steve Case and the AOL management team.

Throughout the trading day, AOL's stock price plummeted by 6.5%, lowering its market cap from $41.5 billion at open to $38.9 billion. In just six hours of trading, the company's market cap evaporated by $2.7 billion.

Even the Nasdaq index, originally predicted to break 2000 points that week, suffered as well. The overall market dropped from 1973 points to 1935 points, and several previously high-performing tech stocks experienced varying degrees of decline alongside AOL's plummeting stock price.

Hearing the anxious tone in John Mack's voice, Eric responded, "John, perhaps Morgan Stanley lost over $50 million, but based on our holdings, Firefly lost $1 billion today. Do you think I would sit idly by?"

Firefly held a total of 35.7% of AOL's shares, meaning Steve Case's actions resulted in nearly a $1 billion paper loss for Firefly.

Even though many were aware that AOL's actual value was nowhere near that much, a loss in the billions in a single day still stung. Wall Street funds, whose primary focus was stock investments, reacted even more intensely to millions or tens of millions in losses in the short term compared to Eric, who prioritized long-term growth.

After patiently conversing with John Mack for a while, Eric hung up the call, and his phone rang almost immediately again. This time, it was John Bogle, founder of the Vanguard Group, which held assets exceeding $200 billion on Wall Street. Though his tone was polite, he explicitly expressed that he hoped Eric would change his mind and quickly defuse the situation, also voicing concerns about the Nasdaq index possibly crashing.

Eric shared this concern, making him even more displeased with Steve Case's behavior.

...

It wasn't merely the $1 billion paper loss that frustrated him, but rather the blatant disregard for the bigger picture in order to maintain personal power. Initially, both parties had reached an agreement to keep the matter within AOL.

On the upcoming temporary shareholder meeting on June 29, regardless of which side won, the other side would be expected to step back to ensure the company's development.

Yet Firefly Investments, holding 35.7% of AOL shares, already had enough stock to maintain control over the company, much like the Murdoch family behind News Corporation and Viacom, which held about 30% in their respective media groups.

Consequently, Firefly was highly likely to win in the shareholder vote. If not for Steve Case's status as AOL's founder and his impressive track record as CEO over the years, Firefly wouldn't even need to hold a shareholder meeting to oust Steve Case.

Nevertheless, even so, Firefly would only need to court an additional 15% of the shareholders to gain control of AOL.

During this time, due to his close relationships on Wall Street, Chris successfully garnered promises from many fund managers holding shares of AOL to support Firefly. It seemed that sensing his disadvantage, Steve Case decided on today's drastic measures.

In many ways, it was a gamble.

Due to the pressure from AOL's plummeting stock price, most shareholders might have to momentarily compromise with the management. However, Steve Case's actions, utterly disregarding the interests of all involved, were bound to be harshly remembered by Wall Street investors. It would be exceedingly difficult for him to regain their favor in the future.

Of course, if AOL could remain strong, Steve Case could maintain an authoritative figure as a corporate manager and need not worry about Wall Street's scrutiny. After all, Wall Street was always interested in those who could bring them tangible benefits.

Yet Eric understood something others did not: that if AOL continued down Steve Case's current path, its collapse in the coming years would be catastrophic.

On Eric's first day in New Zealand, he spent most of his time on phone calls.

There was no immediate way to resolve this matter, so to prevent AOL's stock price from crashing further the next day, the board urgently sought a temporary trading halt from the SEC, promising the frenzied media and investors that they would hold a press conference before next Monday to announce the final resolution of the incident.

Flying back to New York from New Zealand, although the journey was slightly shorter than from the UK to New Zealand, it still took about 20 hours, effectively an entire day. Therefore, Eric decided not to rush back. Instead, he kept an eye on the production progress of the Lord of the Rings trilogy while frequently maintaining close contact with Chris and others back in New York.

...

Finally, on Saturday morning in New Zealand, which was Friday afternoon on the East Coast, after a few days of intensive negotiations, the major shareholders, board members, and management of AOL gathered in the conference room of their headquarters in New York, while Eric participated in the meeting via video call.

Feeling the shock from AOL's management about the plummeting stock price due to the threat of a mass resignation, many shareholders, initially leaning towards Firefly, had shifted their positions within the past three days.

If only Steve Case were to leave, provided the arrangements were sufficient, AOL wouldn't sustain much damage. But if the entire main management exited, it would plunge the company into a prolonged state of chaos, leaving even highly capable replacements unable to restore AOL to its previous state anytime soon.

Amidst the backdrop of major telecommunications companies and operating system giant Microsoft setting up ISPs, years of turmoil for AOL would likely allow their formidable competition to close the gap significantly. The advantages AOL had accumulated over the years in the ISP sector could potentially vanish, even leaving it in irreparable decline.

Eric had never placed too much emphasis on AOL from the start; his main interest was in leveraging AOL's inflated stock price during the tech bubble as "currency" to acquire a traditional telecommunications company, thereby solidifying AOL's foundation and providing essential support for the previously determined information industry alliance plan.

However, the current situation made those original plans moot. Eric decisively chose what was most advantageous for himself.

In the study of the vacation villa, Eric activated the monitor on his desk. He was facing the large conference room at AOL's New York headquarters, where representatives from various sectors sat along the oval table. Eric could see Steve Case on the other side, and the other representatives were looking back at him.

Taking the prepared folder from Caroline, Eric opened it, glanced at the screen, and said flatly, "I've been a bit tired these days and have a lot on my plate today, so let's keep this brief. Oh, I'll go first; you all listen."

In the New York conference room, a large-screen projector was in use. Chris, who was seated next to the projector, heard Eric's words and shook his head with a slight smile.

The other business elites from various fields gazed at the somewhat condescending young man on the projector screen. Although they felt some discontent, they were more anxious. This meeting concerned AOL's future and whether their stocks would continue to appreciate.

Even though many matters had been pre-arranged, when it came to the moment, many feared Eric might change his mind suddenly, and he certainly had the capacity to do so. Even Steve Case, who tried to act composed, felt his heart racing more than usual.

*****

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