I am Hollywood

Chapter 1006: Chapter 1008: The Return Journey



[Chapter 1008: The Return Journey]

Compared to other hectic schedules in various aspects of work, the planned agenda in New Zealand was originally the most relaxing.

Eric had complete confidence in Peter Jackson and didn't intend to intervene in the filming of the Lord of the Rings series. His intention for coming over was purely to experience the filming process of the trilogy while also getting some well-deserved relaxation. Once he returned to Los Angeles, with the start of Gravity's filming and post-production for Iron Man, he would soon be facing several months of busyness.

However, the situation with AOL thoroughly derailed Eric's expectations for his trip to New Zealand.

After arriving in Queenstown on Wednesday, New Zealand time, everything was in turmoil until Saturday morning. Eric spent just one weekend there before cutting his trip short and returning to Los Angeles.

...

Meanwhile, in New York, when AOL held a press conference on Saturday morning, local time, to announce that the company would continue to adhere to its original development strategy, alongside the news of Chris Hansen and two others resigning from their positions on the AOL board, media outlets erupted in shock.

The New York Times directly used the headline "The Complete Collapse of the Firefly System" to describe the event. However, many media outlets also speculated that Firefly Investment's relinquishing control over AOL could actually pose a significant crisis for the company.

After all, many people could see that Firefly Investment's complete withdrawal might mean they would gradually sell off their stocks. As the largest shareholder with over a 30% stake, if Firefly Investment began to dump their shares, the impact on AOL's stock price would be nearly catastrophic.

On the other hand, anyone with a modicum of sense wouldn't believe that both sides would continue to maintain the close cooperative stance as stated in the press conference. Without the support of the Firefly Media resources, AOL would directly face a shortage of content in its internet media business development.

Nonetheless, even though the two sides couldn't reach an agreement on AOL's development philosophy, Eric didn't deny that Steve Case was a highly capable professional manager.

In response to the unfavorable media environment AOL faced post-press conference, Steve Case promptly enacted a series of remedial measures. The next day, which was Sunday, following urgent discussions, Steve Case held another emergency press conference. He announced that to demonstrate confidence in the company's development prospects, the AOL management would raise $1 billion through methods such as mortgaging their shares to buy AOL stock back.

A company's management buying and selling stock undoubtedly best illustrated their stance on the future of the company. Steve Case's move immediately reassured many hesitant investors.

At the same time, Time Warner executive Richard Parsons also appeared at the press conference to jointly announce with Steve Case that Time Warner would establish a strategic partnership with AOL in terms of media content.

Typically, Richard Parsons, as the CEO of Warner Bros. under Time Warner, wouldn't be the face needed to support AOL's portal business, which primarily needed content support from news media. His appearance at the press conference seemed somewhat out of place.

However, media and investors with a sharper sense could clearly see that Richard Parsons was an executive associated with Gerald Levin, the major shareholder of Time Warner. His presence basically represented Gerald Levin's stance.

Before Time Warner Group's establishment, Gerald Levin was the helmsman and major shareholder of Time Inc., which owned a host of prominent print media, including the famous TIME magazine.

Even though Time Warner had been established for many years, Gerald Levin still maintained a strong influence over the print media owned by Time Inc., which was precisely what AOL urgently needed for its internet media business.

Moreover, Time Warner owned the largest cable news network in North America and possibly the world.

Even with company control disputes stemming from Ted Turner, there wouldn't be significant obstacles to media cooperation beneficial to the company, which Gerald Levin would want to foster. As long as AOL could partner with Time Warner, even with the complete breakdown in relations with Firefly Investment, they would still be able to acquire sufficient media resources.

Additionally, Richard Parsons' appearance at AOL's press conference reignited rumors on Wall Street and among major media outlets about a potential merger between the two giants.

The marriage of a storied conglomerate with a burgeoning internet media titan appeared to many as a strong union where one plus one could yield greater than two.

The capital market was far more blind than many ordinary people imagined. Following a series of favorable news stimuli, when AOL's stock reopened on Monday, it rapidly returned to the price level it had reached before Steve Case's interview in just two hours.

By the end of the day, AOL's stock price had soared to $262.39, a staggering 11.2% rise from its opening price of $235.76, bringing AOL's market cap to $43.294 billion.

Driven by AOL's stock price surge, the NASDAQ index finally broke through the 2000-point barrier, with the market landscape looking very positive.

In light of this situation, the shareholders of AOL, apart from Firefly Investment, were undoubtedly the most conflicted.

The reduction of Firefly Investment's shares in AOL was now irreversible. To prevent AOL's stock price from plummeting or crashing as a result, other shareholders had to buy up the shares that Firefly Investment planned to sell off.

In last week's video meeting, Eric had made an offer of $4 billion for the impending 10% stake sale, adamantly refusing any discounts. Yet, AOL's market cap before the emergency suspension of trading had only been $38.9 billion, so the other major shareholders naturally rejected the idea of purchasing the $16.5 million shares from Firefly Investment at that price.

But merely on the day trading resumed, AOL's market cap surpassed $43 billion.

According to Eric's thinking back then, if they wanted to proceed with the transaction now, the price would have to be recalculated at $4.3 billion. Just in three days, that meant an additional $300 million payment, which would sting anyone's pocket.

Eric was already on a flight back to Los Angeles at that time, leaving the representatives of the major shareholders to probe Chris. On this matter, Eric was incredibly resolute, giving Chris no autonomy, and thus their inquiries yielded no results.

And so it was until the next day.

Following the usual market trends, after AOL's stock experienced a rebound the previous day, most people expected a drop today. Yet reality brought joy mingled with great distress to many shareholders:

AOL's stock not only showed no sign of decline but instead rose another 3.1% the next day, bringing its market cap to $44.636 billion and pushing it toward the $45 billion mark.

Even some minor shareholders who predicted that AOL's stock might have peaked began secretly dumping millions of shares, which did nothing to halt this powerful upward trend.

Apart from Firefly Investment and the management's shares, AOL's other shareholders mostly consisted of major investment banks and state retirement insurance funds across America. These institutions, while they might not hold stocks long term, generally held onto them for much longer than those hedge funds seeking short-term gains -- they were also the mainstay of the U.S. stock market capital.

Due to the nature of these capital firms, particularly the state retirement insurance funds, their investment principles favored caution. Given the increasingly evident bubble component of the NASDAQ market, brokers for these investment institutions would naturally consider taking profits while AOL's stock was high.

Yet in the face of Firefly Investment's resolved stance on significantly offloading shares, these investment firms found themselves needing to patiently hold off on their intentions.

Everybody understood that a collaborative sell-off would only result in everyone walking away empty-handed. If AOL's stock crashed, even Firefly Investment's losses of tens of billions to over a hundred billion wouldn't severely affect the firm holding assets exceeding $200 billion. However, for other investment institutions, losing even a few million dollars in stock could jeopardize many livelihoods.

In the current scenario, they would first need to take up the 10% of Firefly Investment's shares before they could have six months to gradually sell off their holdings.

Of course, a key premise here was whether the related managers could endure the temptation of AOL's continuously rising stock price. After all, most were caught in a "maybe it can go up some more" expectancy, only coming to their senses to regret it once the market crashed.

As a result, when Eric's private jet touched down at Los Angeles International Airport on Tuesday afternoon, John Mack, president of Morgan Stanley and the chosen representative for the shareholders, also arrived in Los Angeles.

...

Despite over ten hours of flight, Eric didn't feel the fatigue of long-distance travel thanks to the luxurious comfort of the private plane. After catching a few hours of sleep on the flight, arriving under the sunny skies of Los Angeles lifted his spirits significantly.

He gave two female assistants and a group of bodyguards time off, sending them on their respective ways. When Eric returned to the Liberty City manor, he received a call from John Mack, who was already waiting outside the estate.

Though he was hesitant to deal with people at that moment, Eric couldn't avoid a confrontation when someone was waiting at the door.

After getting out of the car at the manor's entrance, Eric approached John Mack and shook hands with him as they strolled into the estate together.

Walking side by side along the tidy path to the Shell Villa, John Mack surveyed the intricately landscaped lawns and exclaimed, "It looks even more beautiful here compared to a few years ago."

Eric seldom entertained guests at the manor, but he had hosted a business party aimed at major investment banks and fund managers during the process of selling Disney's animated division and acquiring Marvel a few years prior, an event where John Mack had also attended.

"John, you could buy a manor in Los Angeles as well; it wouldn't be bad to come and relax on occasion. The environment here is incredibly refreshing," Eric suggested.

John Mack shook his head with a wry smile, "Maybe I can do that once I retire."

As they chatted, the twins came running to greet them, calling their master in unison before trailing alongside Eric.

While John Mack held a high position surrounded by women, he couldn't help stealing glances at the identical and stunning twins, somewhat envious of Eric's good fortune.

Eric had no intention of introducing the twins to John Mack and simply asked, "Where's Drew?"

Natasha replied, "The boss is at the office. She will come over after work."

Eric nodded and said, "Please help me prepare a pot of coffee for Mr. Mack. My luggage is in the car with everyone's gifts, which Carly has already organized. You two also have gifts; just look for the ones with your names on them."

...

After giving his instructions, Eric and John Mack settled into the seating area by the glass wall of the villa, exchanging casual chats until the twins brought in the coffee. After pouring for both men and leaving, Eric finally relaxed into the sofa holding his coffee cup and asked, "So, John, what brings you here this time?"

John Mack offered a rueful smile and said, "Eric, you know deep down, it's about AOL's stock situation."

"I just got off the plane," Eric shrugged in response and queried, "What was the closing price today?"

"$270.52," John Mack replied, "which is about a 3% increase from yesterday."

Carefully sipping his coffee, Eric commented, "It seems it's time for a stock split. I believe a direct ten-for-one split would be appropriate; there's still plenty of room for growth in AOL's stock price."

"Since that's the case, Eric, why are you so insistent on selling?" John Mack inquired.

"Everyone..." Eric paused, "If the direction isn't right, the current brilliance will ultimately be just fleeting."

"Eric, none of us knows what the future will look like. How can you be so sure that AOL hasn't found its proper direction?"

Eric turned to gaze at the vast, blue ocean beyond the glass wall, seemingly a bit distracted. "Yes, indeed, so we can only adhere to what we believe to be the right path. I have my convictions, Steve has his, and you all have yours. With everyone holding differing beliefs, forcing them to come together would only pull each other down, so it's better to separate."

Sensing Eric was intent on diverting the topic, John Mack broached the purpose of his visit. "Eric, regarding the price you offered last week, how about a 10% discount? We could finalize the transaction within a week with cash payment."

A smile spread across Eric's face as he replied, "John, have you noticed the fluctuations in the Russian ruble recently?"

John Mack blinked in confusion, wondering why Eric had suddenly brought this up. He shook his head, "Eric, I'm not involved with currency matters; is there an issue with the ruble?"

*****

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