Chapter 31

"Alright, what about the mortgage issue?" Li Xu suddenly changed the topic, and his interest seemed to wane.

Old Edward was a bit puzzled but still gave an answer: "I only discussed it with Parker and the others. They also praised it as a brilliant idea, but if we want to try it, we'll have to wait a bit longer."

"Is it an internal issue at Stanley or the new president's economic reform?" Li Xu rolled his eyes inwardly. After all this time, you took the CDO idea to win over Gilbert.

Well, it's not exactly winning over. As mentioned before, his father and Baldwin's group had a relatively good relationship, and they rose to power after the "Rude Six" seized control. Plus, there's the "Morgan" identity—now not many people know about it, but the old men like Hardrow Stanley and Henry Morgan still do. Of course, whether they acknowledge it is another matter.

So, naturally, they are close to Gilbert and others, and communication is smoother. Now, with a common interest—think about it, if Gilbert replaces Baldwin and quickly achieves results, what would his position at Stanley be like? No wonder Father is so confident.

Bankers are not a job for ordinary people. Li Xu felt more and more like sighing. If it were him, even if he could think of a method, he couldn't possibly come up with it in such a short time. From when he proposed the CDO idea to now, only a few days have passed.

"Both," Father continued, "and even if we establish a department, we probably won't invest too much."

"Oh?" Li Xu was somewhat surprised.

"We need to ensure profits and not rush in blindly. After all, Morgan Stanley is a responsible investment bank," Father said solemnly.

Pfft, fooling who? Li Xu sneered inwardly. Isn't it just the strategy of making a fortune quietly?

The name "banker" sounds impressive, but what do people really think of them? Greedy, shameless, profiteers, vampires, speculators, and people who profit without effort.

Especially after 2008, the Occupy Wall Street movement gained momentum. The subprime crisis made people hate Wall Street financiers, especially Goldman Sachs, which got out of the storm early. The French film "The World According to Goldman Sachs" thoroughly blackened them.

However, Goldman Sachs cooked the books for Greece, and Stanley did the same for Italy. Goldman bought a large amount of CDS before the subprime crisis to save itself, and Stanley did the same. But how many documentaries have targeted Stanley?

"The Inside Job" is quite sharp, but it only criticizes investment banks in general. Goldman is still the main target, while Stanley is barely mentioned.

To be honest, if it weren't for the books and documentaries recommended by a trader friend in his previous life, which he can now recall, he might have been fooled by his father.

Their actions are no less than Goldman's, yet their reputation is much better. This is the true portrayal of Morgan Stanley. They always let others take the lead and then quietly follow, waiting for the others to fail before they come in to claim the biggest piece of the pie.

Wait! Li Xu suddenly narrowed his eyes, recalling something about Michael Milken. Though many conspiracy theories are baseless, unless you're in the middle of it, who knows how things really developed?

"So, what about our plan, Dad? That will require a lot of funds," Li Xu decided to temporarily drop the topic. After all, there are still seven or eight years, and he can observe slowly.

"Don't rush. You said it yourself, it's a long process, and Steve Ross is not easy to fool," Old Edward said calmly.

Steve Ross is the current head of Warner. Since he took over in the 1970s, Warner, one of the seven major Hollywood studios, has experienced a relatively stable development period.

Ross is willing to invest time and effort in film production, though he is relatively conservative, and the profits are not particularly high. However, at least it's not as volatile as other major studios.

In this era, before video tapes fully entered the home market and peripheral development was still crude, box office revenue was still the main source of profit for studios. So, the failure of a film like "Heaven's Gate" could push United Artists to the brink.

It can be said that this stable development laid the foundation for Warner Bros. in the 1980s and ultimately led to its merger with Time Inc. in 1990, making it one of the two major studios in Hollywood that developed into a media group on its own, unlike Fox and Paramount, which were acquired.

Of course, if it were just stable development, Steve Ross couldn't have led Warner Bros. to its historical position. He had other means, and you can tell from the title of his autobiography: "The Takeover King"!

Mergers and acquisitions were the main theme of the U.S. economy in the 1980s. As mentioned earlier, there were over 300 media companies at the beginning of the 1980s, but by 20 years later, they were mostly owned by seven or eight large media groups.

There are many reasons, but in short, the deindustrialization policy led the U.S. government to loosen regulations on Wall Street, and companies used leverage to make various acquisitions, both friendly and hostile.

Ross had the skills and connections with Wall Street, always seizing opportunities to acquire what he wanted and gradually expanding his empire. For example, he bought Atari before it became popular and then kicked it out when it faced its biggest crisis.

So, to deal with such a person, to make him listen, if he had just taken over Warner Bros., it might have been possible, but now he has been in charge for almost ten years.

"What about Disney?" Li Xu didn't mention Warner Bros. again but asked another question.

"To gain absolute control, you'd need at least 2 billion," Father said with a smile.

"I'm not interested in absolute control," Li Xu immediately retorted.

Some people think that unless you have 51% absolute control, the company will eventually be taken over. That's an outdated idea. In this era of capital, if you don't offer some benefits, why would anyone help you expand? Bill Gates initially gave Li Xu 45% of Microsoft's shares.

Moreover, without stock dividends and stock options, how can you attract and motivate employees? How can you maximize the company's potential?

Furthermore, company owners are not helpless against capital attacks. There are always solutions, just more complicated.

The simplest way is to introduce capital from multiple sources, dividing the shares into dozens of parts, holding the largest portion, even if it's just one-third, which is enough to control the company.

With many small shareholders, it's hard to form a threat and easy to be co-opted. As long as they can't organize, they remain scattered. Not to mention other methods like issuing new shares and transferring assets to subsidiaries.

If you can't protect your company in such a situation, what kind of business are you running? You might as well buy a block of tofu and smash your head against it.

"But you want to kick Roy Disney out of the board," Father said.

"That doesn't require absolute control, just becoming a major shareholder," Li Xu said with a sneer. "Grandpa mentioned that Godfather has some Disney shares he wants to sell. You should be able to help me, right, Dad?"

"But Ray Miller is clearly not an excellent leader," Old Edward didn't answer directly.

"Yes, I know, but I already have a suitable CEO in mind," Li Xu said, not caring. "Roy will challenge Ray eventually. We can use this opportunity to kick Roy out of the Disney board and replace him with our own."

"Why not kick Ray out as well?" Father suddenly asked.

"Disney without the Disney family?" Li Xu frowned slightly.

Roy Disney is Walt Disney's nephew, and Ray Miller is Walt Disney's son-in-law, the only two Disney family members on the board.

"So what?" Old Edward chuckled. "How many family businesses have no family members on their boards after 100 years? Even David Rockefeller chose to go to Chase Manhattan rather than stay at Exxon."

"That's different, Dad," Li Xu frowned.

"What's different? At least it proves the literal meaning of the statement," Old Edward maintained his smile. "As you said, if you're going to dream, dream big."

Li Xu didn't respond, and after a moment, Father continued: "If you're worried about criticism because the Disney board has no Disney family members, I suggest keeping Roy. Ray is in technology and is often harder to communicate with."

"No, I don't like Roy," Li Xu immediately rejected.

Who Roy Disney is, Father might not know, but Li Xu certainly does.

To the general public, Roy seems to be a hero for Disney, saving it several times. In the 1980s, he drove out Ray Miller, who caused Disney to lose money, and in the 21st century, he drove out the arrogant CEO Michael Eisner, preserving Disney's cultural tradition.

But to Li Xu, who remembers the entertainment data from his previous life, Roy Disney is just an old man skilled in political maneuvering.

For example, Michael Eisner was personally invited by Roy after he drove out Ray Miller. Eisner didn't disappoint, growing Disney from a value of just over a billion in the 1980s to 40 billion by 2000.

Although Eisner became arrogant later, did Roy, who served as vice-chairman of the board from the beginning, not know? Not see?

It was just that Eisner helped him control the board, but when Eisner became a threat, Roy left and created the "Save Disney" website to force Eisner out.

Li Xu wouldn't allow such a situation. Disney must be firmly in his hands, and it and Time Warner are two key pieces in his future plans.