Chapter 87

The Olympic Committee's welcome banquet ended around 8:30 PM. Such official events usually conclude before 9 PM. By 10 PM, Zhang Guan had already appeared in the office of Huang Weida at Fuda Investment Company.

"I currently have 15 million euros. I plan to divide this amount into three parts for investment," Zhang Guan said.

Huang Weida nodded. At the current exchange rate, 15 million euros is roughly equivalent to 140 million Hong Kong dollars. If considered as a one-time investment, this is a substantial amount in Hong Kong. Apart from the top few billionaires, even ordinary first-class tycoons would need some time to gather such a large sum.

"It seems Mr. Zhang already has a direction for investment. May I know what specific needs you have?" Huang Weida asked.

"I plan to invest 6 million euros in commercial properties in popular areas of Hong Kong. I need projects that won't face demolition for at least ten years," Zhang Guan said.

"So, Mr. Zhang is interested in Hong Kong's real estate market," Huang Weida said with a look of understanding. Over the past few decades, Hong Kong's real estate industry has created a large number of wealthy businessmen. Almost every top tycoon in Hong Kong has a connection to the real estate industry, and the richest man in Hong Kong, Li Chao Ren, started his career in real estate. In recent years, with political stability, investing in real estate has been a sure bet, and nine out of ten investors are optimistic about it.

Huang Weida continued, "Real estate is indeed the best investment direction in Hong Kong right now. Land in Hong Kong is extremely valuable, and it will only become more valuable. Mr. Zhang might also consider investing in residential properties."

"Residential properties will definitely rise in value, but I am more optimistic about Hong Kong's commercial sector. Especially after the opening of free travel, I believe more and more tourists will come to Hong Kong. I think that for at least the next ten years, commerce will be Hong Kong's greatest advantage in attracting tourists, so I choose to invest in commercial properties," Zhang Guan said.

Huang Weida nodded. Although Zhang Guan's words were somewhat vague, Huang Weida could understand the underlying meaning: more and more mainland tourists will come to Hong Kong, and their primary purpose will be to shop.

Huang Weida did not entirely agree with Zhang Guan's view. He believed that to shop, one must have money. The mainland is poorer than Hong Kong, and goods in Hong Kong are more expensive than in the mainland. It is unlikely that poor people would buy expensive items. This was also the general view of most people at the time. No one could have imagined the tremendous changes that China would undergo in the next ten years!

As a person from the future, Zhang Guan naturally knew that in seven or eight years, mainland tourists would shop in Hong Kong with great enthusiasm. In the next ten years, the prices of commercial properties in prosperous areas of Hong Kong would increase by several dozen times. At that time, commercial properties were like money-printing machines, and the annual rental income was substantial. It was then that Hong Kong people realized that residential properties were copper, office buildings were silver, but commercial properties were true gold!

6 million euros is equivalent to over 50 million Hong Kong dollars. This amount is not large, and in ten years, it might not even be enough to buy a large commercial property. However, in this era, due to the sharp drop in Hong Kong's land prices last year, especially the significant decline in commercial property prices, it is now possible to buy several well-located and spacious commercial properties.

Zhang Guan continued, "I also want to invest in American company stocks. I plan to use 7 million euros to buy Apple's stock."

"Apple?" Huang Weida thought for a moment and then said, "To be frank, I think Apple's stock is already at a relatively high price. I don't think it's a good investment choice."

Huang Weida then typed on his computer for a while and turned the monitor to face Zhang Guan, saying, "In the past few years, Apple's stock price has been low. After Steve Jobs returned to Apple and developed the portable media player iPod, it brought significant profits to Apple and increased its stock price. However, in recent years, the market has seen a large number of low-cost iPod-like products. Apple's personal PC business has not improved, and IBM and HP still dominate the personal PC market. Additionally, Lenovo's PC business has been growing rapidly in recent years. Therefore, I am not optimistic about Apple's stock performance."

Zhang Guan stared at the monitor, which displayed Apple's stock price over the past few years.

"A price of over twenty dollars is considered high! This is going to make me rich!" Zhang Guan was extremely excited. Apple's stock price had risen from around ten dollars to over twenty dollars in recent years, which was already considered high by investors. However, Zhang Guan knew that in the future, Apple's stock price would soar to nearly seven hundred dollars. If he invested 7 million euros in Apple's stock now, the future value would definitely exceed 200 million dollars.

Thinking about this, Zhang Guan said, "I believe in Steve Jobs. He is a genius and will definitely create groundbreaking electronic products. Therefore, I am very optimistic about investing in Apple's stock."

"Alright." Huang Weida nodded. He had seen many stubborn investors who were extremely confident in their decisions. From Zhang Guan's confidence, Huang Weida knew that further persuasion would be futile.

"Regarding the remaining funds, I want to invest in an American company," Zhang Guan paused and then said, "Have you heard of a social networking service in the United States called FB?"

"FB? Is it related to the FBI?" Huang Weida joked and then said, "Social networking is a relatively new industry, and I am not very familiar with it."

"FB is a social networking website in the United States. It only appeared about half a year ago, and its founder is a computer science student at Harvard University. I think this website has a bright future, and I want to invest in it," Zhang Guan said.

"Can this be considered an angel investment?" Huang Weida asked.

Zhang Guan nodded and said, "Yes, it can be considered that. However, I do not want a fixed return. I want to hold equity in the website."

"Equity? This might be a bit complicated. If you were an American, it would be easier, but as a non-American, it requires some complex legal procedures," Huang Weida said after some consideration. "Through my company, we can handle it through an authorization process. We can announce you as an angel investor who only provides funds, while the investment decisions are made by the investment company. This can save a lot of legal trouble. Americans will not scrutinize Hong Kong-based investment companies as strictly, but you might need to give up some rights, such as decision-making power in the company, and you might not be able to participate in the company's decisions as a major shareholder in the future."

"That's fine. I don't need decision-making power, and I can give that up, but the equity must be guaranteed," Zhang Guan paused and then said, "I can accept a dual-class share structure, even with zero voting rights, but I must ensure that I hold a certain percentage of the shares and agree on the ratio of new common shares."

The dual-class share structure is the founder of FB, Mark Zuckerberg's, safeguard. He divided FB's shares into two types: A shares with ordinary voting rights and B shares with ten times the board voting rights. He holds a large number of B shares and has signed voting proxy agreements with many major shareholders. Through this, he controls the company with just 24% of the shares, enjoying 56% of the board voting power. Even if Wall Street investors buy a large number of FB shares, they still cannot match Zuckerberg's board voting power. Additionally, B shares automatically convert to A shares when sold, ensuring that Zuckerberg's board voting power only increases as long as he does not sell his shares.

The allocation of new common shares is a method to prevent share dilution. In January 2005, Zuckerberg used this method when FB issued 9 million new common shares, and he preemptively took 3.3 million shares. As a result, his shareholding ratio did not change, while the second-largest shareholder, Eduardo Saverin, saw his shareholding ratio reduced to less than 10%.

It is now September 2004, and FB is facing its biggest trouble since its founding. They have been sued by another social networking site, and lawsuits in the United States are very expensive. Zuckerberg has no money, and without it, he cannot even keep the servers running. If he misses this investment opportunity, even three months later, it would require millions of dollars to invest in FB.

Originally, American investor Peter Thiel would soon appear, investing 500,000 dollars in FB as an angel investor, which gave him 9% of FB's equity. This investment eventually brought him a billion-dollar return. However, he sold a large number of shares early in FB's IPO, when the stock price was 20 dollars per share, which already made Peter Thiel ecstatic. Later, FB's stock price soared to over 100 dollars.

At FB's IPO, Peter Thiel's 500,000 dollars were diluted to 44 million B shares, representing 2.5% of the company, while founder Zuckerberg held over 500 million B shares. In this regard, Zhang Guan is clearly more greedy. He wants more than Thiel. Zhang Guan can give up the rights of B shares, even holding all A shares, but he must hold a larger percentage of shares. Zhang Guan knows that his equity will be gradually diluted in subsequent rounds of financing. If he can hold a percentage similar to Zuckerberg's, even slightly lower, he will hold at least 20% of FB's shares when it goes public. If FB's market value is 200 billion dollars, 20% of the shares would be worth 40 billion dollars.

Huang Weida had never met a client like Zhang Guan before. Each of his requirements seemed unique. Investing in real estate is a conventional decision, and everyone in Hong Kong is enthusiastic about buying properties, but the interest in commercial properties is not as high as in residential properties. In Huang Weida's view, Apple's stock has already reached its peak. The recently launched fourth-generation iPod is only thinner, with no significant functional improvements, making him less optimistic about Apple's future. Investing in a completely unknown website is more like a gamble.

However, Huang Weida ultimately respected Zhang Guan's decision and said, "I will prepare the necessary authorization documents and legal texts. After you return, my company will send a specialist to meet with you."

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