leonardwarren Chapter 208 Playing the Scoundrel Halfway
Chapter 208 Playing the Scoundrel Halfway
Chapter 208 Playing the Scoundrel Halfway
Five days ago, John Reid publicly denounced Ernst as a scoundrel and Goldman Sachs as a rapist.
Five days later, Wall Street said that John Reed had spoken too soon.
On July 31, a bombshell announcement suddenly dropped on the headlines of major financial media outlets, finally bringing to a close the financing saga of YueDong Games, which had been stalled for over a month.
According to information officially disclosed by YueDong Games, the company successfully raised $10 billion in funding, with a pre-investment valuation of $39.5 billion and a post-investment valuation that soared to $49.5 billion.
This round of financing diluted YueDong Games' shares by approximately 20.2%. However, what is more noteworthy is the lineup of investors: Citibank and an institution called Silicon Valley Investment Fund jointly led the investment, each holding 6.5% of the shares.
Goldman Sachs, which was previously criticized by John Reed, and another financial giant, Morgan Stanley, are also on the list, each holding 3.6% of the shares.
The moment the results were announced, the entire United States was engulfed in a frenzy of reporting.
Open any financial media outlet and you'll find this issue dominating the pages, with remarkably consistent opinions.
Ernst once again treated Wall Street like a super sucker.
"I never expected that these Silicon Valley investors would be so bold."
In his MGM office in Los Angeles, Robert Iger stirred his coffee as he spoke to Ernst, who was sitting across from him.
Sunlight streamed into the office through the huge floor-to-ceiling windows, falling on Ernst, but he paid no attention. He was leisurely leaning back on the sofa, holding the day's newspaper, reading with relish the sarcastic remarks about Wall Street, and occasionally a smug smile would appear on his lips.
He did not attend the signing ceremony for the financing of Leap Games, nor did he leave Los Angeles.
For him, the financing was already successful, so there was no need to make a special trip to the event to join in the fun.
However, while browsing the newspaper, one name still stood out: Silicon Valley Investment Fund.
When Ernst first heard about this institution, he was quite confused because he had never heard of this fund before.
This Silicon Valley investment fund appeared out of nowhere, without any warning.
It was only later that I learned that this fund was jointly established by Sequoia Capital and six other powerful investment institutions in Silicon Valley.
Their purpose in establishing this fund was very clear: to get a share of YueDong Games' financing and to acquire shares in YueDong Games.
"Now, you're public enemy number one in America." Robert Iger put down his coffee spoon, a hint of schadenfreude in his eyes.
Ernst, however, nonchalantly curled his lip, casually tossing the newspaper he was holding onto the coffee table beside him, and said in a relaxed tone, "The public enemy should be Wall Street. What does it have to do with me? They're willing to invest their money; I can't just turn away money that's offered to me, can I?"
With the successful funding rounds for MGM and Leap Games, plus Google, Ernst's net worth has now exceeded $10 billion.
However, prior to this, apart from MGM, the outside world had no idea how many shares Ernst owned in Google and Leap Games, so there was no excessive hype.
Instead, more attention was focused on Wall Street being repeatedly taken advantage of, which greatly increased its popularity.
Some media outlets even began to fan the flames, calling on relevant government departments to intervene and investigate whether there were any shady dealings or illegal activities such as asset transfers between Wall Street and Ernst's company.
After all, this financing event is just too absurd and completely defies common sense.
In the traditional business logic, it has always been Wall Street that cheats others. In order to obtain financial support, companies often have to lower themselves and beg Wall Street bigwigs for investment.
But what about now? There are more than just one company like Ernst that has Wall Street institutions chasing after it for investment; it's a rare sight in the entire history of American business.
More importantly, the valuation of each investment is more outrageous than the last. Before YueDong Games even went public, its valuation was already approaching $50 billion. If you said there was no inside story, no one would believe it.
"I heard that even gaming giants EA and Blizzard have spoken out?" Robert Iger suddenly changed the subject, mentioning two other giants in the gaming industry.
EA and Blizzard are both prominent players in the American gaming industry, and both are publicly traded companies. According to the latest market capitalization data, EA's market capitalization is approximately $35 billion, while Blizzard's market capitalization is approaching $38 billion.
Even so, its valuation is still lower than that of YueDong, a company that became a hit solely because of one game.
Ernst chuckled softly upon hearing this. "They're not really making a statement; they're clearly taking the opportunity to inflate their own company's market value."
"Think about it, YueDong Games hasn't even gone public yet, but its valuation has already reached $49.5 billion. Both of them have so many mature game products, but their market value is lower than YueDong Games. They must feel resentful and want to take this opportunity to send a signal to the market, making investors feel that their market value is undervalued, thereby driving up their stock price."
After a pause, Ernst continued, "However, one thing is certain: after this incident, EA and Blizzard will definitely accelerate their investment in the online gaming field."
According to his information, both companies are already planning to develop large-scale online games.
Interestingly, Blizzard's World of Warcraft may be released ahead of schedule.
Robert Iger asked with some doubt, "Isn't their accelerated investment and even early release of the game a threat to you?"
Ernst shook his head and said firmly, "This is actually a good thing. The online game market was still in its development stage and the market size was limited. If only YueDong Games were to focus on this field, it would be difficult to build up the market size."
With more industry giants joining the fray, game genres will become more diverse, attracting more players to the market. Ultimately, all game companies, including YueDong Games, will benefit.
"You've managed to absolve yourself quite easily," Robert Iger shook his head helplessly, pointing to the newspaper on the table.
"Your move to undermine Wall Street has really disgusted them; it's like swallowing a fly."
Robert Iger said this because at the YueDong Games financing press conference, the company's head, Ryan Ruiz, announced two major plans that stunned Wall Street investors.
The first plan was a billion-dollar support program, and the second plan was a large-scale investment in a special effects company called Yaodong.
The outside world could barely understand the first billion-dollar support plan.
According to Ryan Ruiz, Leap Games will invest $10 billion over the next two years specifically to support game developers who have creative ideas but lack funding.
It is widely believed that YueDong Games is doing this to enrich its newly launched platform, attract more high-quality game content to the platform by supporting developers, thereby enhancing the platform's competitiveness.
From this perspective, it's clear that YueDong Games has significant ambitions for this gaming platform and is laying the groundwork for long-term development.
However, even Robert Iger couldn't help but speak out on behalf of Wall Street regarding the second investment plan in Aurora Effect, saying, "Aren't you being a bit of a scoundrel with Aurora Effect?"
Ernst had always wanted to develop a special effects company, something Robert Iger had known for a long time.
But now Ernst is using the money Wall Street invested in YueDong Games to develop his long-cherished special effects company. This move is really too outrageous.
Wall Street investors are even more frustrated. They were previously ridiculed by the media as fools, but they could still console themselves by thinking that they had a unique vision and that investing in Leap Games was their true love. They are waiting for time to prove how correct their current decision was.
I never expected that it would be one thing for the media to say something, but you actually think we're easy targets? You're not pretending anymore, are you?
Ernst's current actions clearly indicate that he has them cornered.
Everyone's money is already invested, and it's impossible to withdraw it now.
Because YueDong Games is a private company, unlike listed companies that can exit through selling shares on the secondary market, there is no way to exit unless someone is willing to take over the shares.
The problem is that these Wall Street investors simply don't want to exit. If they weren't optimistic about the future development of YueDong Games, they wouldn't be willing to invest money.
But now they are watching helplessly as they get trapped, and Ernst is resorting to underhanded tactics at this crucial moment, using the money they gave to Yuedong in other areas. Isn't that a bit unethical?
The four companies that invested in the company all said, "Ernst, have some decency!"
Ernst showed no remorse whatsoever, instead retorting without batting an eye, "What did I do wrong? Isn't a game engine a special effects tool? My investment in a special effects company is also for the purpose of better developing a game engine, which does not conflict with the main business of YueDong Games."
Before 92, developing a game required writing code from scratch, making the process extremely complicated.
However, in 92, Apogee released the game Wolfenstein 3D, and a 3D engine was born.
The engine uses ray tracing technology to render objects in the game. Each pixel emits a beam of light. When the beam hits an obstacle and is reflected, the game creates a one-dimensional depth cache at the corresponding position of the obstacle according to the pre-set program, and builds a texture image.
Strictly speaking, however, Wolfenstein 3D presents a pseudo-3D effect and is not a game engine.
A true game engine is one that, when a new game needs to handle things like sunlight reflection, character gait, and the external environment when a character is running, you don't need to write new code; you can simply use the code from the existing game engine.
This will greatly reduce the production costs and time required for other game companies to create new games, making it imperative for Leap Games to develop its own game engine.
Moreover, this is the future. As game engine content becomes richer and technological breakthroughs occur, the strategic value of game engines will become increasingly important.
Why?
Because it's a cross-domain issue.
It can be used for everything from small-scale film and television production to large-scale flight simulations and war simulations.
For example, in the case of war, a complete, one-to-one scenario can be recreated using a game engine for simulation exercises before the actual war takes place.
Later, militaries around the world developed their own simulation engines, or game engines.
However, Ernst's actions this time were indeed somewhat unethical. As he said, isn't the game engine considered a special effect?
That's why YueDong spent the money developing the game engine, but Ernst used that money to develop film and television special effects, because it was truly impossible to distinguish between them.
Wall Street investors are clearly aware of this, which is why they feel even more frustrated.
They knew in their hearts that they had been tricked by Ernst, but they couldn't find reasonable evidence to prove it, so they could only swallow their anger and suffer in silence.
Robert Iger looked at Ernst's self-righteous attitude and shook his head helplessly. "Everyone else gets ripped off by Wall Street, but you're the only one who specifically targets Wall Street for ripping people off."
Ernst said nonchalantly, "What does it matter? Wall Street has plenty of money anyway, they won't miss this little bit of investment. Besides, I'm using this money to develop special effects and the game engine, which will ultimately bring greater value to YueDong Games, and they'll see the returns sooner or later..."
Before he could finish speaking, the office door was pushed open, and Ernst was left speechless.
The ways of Heaven are cyclical; no one escapes the wrath of Heaven.
And now, karma has come back to bite us!