Chapter 472: Preparing for the IPO

When I returned to the meeting room, I sensed something was off.

The atmosphere felt strangely tense.

Jiang Zidong looked irritated, while Ma Huateng wore a serious expression.

“Do you need more time to coordinate your opinions?”

I paused at the entrance and asked the two of them.

“Oh, no. Please continue your conversation,”

Jiang Zidong said, forcing a smile as he waved his hand dismissively.

“Then I’ll take a seat.”

We sat facing each other again. Manager Ma stood firmly behind me, just like before.

He looked down coolly at Ma Huateng and Jiang Zidong.

Having been on his mind for a while, Jiang Zidong subtly urged,

“How about the person behind you takes a seat too?”

“No, I’m more comfortable this way.”

Manager Ma flatly refused. Even I could hear the coldness in his voice.

Jiang Zidong’s smile turned even more awkward.

Trying to shake off the uncomfortable vibe, Jiang Zidong asked me,

“Did you find it easy to discuss things?”

“TJ Soft is currently looking for partners, while SY Soft is already on the brink of signing a deal with Da Nine.”

“Da Nine?”

Jiang Zidong exclaimed, caught off guard.

“Yes. It seems they’re making significant progress. They’ve already exchanged conditions, it seems.”

“Then…”

“Don’t worry. Tomorrow, Park Hyeonseong from HS Ventures will meet with the executives and nullify everything.”

Jiang Zidong’s gloomy expression lit up in an instant.

“That’s a relief! If Da Nine is our opponent, our chances of winning are extremely low since we haven’t even built our ecosystem yet.”

“By the way, I heard that Da Nine operates CNNIC, with around ten million members.”

“Yes, that’s correct. They’re leading the online gaming services in China. Going to market normally, we wouldn’t stand a chance against them.”

As he mentioned, if competition were to occur on normal terms, neither TJ nor SY would choose Tencent.

Unlike Tencent, which had shown nothing yet, Da Nine’s performance was already solidified.

“However, the number of QQ Messenger members will keep increasing. It’s just over a hundred million at the moment, though. QQ is Tencent’s greatest weapon.”

To refer to a hundred million as ‘just a little’…

I couldn’t help but chuckle inwardly at the absurdity. Perhaps it’s the vast population of China that gives such a different perspective.

But then again, this is China. If there weren’t significant incentives, there wouldn’t be a reason to enter the market.

“The key will be how to naturally guide those people into gaming. If we can successfully draw them in with games, no one will stand a chance against Tencent, right?”

Jiang Zidong smiled brightly and chimed in.

“Absolutely! But we need a good game for that.”

I answered with a smile as well. After all, it’s easier to deal with someone who has desires.

“Alright then, shall we discuss the terms in earnest?”

With that remark, we officially entered negotiations.

After a marathon session lasting about an hour, we reached a conclusion.

“We will establish a subsidiary for Tencent’s gaming division, with 51% of the shares held by Tencent Holdings. The remaining 49% will be granted to Dream High Investment at no cost. Is that correct?”

Jiang Zidong reiterated the conclusion, and I nodded.

“Yes, and the contract fee and usage fees for the Blood Alliance and Mu Online must be greater than what Da Nine proposed.”

“That much is doable. Just bringing it in for services ensures a hit without fail!”

“Great! Let’s draw up a memorandum of understanding. We’ll finalize a proper contract after TJ and SY seal the deal.”

A somewhat worn-out Jiang Zidong nodded vigorously.

“When we prepare the contract, I won’t come personally; someone from Dream High’s Shanghai branch will handle it.”

“Understood.”

While Jiang Zidong and I were conversing, Ma Huateng hadn’t uttered a single word.

He didn’t seem to be talkative normally, but did he really need to remain this silent?

I began to wonder why Ma Huateng was acting this way all of a sudden.

“Don’t you have anything to say, Representative Ma Huateng? You seem like you have something on your mind. Please don’t hesitate to share.”

Jiang Zidong, who had just been smiling, suddenly looked serious.

Ma Huateng glanced at Jiang Zidong, who shook his head.

‘So that’s why the atmosphere turned chilly when you walked back in earlier.’

I saw Ma Huateng struggling with his thoughts due to Jiang Zidong’s restraint.

After a deep sigh, Ma Huateng finally spoke up.

“There’s an issue.”

“An issue? Is there something about Tencent that’s immediately troublesome?”

“Uh… I think we need a new investor.”

Ma Huateng’s voice trailed off painfully.

I raised an eyebrow, responding.

“A new investment… We clearly stated that when we acquired Tencent’s shares, no new investors could be sought without our approval. Am I mistaken?”

“No, that’s correct. We did reach that agreement, and we are seeking investments.”

“But suddenly a new investment? Is something wrong with Tencent’s finances?”

Thanks to the successful launch of QQ Show, Tencent’s revenue was skyrocketing.

Unlike QQ Messenger, which lacked a clear revenue model, QQ Show was driving sales with its diverse monetization strategies.

“…No, it’s not that.”

“Then why do we need a new investment?”

Ma Huateng hesitated, unable to answer.

“Representative Ma Huateng, please speak up. If you have other intentions, now’s the time to reveal them.”

“Well… Actually, there was pressure to seek investments.”

I had a rough idea but still couldn’t believe it was true.

After all, if it wasn’t this serious, Ma Huateng wouldn’t go to such lengths.

I deliberately wore a stern expression and asked.

“I thought we were on the same page. Is the Shanghai faction pressuring us?”

“That’s correct.”

After finishing, Ma Huateng cast his eyes downward.

I see? So that’s the real reason why you’ve been trying to keep me in the spotlight.

You’re trying to avoid confrontation with the Shanghai faction by hiding behind me.

While Hu Jintao and Jiang Zidong are busy fighting each other, you plan to slip away?

Cunning. But that’s one of the ways to survive, so I’m not inclined to criticize.

“It likely won’t be a direct investment; who’s the agent?”

“Have you heard of Naspers?”

Naspers!

Hearing that name felt like I’d just found the missing piece to the puzzle.

So Naspers is the one managing the Shanghai faction’s funds.

I’d often wondered why a South African media company acquired 46.5% of Tencent, which was still nascent in China.

If Naspers is an investment firm handling black money for the Shanghai faction, it all makes sense.

But this time, I secured my stake before Naspers got to it.

“I understand it’s a media group based in South Africa. They started in publishing but began venturing into the internet and media industries under current chairman Koos Bekker. But does that company have ties to the Shanghai faction?”

“I’m not entirely sure. They contacted me and simply instructed me to seek investments if Naspers were to invest.”

Ma Huateng continued, his face gloomy.

It made sense; if you tentatively engage in central politics, you’ll only face pressure.

“Hmm… So, do you want to accept Naspers’ investment, Representative Ma Huateng?”

“When the Party issues such directives, we have to comply. If we disobey, we won’t be able to operate in China. You know that well, Kim Mu-hyeok, right?”

In China, if you fall out of favor with the Communist Party, you can never do business.

But I had no intention of sharing Tencent with the Shanghai faction or anyone else.

“Why is the Shanghai faction so insistent on forcing us to seek investments? They might as well go public…”

I unintentionally trailed off mid-sentence.

A memory flashed through my mind.

Unlike Alibaba, which delayed going public as long as possible, Tencent had gone public on the Hong Kong stock exchange back in 2004.

There was no reason to rush into an IPO, and now I finally understood why they chose Hong Kong over NASDAQ.

“So you’ve been secretly preparing for the IPO without us knowing, Representative Ma Huateng.”

“How do you… How much do you really know?”

Ma Huateng’s eyes widened as he asked.

He even looked surprised enough to leave his mouth agape.

“It’s easy to figure out. Tencent was preparing for an IPO, and the Shanghai faction presumably sought to profit from the stock price differences after it went public.”

“…”

Ma Huateng didn’t respond.

But sometimes, silence speaks the loudest.

After taking a deep breath, I looked at Ma Huateng.

I wasn’t considering an IPO for Tencent yet.

After all, Tencent was still on the rise.

“I will not accept any investments from anyone other than the US-based VC currently involved with Tencent. And I intend to delay the public offering as much as possible. If additional funds are necessary, I’ll acquire more shares through a capital increase. I included this in the share acquisition agreement.”

I hadn’t realized Naspers had ties to the Shanghai faction.

If they had planned to invest in Tencent from the start, they’d likely still want to proceed even with my involvement.

Even if it meant forcibly diluting my shares.

Thus, I made sure to specify this in the share acquisition agreement.

I stated that any new investments must proceed after reaching an agreement with Dream High Investment.

No new investments could be made without our consent.

This was a standard clause applied to all companies investing in China.

It meant I couldn’t fully trust them without binding them in a contract.

China is a country where anything can happen.

“So the Shanghai faction…”

I fell deep into thought.

If the Shanghai faction decided to take down Tencent, there would be no stopping it.

No, there was only one way.

Joining hands with Hu Jintao. That was the only alternative.

Should I completely sever ties with the Shanghai faction to save Tencent…?

The silence stretched on. Ma Huateng awaited my answer, while Jiang Zidong, sitting beside me, watched my expression.

After what felt like an eternity, I finally spoke.

“Who contacted you?”

“Zhou Yongkang from the Ministry of Public Security.”

“Zhou Yongkang personally reached out to you? For something like this?”

“Yes, that’s right.”

Zhou Yongkang is a key figure within the Shanghai faction.

He was appointed as the minister of public security just last year.

“Was Jiang Zemin involved in this?”

“That much…”

Whether Zhou Yongkang acted alone or followed Jiang Zemin’s instructions was irrelevant.

I pinched my forehead, feeling a headache coming on.

“So, behind the IPO frenzy of Chinese IT companies, we have the Shanghai faction pulling the strings.”

Ah, this is giving me a real headache.

It’s too early to fight with the Shanghai faction.

“Representative Ma Huateng.”

“Yes, go ahead.”

“I will present you with three options. The choice is yours.”

I decided to give Ma Huateng the decision-making power.

“Option one, I will transfer my shares directly to the Shanghai faction. The price is three hundred million dollars. That’s ten times the amount we paid to acquire your shares. No negotiations on the price.”

When Tencent goes public next year, its company valuation will likely hit around 800 million dollars.

While 46.5% may be insufficient, it was still a sizeable sum given that the market wasn’t even public yet.

“Option two, we sever ties with the Shanghai faction. Partner with us and support the Communist Youth League. I’ll protect you from Shanghai faction’s attacks during this time.”

The Shanghai faction wouldn’t risk an all-out war with the Communist Youth League just to topple Tencent.

There were still many companies yet to go public.

Plenty of Chinese IT firms are gearing up for their IPOs.

While some may fail in the future, I knew there were already companies that had successfully gone public.

I could negotiate in such a way to divert interest from Tencent by introducing such companies.

“Lastly, you can sell your shares to someone I designate and withdraw from Tencent’s management. Of course, under the condition that you won’t enter the same business.”

In short, it meant I’d pay him off to leave.

And I hoped that Ma Huateng didn’t choose this option.

Despite my dissatisfaction with Ma Huateng’s capabilities, if he wanted to maintain contact with the Shanghai faction, he’d have to sever ties with me instead.

I locked eyes with Ma Huateng as I continued speaking.

“The decision is up to you, Representative Ma Huateng. I will explore my options based on your choice.”