Published at 26th of November 2020 03:15:06 AM
Chapter 1095: 1095
Chapter 1095 – A bubble had formed in China
Feng Yu discovered that once he became famous, whatever he does will appear on the headlines . He had tried to keep a low profile recently, but after LA Wind and Rain won the NBA championship, Feng Yu’s name appeared on the headlines again .
Feng Yu is also helpless about this . His team had played well, and it should be the Coach, team manager, and players’ credit .
Feng Yu does not want to appear on the headlines at all .
Some sports media even want to interview Feng Yu . They want to know if Feng Yu has the intention to buy other teams, like the football team, female basketball team, baseball team, etc .
But Feng Yu rejected all interviews . He had bought this basketball team for fun and is not looking at making profits from it . As for other teams, he is not interested .
Feng Yu was relieved to have signed three years of endorsement contracts with his players before winning the championship . If not, the endorsement fees will be several times higher .
For example, Pierce had become this year’s MPV . His finals’ performance had impressed everyone, and Carter, who had lost this year’s MPV to Pierce, was also worth much more .
Feng Yu had won 1 . 2 million USD from his bet, and he used his winnings as a reward for his team .
After winning the championship this year, the broadcasting rights sales will be higher next year . Some TV stations had bought the broadcasting rights for the next three years, and the team’s jersey, tickets, arena’s advertisements, etc . had increased a lot .
Elgin promised Feng Yu that the team will be profitable from next year onwards . Actually, the team had become profitable after they entered the playoffs . No one expects a bottom team to become profitable within two years .
Feng Yu is not concerned about all these . Even if the team is not giving him any returns, he had not made any losses for this investment as the team’s value had increased by a lot .
Kirilenko is thinking of setting up a Russian basketball team in the NBA, and Feng Yu also wants to try setting up a team full of Chinese players . Even if he cannot do that, he wants to send Chinese players over to train the NBA players .
The Chinese basketball team had been stationed in the US for training, and Feng Yu asked his scouts to look out for good players that suit his team .
The basketball league in China is not as established as the US . It’s hard for professional Chinese basketball players to make a living . Feng Yu’s decision to recruit Chinese players is well received by the players and the Chinese General Administration of Sport . At the same time, Feng Yu had indirectly helped Wen Dongjun in his career . He was promoted from the head of a small section to the head of a department .
A few days ago, Feng Yu had cleared his short position on Enron’s shares . Feng Yu, Kirilenko, and Fu Rongqi had made a few hundred million USD from this transaction . They had suffered some losses when they dumped Microsoft and other tech-related shares earlier . Still, the returns from Enron’s shares are much higher than the losses .
Citibank etc . were also sued by the courts because of their dealings with Enron .
During this period, Enron’s share prices had fallen below 5 USD . No one had expected this to happen .
Those who believed what Enron’s top executives said suffered massive losses . They did not expect Enron to have really fabricated their financial reports .
Enron’s share prices continue to plunge, and Enron’s top executives and directors were all sued . But all of them had transferred their assets away before they were caught .
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Some of them had transferred their wealth to their parents, spouses, children, etc .
Because of Enron’s implication, Citibank’s share prices also fell . There were rumors that Citibank will have to compensate up to 2 billion USD!
But at this time, the stock market also started recovering . Some blue-chip companies start to pull up the market, but tech-related stocks continue to decline .
Especially Nasdaq . The majority of internet and tech-related stocks are listed on Nasdaq .
Nasdaq index had increased slightly before it starts fluctuating .
The stock markets entered a dormant period, and investors no longer invest in internet and tech-related stocks . At this time, AT&T announced massive losses .
This announcement speeds up the bursting of the internet bubble .
These few years, AT&T had been laying fiber optic cables to increase the internet transmission capacity by more than ten times .
But the demand had only increased by less than three times .
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AT&T had issued shares to raise funds, and this increases their debts . However, its profit is not enough to cover their debts .
Some telecommunication companies were forced to be acquired, and some declared bankrupt .
There are about 10 million internet users currently in China, and this figure was so high due to the online game, Legend of Mir . When Sohu, Sina, NetEase, etc . companies got listed on Nasdaq, many companies noticed the internet’s potential!
Thus, people in China also started to invest in internet shares . They invested in internet companies blindly .
Feng Yu knew some internet companies’ share prices will shoot up after they got listed on China stock markets . Still, when he heard about those companies or the owners’ names, he realized he had not heard of them in his previous life .
The myth of becoming a millionaire through the internet is too enticing for investors .
Many Chinese internet companies start to poach employees with high salaries . They even managed to poach Microsoft staff from their China office . The salary offered was even higher than what Microsoft is paying them .
Some internet companies advertise aggressively on billboards, TV, etc . but no one knows what these companies are doing . These companies are only trying to increase their exposure to raise funds through the stock market .
These companies are flaunting their wealth to tell other investors that the company is rich . All investors will get high returns if they buy the company’s shares .
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What if the company runs out of money? Issue more shares, and the company will have money to spend again .
This is a vicious cycle, and once this bubble burst, the investors will lose their money . To the company’s major shareholders, they don’t care as they can’t dump their shares anytime soon .
During this period, a lot of companies approached Tai Hua Consultancy for funding . But they were all rejected by Sun Lijie . Feng Yu had instructed them not to invest in these companies .
So, Sun Lijie rejected lots of people until a man named Li Yanhong appeared .
Translator’s notes:
Robin Li
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