Becoming Rich with Daily Scavenging APP

Chapter 150: $5 Billion Wiped Out in a Day


"Since you two seem to hit it off, why don't you chat for a bit? I'll go find some good tea leaves for you."

Zhang Yuling noticed that the two of them both seemed eager to talk, without needing her to act as an intermediary, so she got up immediately and made an excuse to leave.

At this moment, only Chen Yiyang and Zheng Lu remained in the private room.

"Have you heard about the trouble Kuxing Coffee has been facing recently, Mr. Chen?"

Once Zhang Yuling left, Zheng Lu went straight to the heart of today's topic.

"I've heard of it." Chen Yiyang nodded.

Before coming over, he specifically did some homework to understand the ins and outs of the matter.

I can only say, the founder and boss of Kuxing Coffee is indeed a genius!

He actually spent US investors' money to treat locals to coffee.

Here's the situation.

In the country, although coffee is considered a common beverage, it has never been able to surpass the tea market, and the average coffee consumption is not high.

So Zheng Lu founded Kuxing and then ran to the United States to seek investment.

Under his depiction, the coffee market for Huaxia's over a billion people was undoubtedly a blue ocean.

If a coffee company could occupy a leading position in this blue ocean market, its future would be limitless.

This vision struck a chord with US investors, prompting them to pour money into Kuxing, allowing Kuxing to aggressively expand its offline presence domestically.

In a short period, not just in first-tier cities, but even in many second-tier cities, Kuxing Coffee outlets dotted the landscape.

With opening stores came the necessity of selling coffee.

But in reality, apart from students and office workers, other groups rarely drink coffee.

Moreover, the hefty price tag of a single cup, which could reach dozens of bucks, wasn't something ordinary folks could bear.

So Kuxing's boss came up with another clever idea, using US investors' money to run promotions.

Though a cup of coffee originally cost dozens of bucks, after discounts, the price was only 9.9.

This attracted a large number of people who originally didn't drink coffee or found it too expensive, to come in-store and have coffee.

Of course, doing this was at a loss.

Soon, US investors began to express doubt.

Now that Kuxing Coffee had its stores and a steady customer flow daily, wasn't it time to profit and offer us returns?

Then.

Kuxing Coffee made a rather amusing move.

They falsified their financial statements, recording discounted coffee sales as sales at regular price.

With this operation, although Kuxing Coffee continued to gain market share through massive discounts and subsidies, its financial statements looked remarkably impressive.

The company even started showing profits on its financial reports!

However, due to various reasons, post-profitability, the company temporarily couldn't distribute dividends to investors.

Yet the investors were already quite satisfied.

The financial statements, the market share, the profits.

The future seemed promising.

Then Kuxing was exposed for falsifying its financial statements.

The short-selling institution chose the simplest way to uncover Kuxing's fraudulent method.

They directly hired a group of college students to count people at Kuxing Coffee's entrances and check receipts inside the stores.

Then they compared the survey data with Kuxing's financial records, exposing the financial statement fraud of Kuxing Coffee.

As a result, Kuxing's stock price has plummeted recently.

The day before the short-selling report appeared, Kuxing's market value was 6.59 billion US Dollars.

After the report was released, Kuxing's market value dropped to 1.62 billion US Dollars, plummeting 75% in one day, directly evaporating 4.97 billion US Dollars.

This also scared Zheng Lu into returning to the country immediately that day.

He had no choice but to come back; staying abroad, one might end up being hit by a big truck and sent to the Otherworld.

In fact, it has been nearly two months since Kuxing was exposed for financial fraud.

The current market value of Kuxing Coffee is 262 million US Dollars.

In other words, this company which once had a market value of over 20 billion RMB, now has a market value of only about 2 billion.

Moreover, the company's founder Zheng Lu is also facing legal pursuit from US investors, demanding that Zheng Lu compensate for their losses.

"My company has actually always operated very well, and there's absolutely no financial statement fraud."

Zheng Lu pretended to be sincere and said to Chen Yiyang, "But you know, once a business grows large, it's easy to attract hatred. So those short-selling institutions colluded with our internal staff to produce the short-selling report, aiming to bankrupt Kuxing."

"What help do you need now?" Chen Yiyang bluntly asked.

It's been his habit all along.

After all, the intelligence has already confirmed that this business has room for a windfall. He just needs to inquire about the demands, fulfill them, invest, and then successfully make a windfall.

"I need a substantial amount of funds to repurchase shares." Zheng Lu said, "The main problem the company faces now is someone within has initiated a vote of no confidence against me.

They pinned all financial fraud blames on me, and the primary demand of US investors is for me to step down first.

But if I step down, everything will be over. I need at least billions of funds to repurchase shares, restore investor confidence, and increase my sway within the company."

Indeed, the windfall savvier from the Imperial Capital would need billions right off the bat.

However, Chen Yiyang thought today's intelligence was quite vague and didn't clearly state how to make the windfall.

That also means this opportunity's windfall method isn't just about providing funds to Zheng Lu.

Yet, Chen Yiyang still asked first, "If I can provide these funds, what do I get in return? Can I get Kuxing's shares or?"

"How about this money counts as a loan from you. We can sign a loan contract." Zheng Lu quickly replied.

"If you want to borrow money, you can just go to a bank." Chen Yiyang retorted bluntly.

For a capital of billions, even if Chen Yiyang could afford it, there's no way he'd sign a loan contract with anyone.

He's not out of his mind.

"I still have some assets, cars, houses, and various things. I can pledge all of them to you." Zheng Lu spoke again.

"No." Chen Yiyang shook his head.

He's a professional in spotting bargains and is well aware of how inflated those asset prices are.

For an apparent asset worth a billion, selling it to exchange money would be a blessing if it could fetch 500 million.

"What exactly do you want?" Zheng Lu could only take the initiative to ask.

"Your equity in hand." Chen Yiyang replied seriously, "I'll directly buy half of the equity in your hand; the other half pledge to me, I'll lend you money."

Chen Yiyang had previously investigated that Zheng Lu holds about 30% of the shares of Kuxing Coffee.

Of course, since Zheng Lu is the company's founder, his equity has significant sway, with 30% of the shares having over 50% of the voting rights.

This is something big company founders deliberately set to avoid being ousted.

Just like Tengxu, although the CEO of Tengxu might own only a few percent of Tengxu's shares, within the company, he still has decisive say, possessing significant stock voting rights.

And Zheng Lu's 30% of shares hold more than 51% of the voting rights.

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