Chapter 265: Cisco
Chapter 265: Cisco
Seeing Eric nod, Chris let out a sigh of relief before continuing, “However, Eric, if—and I mean if—you can ensure that Firefly continues developing this rapidly, then it would actually be best not to take the company public.”
“Many companies spend years trying to privatize themselves after going public. Although going public allows a company to obtain massive financing, it also means more responsibilities and risks. Take Hollywood for example. Nearly all the major studios have suffered hostile takeover attempts at some point. The most recent case was in 1984, when Saul Steinberg launched a hostile attack against The Walt Disney Company. In the end, Disney had to spend 325 million dollars to buy back the 11.1% stake Steinberg held. Back then, Disney’s market value was still under 2 billion dollars. Losing over 300 million dollars in cash seriously damaged the company, forcing them to abandon family-style management and hire Michael Eisner as the company’s leader.”
At this point, Chris smiled slightly and added, “Of course, it’s now proven that Disney made the correct decision back then. You could say they turned misfortune into fortune. But not every company is that lucky. Firefly is developing so quickly right now that once it goes public, it’ll attract even more greedy eyes.”
Eric listened patiently, nodding from time to time.
By the time Chris finished speaking, Eric had already made up his mind. Firefly might as well never go public at all.
“Chris, if Firefly never goes public, would that be okay?”
“Of course,” Chris answered without hesitation. “Most companies go public to raise more development capital. In my opinion, Firefly doesn’t lack money, so why should it go public?”
While the two were talking, Jeffrey came out of the kitchen and called them over for dinner.
At the dining table, Eric also met Chris’s girlfriend.
Her name was Emily Brighton. She had a tall figure, blonde hair, blue eyes, and dressed fashionably. During introductions, Eric learned that she was a vice president at a company called Brighton Clothing Company.
Judging from her surname matching the company’s name, along with her age making it impossible for her to have started from nothing, Eric did not even need to guess to know she was definitely the daughter of the company’s owner.
Emily Brighton was far more talkative than Chris.
Upon seeing Eric, she even let out the kind of excited squeal only fans made, saying how much she loved Eric’s movies and so on. During dinner, she enthusiastically described in detail how she and Chris met, while constantly encouraging Aniston to become the spokesperson for her family’s fashion company.
Facing Emily Brighton’s enthusiasm, Aniston clearly did not know how to refuse and could only cast pleading glances toward Eric.
Although the little girl was only a television actress for now, she had already become quite famous thanks to Friends. Meanwhile, Emily Brighton’s family fashion company was not particularly well known. If Aniston endorsed them now, it would somewhat lower her status.
Before Eric could speak, Chris noticed Aniston’s awkwardness and proactively stepped in.
“Amy, can you quietly eat dinner? Your family company’s too small. I think using some second-tier celebrity as spokesperson is already enough.”
Emily immediately became unhappy after hearing that and complained coquettishly, “And whose fault is that? If you hadn’t ruined the IPO, our company’s three factories in Florida would already be completed by now. And there was also that 9-million-dollar order from Asia…”
“How is that my fault? Your father was the greedy one. He falsified company information and got caught.”
“He only got caught because you discovered it!” Emily looked wronged as she complained, “Every company does that when going public. Why can’t we?”
Chris put down his knife and fork and raised his voice.
“Do you even realize how much your father falsified? It’s a good thing I found it first. If the U.S. Securities and Exchange Commission had discovered it, your family company would already have been fined into bankruptcy.”
Hearing the anger hidden in Chris’s tone, Emily shrank her neck guiltily and muttered softly, “But my dad corrected it afterward, and you still…”
“That was Mr. Hockridge’s decision, not mine. Don’t forget that your family nearly caused him to lose his job. The fact that he didn’t pursue the matter further was already generous enough.”
Eric exchanged looks with Drew and Aniston sitting on either side of him.
This… seemed like it was turning into an argument?
Please do not break up on the spot. Otherwise, the three of them would really become sinners tonight.
Just as Eric silently prayed inwardly, Jeffrey, seated at the head of the table, slowly coughed twice.
“Ahem, enough. Stop arguing.”
Chris and Emily, who had already “entered the zone,” instantly snapped back to reality upon hearing Jeffrey’s voice and hurriedly shut their mouths.
To keep the atmosphere from freezing over, Eric proactively started changing the subject, and the dinner atmosphere gradually became lively again.
After the meal, Emily pulled Aniston and Drew into a room to gossip together, leaving only the three men in the living room.
Only then did Eric apologetically say, “Sorry, Chris, about what happened at the table just now…”
“Eric, it has nothing to do with you. Don’t worry about it,” Chris shook his head.
Jeffrey also sighed emotionally at this moment.
“This is actually pretty nice too. Couples arguing occasionally isn’t a bad thing. Back when Solina was still around, the two of us argued often too.”
“Dad, can we not talk about those things anymore?”
“Alright, I won’t,” Jeffrey nodded, knowing his son meant well.
As they continued chatting, Eric gradually steered the topic toward subjects he was more interested in.
“Chris, are you familiar with foreign exchange trading?”
“I know a little about it, but I’ve never personally participated in those projects. I currently work in the securities department.”
“Then do you trade currencies? Like the yen, for example. The yen’s been appreciating a lot lately, hasn’t it?”
Chris shook his head.
“The yen has already doubled in value by now. Even if you have money, entering the market at this point won’t earn much anymore.”
Eric froze briefly and somewhat regretted not paying more attention in his previous life to the history of Japan’s economy during this period.
Since Chris said that, Eric had no choice but to let it go.
However, another enormous opportunity still had not arrived yet.
“So what about the ruble? Do you know much about the Soviet ruble?”
Chris advised him, “Eric, I think you should honestly stick to making movies. The foreign exchange market isn’t something everyone can play with.”
“Take the yen for example. Although it’s doubled in value over the past few years, international speculative capital hasn’t earned the terrifying profits you imagine. The federal government merely used yen appreciation to weaken the competitiveness of Japanese goods in international trade, causing Japanese capital and corporations to flee overseas in large numbers, ultimately leading to the collapse of Japan’s economic bubble and economic stagnation.”
“Alright, but I mean… haven’t you noticed that the Soviet Union seems close to collapsing?”
Chris shrugged.
“That’s certainly possible. But who knows when the Soviet Union will actually collapse? And even if the Soviet economy does crash, because that country strictly controls the ruble’s foreign exchange ratio, we still can’t interfere.”
“Fine, but imagine this possibility,” Eric continued. “What if the Soviet Union’s dozens of member republics split apart and all restore capitalist systems? At that point, because of the economic chaos, the ruble would definitely plummet in value. Wouldn’t that be an excellent opportunity?”
Chris and Jeffrey exchanged glances before both looking strangely at Eric.
After a moment, Chris laughed.
“Eric, if you publicly announced that opinion, the whole world would welcome it. If the Soviet Union really collapsed, nobody would need to fear nuclear war anymore. Back then, the ‘Big Ivan’ explosion that nearly blew apart the Arctic Circle scared the entire world badly enough already.”
Eric felt somewhat helpless.
Although the revolutions in Eastern Europe had already happened and East and West Germany had reunified in August of this year, there were still almost two years before the Soviet Union’s collapse in his memories.
Moreover, after nearly half a century of rivalry between the United States and the Soviet Union, although the USSR had repeatedly been demonized, its strength was undeniable. Very few people could imagine such a superpower disintegrating within just a few months.
“Then let’s just make a hypothetical assumption,” Eric continued. “If possible, once the Soviet Union collapses and the ruble crashes one-sidedly, if I took out 1 billion dollars to speculate on the ruble using leverage in the hundreds, could I multiply that money dozens of times over?”
Jeffrey showed no reaction, but Chris looked at Eric as though he were an idiot.
“Forget 1 billion. Even if you used 10 billion dollars, if you dared to use leverage exceeding 100 times during the kind of violent financial turbulence you described, your money might be wiped out within minutes.”
Eric blanked out.
“Uh… alright. I don’t really understand this stuff.”
Knowing Eric had never attended college and was merely an ordinary high school graduate, Chris patiently explained:
“Take the 100x leverage you mentioned. If you invest 1 billion dollars, you could amplify that into 100 billion dollars for foreign exchange trading. But your 1 billion only equals 1% of that 100 billion, which means you can only withstand a 1% fluctuation in exchange rates.”
“Even if the overall trend of a currency is falling, because of the struggle between buyers and sellers, there will still be violent fluctuations throughout the process. As long as that currency rises more than 1% during any stage, whether your capital is 1 billion or 10 billion, your position would immediately be liquidated.”
“Normally, foreign exchange markets typically use leverage around 20 to 30 times. Occasionally, some people take risks with 50x leverage.”
“Uh… alright,” Eric laughed awkwardly and shrugged. “Pretend I never said anything.”
Seeing Eric’s awkward expression, both Chris and Jeffrey laughed.
Chris added, “The more violent the financial turbulence, the lower the leverage used to ensure capital safety. If you truly encounter a good opportunity, taking 1 billion dollars into the market and doubling it would already be extremely impressive.”
Since foreign exchange clearly was not something he could handle, Eric felt it was still better to invest in fields he actually understood.
And aside from movies, the field he knew best was the IT industry, which would grow faster than anything else over the next twenty years.
There was no opportunity left with the major software companies.
The internet had not yet truly developed, and the timing for various internet companies had not arrived yet either.
As for hardware, Eric had long had his eyes on Apple Inc., but unfortunately, “Jobs” still had an uncertain future ahead of him, and Apple was nowhere near bankruptcy yet.
So what else was there?
After pondering for a moment, one name suddenly surfaced in his mind.
Cisco?
Cisco!
Eric slapped his forehead, nearly jumping up in excitement.
In his previous life, that giant had once surged to a market value of 500 billion dollars.