Game Theory (5)
There was a great deal of money moving through the market.
Money didn’t wear a label, but if you looked closely enough, you could trace its path from where it came and where it was going.
Alex analyzed Continue Capital’s financial firepower.
Was the Thomas Motors incident something they triggered as a way to raise acquisition funds?
The profits from that trade could not have been more than ten billion dollars.
Then how much principal had they started with?
If they’d had more money, they would have invested more. The fact they didn’t means the original stake couldn’t have been that large.
At the time they had first come looking for him, they probably hadn’t even had five hundred million dollars.
He judged the situation with a cold eye.
What, exactly, was Continue Capital after?
Did they truly want to acquire Cooloud, or were they just trying to squeeze out a settlement?
From Alex’s perspective, the best outcome was to force a settlement within reasonable bounds.
If they wanted equity instead of cash, he was willing to give up a certain amount. But he had no intention of handing over the company, not even a little.
This was a company whose value would rise over time. That was why he had deliberately held off on taking investment and delayed the IPO.
Selling it now for a bargain price would be stupid.
The other side had given him three days.
That meant if he didn’t agree to a sale within three days, they would launch an attack.
Setting a deadline like that and applying pressure was a common private equity tactic. The moment he entered talks within their timetable, he was already starting from behind.
Alex had no intention of being dragged around by them.
Legal action and exposure were the strongest cards they could play. The instant they used them, the acquisition talks would be over.
If they really want the acquisition, they won’t be able to expose anything even if the deadline passes.
And even if they did expose it, all Rolf would have to do was take responsibility and leave the company. Either way, after that, the initiative in the talks would shift to Cooloud.
While he was thinking through countermeasures, his younger sister called.
Erica Preston spoke warmly.
“You asked me to look into that Korean man last time, remember?”
“Han Miru?”
After their first meeting, Alex had felt something off and asked the family to investigate Han Miru.
At first he had thought the man was an investor who had funded Continue Capital, but to his surprise, he had turned out to be an ordinary office worker.
At that, Alex gave a wry smile.
If he really had good instincts, he wouldn’t have failed to notice Rolf’s lies.
“Wasn’t the Thomas Motors incident led by David Lockhart? He was the one who started the investigation and wrote the report.”
“What connection could Han Miru possibly have to Huaan Energy?”
He thought about it for a moment, then nodded.
“Could be.”
Maybe it had been easier to persuade them because they were both Korean.
Any American would have known about it.
Back then, false reports that the plane had exploded in midair because of terrorism had thrown the entire country into chaos, and even the financial markets had rattled.
“What does that have to do with what we’re talking about?”
The moment he heard that, one face surfaced immediately in his mind.
“Don’t tell me...”
Alex was speechless for a moment.
“Is there any chance he had something to do with the explosion?”
She let out a small laugh.
“Huh? Are you kidding?”
That had been a plane carrying a senator.
Of course it would have been investigated thoroughly, and if anything suspicious had been there, they would have found it.
“Isn’t it strange if that was just a coincidence? If it was luck, then it was extraordinary. I’d like to meet this guy myself and see what he’s really like.”
After hanging up, Alex fell into thought.
He had saved a plane carrying a senator from disaster?
Does that even make sense?
And yet, if he thought about it, everything else had been the same. The man had done absurd things as though they were nothing at all.
So what about this time?
He had a bad feeling.
Maybe it’s better to cut Rolf loose first.
Founders getting forced out of their own companies wasn’t exactly rare in Silicon Valley.
After a moment’s thought, he called his partner.
It rang for a long while before Rolf finally answered.
“What is it?”
If Alex was cautious and serious, Rolf was bright and easygoing. But now there was no strength in his voice at all.
Alex spoke in a soothing tone.
“Delegate your shares to me until this situation is resolved.”
At the moment, he was the only one who would stand by Rolf’s side. He had expected an easy yes, but the answer he got was unexpected.
“I can’t.”
“Why not? Don’t tell me you don’t trust me.”
“No.”
“Then delegate them to me. You’re not seriously thinking of facing those bastards yourself, are you?”
“It’s not that I don’t want to. I can’t.”
“What do you mean?”
“Because I already sold all my shares to Continue Capital.”
Alex was stunned.
“Is that true?”
It had only been one day.
And already he’d sold everything?
“How much did they pay?”
Had they really offered some absurd sum?
“One billion dollars.”
“...What?”
For a moment, he thought he had misheard. Or maybe Rolf had said it wrong.
“How much?”
“I sold it all for one billion dollars.”
That stake was worth at least three billion dollars. The money Rolf had poured into it alone came to nine hundred million.
And he had handed all of that over for just one billion?
“Why?”
“Because they said they’d keep the secret and not file charges or lawsuits if I did it that way.”
“...”
So he had chosen to sell for a pittance rather than be humiliated by the truth coming out?
It was hard to understand.
Why was he so obsessed with his reputation?
“And you believed them?”
“Why wouldn’t I?”
What they wanted was the acquisition of Cooloud.
Once they had bought the rights, exposing who the developer of Minerva was would be of little significance. So maybe the secret would stay buried after all.
Even so, to give up all his shares...
Alex nearly shouted.
“Damn it! Do you even know what you just did?”
If he had at least secured his own share properly, this wouldn’t have been so ridiculous. But one billion dollars?
“What’s wrong with me disposing of my own shares?”
Whatever he did with his own stake was his business. But before that, it was only common sense and courtesy to discuss it with his partner.
“Do you hear yourself right now?”
He barely restrained the curse he wanted to spit out.
“Be honest with me. Weren’t you planning to kick me out of the company?”
Alex flinched inwardly, but kept his tone calm.
“Who said that? Don’t tell me you bought into what those guys said.”
“Then you’re saying that isn’t true?”
“...”
At this point, even if he denied it, Rolf wouldn’t believe him anyway. And now that the shares had already been sold, belief was meaningless regardless.
There was no way to undo the contract now.
Alex thought coldly.
Rolf’s stake was 31.16 percent. Less than one-third of the total. By itself, it couldn’t accomplish anything.
And with this deal, Continue Capital had lost its most important card.
They said they’d drop the charges and keep the secret?
The worst-case scenario Alex had imagined was that exposure and lawsuits would shut down Minerva’s use entirely.
But because of Rolf’s contract, they could no longer pursue charges or wage a public opinion war.
Either way, the rights were still on the other side, so they wouldn’t be able to use them as freely as before, but they could probably settle for royalties.
Was money the goal from the start?
From Continue Capital’s point of view, buying Cooloud’s 31.16 percent stake at a bargain price and taking a slice of revenue as royalties would still be an incredible deal.
But...
Was that really all?
As he was thinking that, Rolf said something unexpected.
“I didn’t have a choice. Sid jumped to their side too. What was I supposed to do?”
“What do you mean by that?”
“Exactly what I said. Continue Capital and Sid joined forces. No, come to think of it, maybe they were on the same side from the very beginning.”
The moment he heard that, Alex realized something important.
Originally, his own stake had been 38 percent, and PrestigeA PE had held 20 percent. Together, that made 58 percent—firm, unquestionable control.
But after they boosted Sid Lucas’s stake, his own had fallen to 32 percent, and PrestigeA PE’s to 16.84 percent.
Together, that made 48.84 percent.
By contrast, Rolf and Sid together now held 51.16 percent.
If they had been on Sid’s side from the start, then merely buying up Rolf’s stake would give them a majority and let them control the company!
They weren’t trying to take Sid away.
They hadn’t intended to poach Sid at all.
Their real goal had been to increase Sid’s stake and dilute his own.
At this rate, the one getting forced out of the company would be none other than Alex himself. But even if he were driven out, his 48.84 percent stake would still belong to him.
So if they take control, they won’t need to acquire my shares?
He thought for a moment, then realized that wasn’t quite right.
Even if they avoided lawsuits over Minerva’s unauthorized use, they would still need to negotiate royalties. But what if Continue Capital seized control of Cooloud’s management?
Then they could set those royalties however they pleased.
Cooloud’s corporate value wasn’t high because it had a lot of assets. It was high because of the enormous profits it would earn in the future.
And if Continue Capital took all of those profits away?
Of course the company’s valuation would collapse. If they didn’t want to sit back and watch that happen, they would eventually have no choice but to sell their stake.
It went beyond surprise. He felt awe.
Unbelievable. Had they been planning this from the start? How many moves ahead were they seeing?
He had been completely outplayed before he could even lift a hand.
Once he understood the truth, Alex let out a short laugh.
“Ha...”
---