Bab 162: Chapter 162: Financial Issues
After work, due to a party being held, Simon returned to Malibu on time today.
This matter goes back to the purchase of Point Dume Park. After several months of operation, George Norman had already settled matters with the state government, but Simon needed to address the concerns of Malibu's local residents to acquire Point Dume Park.
Although the local residents of Malibu rarely paid attention to Point Dume Park, mostly it was the tourists visiting Malibu who enjoyed climbing up to the cliff's edge to view the seascape. However, Point Dume Park was, after all, a public space in Malibu. Only with the community residents' approval could Simon completely transform it into private property.
The party tonight was mainly to entertain the community committee representatives and some key residents.
Due to Simon's personal habits, the party took place in the villa on the east side of Point Dume Park, belonging to Jenny.
Upon entering, Jenny, who was directing the party company's staff in preparing the site, came over and whispered to Simon, "I've already taken care of it. Our foundation will donate one million dollars to fund the construction of Point Dume Elementary and Middle School, and then we'll also participate in lobbying for Malibu's independent city status. After that, they'll vote in favor of us buying Point Dume Park. Tonight, you just need to accompany them for some food, drinks, and conversation."
The real estate bubble of the 1980s spurred a peak in Malibu's development, but Malibu truly became highly sought after starting from the 1990s, especially after Larry Ellison extensively speculated on Malibu real estate.
Currently, Malibu is not an independent city but a district under Los Angeles County, and it's far from being as celebrity-filled as it would be later.
In recent years, Malibu residents have been seeking to establish their city. According to California law, after achieving city status, Malibu would no longer need to be under the control of Los Angeles County's government and could independently make laws and reject various municipal plans from Los Angeles County's government.
Over the years, as the district rapidly developed, Los Angeles County's government has been trying to extend many engineering projects to Malibu, and Malibu residents have been continuously resisting the county government's attempts to push through highways, sewage pipelines, and even nuclear power plant plans.
It's imaginable that if any of these projects were to be located in Malibu, it would hardly remain a livable paradise.
Therefore.
For Malibu, having a financially powerful tycoon like Simon settle in the area would obviously promote its development. Compared to a state park that's mostly overgrown with shrubs, the residents' choice is obvious.
After the party that evening, there was no longer any suspense about the outcome.
In a mansion on the west side of Point Dume.
In the bedroom, after taking a shower, Simon walked over to the bed where Jenny, who was flipping through a magazine, was sitting. He kissed her on the face and asked, "Did you say you're donating one million dollars to Malibu's elementary and middle schools this evening?"
"Yes," Jenny nodded but then said, "It's not exactly donating, as Malibu doesn't have these schools yet. The residents have always wanted to build them, but unfortunately, the county government won't provide the funds."
Simon lifted Jenny's light body and tossed her to the other side of the large bed, then sat down on the bed himself and asked, "Isn't that a good thing? Why won't they provide the funds?"
Jenny was tossed aside and, pretending to be angry, hit him with the magazine, saying, "The county government wanted to build a sewage pipeline extending from Santa Monica here two years ago, but it was rejected, along with many other things. With the residents being so disobedient, it's no wonder they're unwilling to provide funds."
"Then we should donate more, to build the schools better. Our little ones will have to go to school here in the future."
"One million dollars is already a lot. Besides, our little ones won't be going to school here; they'll definitely attend the best private schools."
"Alright," Simon nodded and said, "The schooling matter is up to the mother to decide."
Jenny giggled, and as Simon was about to turn off the light, she said, "There's one more thing. The shell company that the Iceberg Group helped us set up recently negotiated another building, including the land, for a total of thirty million dollars."
Saying this, Jenny leaned over to open the drawer of the bedside table, took out a document, opened it, and showed Simon a map, pointing out the location.
To replicate the 'Avengers Tower' in Manhattan, Simon needed to buy six buildings between East 59th and 60th Streets, east of Madison Avenue.
Following last year's stock market crash and the bursting of the real estate bubble, this became much easier. The chosen plots were not next to Fifth Avenue, which is considered the 'center of the universe'. The shell company established with the help of Jenny's aunt had previously bought two buildings for twenty and thirty-five million dollars, respectively. Including this building, Simon had secured half of the needed land.
Simon looked at the information for the other three buildings on the map, including a 16-story apartment building, the tallest of the six and obviously the hardest to acquire: "It will be difficult to continue purchasing, won't it?"
Jenny also pointed at that apartment building and said, "It's difficult to persuade the residents of this building to sell their homes together. There are two plans for those unwilling to sell: one is to buy equivalent apartments nearby for them to move into, and the other is to exchange properties with our future building."
"Prefer the first option as much as possible. Our building plans are not yet convenient to disclose."
"I thought so too," Jenny nodded and said, "But, Simon, you need to pay attention to your financial situation lately."
The two buildings had already cost fifty-five million dollars, and with the upcoming expenditure of thirty million dollars, this totaled eighty-five million dollars.
Simon's cashout of three hundred million dollars from Motorola stocks had dwindled after a few months of spending, and James Lebould had been investing in new tech companies according to Simon's instructions. The remaining funds were not enough to cover the upcoming thirty million dollars for the building purchase.
With the income from "Final Destination" and "When Harry Met Sally," Danylyst Film's financial situation was alleviated. But if Simon planned to scout a studio for the company, it would be a significant investment.
Money is needed everywhere.
Moreover, because of the public promise made during the Motorola stock sell-off, Simon would have to wait until next year to continue cashing out funds from the stock market.
"James Lebould will come over from New York tomorrow. I'll talk to him first," Simon thought for a moment and said, "Moreover, compared to the assets in my name, my personal debt ratio is still very low. The banks would definitely be very willing to lend me money, right?"
Jenny said, "Of course, but you actually don't like borrowing money, do you?"
"Yes," Simon nodded and said, "Speaking of which, where did you hide those IOUs I wrote? I should be able to get them back now, right?"
"I'm not planning to give them to you. I want you to owe me for a lifetime."
"That's too cruel."
"Mm-hmm."
The next day, James Lebould arrived in Los Angeles, bringing news that required spending money.
Fortunately, it was all good news that Simon was happy to hear.
"Cisco's new round of financing has been finally valued at 120 million dollars. We invested eighteen million dollars to acquire 15% of the company. Additionally, Quantum-Link, a small company that recently wanted to operate independently from its collaboration with Apple, after negotiations, we invested five million dollars for a 25% stake in this company, and I also secured the right of first refusal for Quantum-Link's next round of financing. Next is…"
James Lebould had recently negotiated equity investments in five companies.
However, Simon was actually only interested in two of them.
Cisco needs no introduction, as this giant, which had a market value of over 600 billion dollars at the peak of the new technology wave in the late nineties, had long been targeted by Simon.
Eighteen million dollars for 15% of Cisco's shares, even if diluted in the future, but even if only 10% remained, at Cisco's peak stock price, this stake's value would reach 60 billion dollars, a return rate of over three thousand times.
Moreover, Simon naturally would not be satisfied with the current shareholding ratio and would definitely continue to increase his stake.
The other company, Quantum-Link, was carefully sought out by Simon.
Quantum's Chinese transliteration is 'Kunten', and the English original meaning is 'quantum', so many technology companies like to use the word Quantum. As for Quantum-Link, this company is still relatively unknown now, but its later name, America Online, is well-known.
Simon's most vivid memory is the collapse of America Online after its merger with Time Warner at the turn of the new millennium.
At its peak, the merged America Online-Time Warner had a total market value of over 300 billion dollars, but just a few years later, as the internet bubble burst, America Online's market value fell by over 90%, and Time Warner was also severely damaged.
However, before the internet bubble burst, America Online was definitely a very worthwhile investment. Moreover, five million dollars for 25% of America Online's shares, considering America Online's peak market value of over 160 billion dollars, is an absolute bargain.
Securing the shares of these two companies, even if the investments in the other three companies were completely lost, it would still be entirely worth it.
"As for San Diego's Qualcomm, they currently have no financing plans, but they also stated that if they have such intentions, they will contact us. Simon, the total amount of these five investments is sixty-five million dollars, but Westeros Corporation's account now has only 28.55 million dollars left. If you're sure there's no problem, we might need to take out a loan."
The cashout of over three hundred million dollars from Motorola, minus some reserved for taxes, Simon spent more than half on increasing his stake in companies like Microsoft and purchasing rights to series like "The Lord of the Rings", among other expenditures.
Now having 28.55 million left is already considered a lot.
Calculating in his mind, Simon also remembered the Gulfstream IV business jet he had ordered, with a bare machine price of sixteen million dollars. Including the renovation costs, it would need about eighteen million dollars.
Simon had only paid a part of the deposit at the beginning, and the plane would be delivered next month, just in time for Simon to fly to Europe to attend the Cannes Film Festival. But similarly, Simon also needed to pay the remaining balance, which was another expenditure.
The budget for the Manhattan building, the investment budget for the five technology companies, and the budget for the private jet alone would need about one hundred million dollars.
Simon could not sell shares of Westeros Corporation. Due to the nature of Westeros Corporation as a limited liability company, it would also be very difficult to publicly issue bonds. Therefore, taking out a loan was basically Simon's only option.
Although he did not like borrowing money in principle, Simon was clear that to rapidly expand his business, borrowing was necessary.
Moreover, compared to Simon's current net worth, just the loan for Danylyst Film, his personal debt ratio was still less than 10%, which is absolutely very low among the wealthy, and banks would definitely be willing to lend him money.
After a thorough discussion with James Lebould, Simon decided to continue taking out a loan of one hundred million dollars.
After resolving his personal financial issues, April also came to an end unnoticed.
Following two weeks of continuous screening, "When Harry Met Sally" reached over seventy million dollars in North American box office, already the threshold for the top ten in last year's North American box office rankings. Although the weekly box office fell below eight million dollars, with the continued screening of this movie, breaking one hundred million dollars in domestic box office was already a certainty.
The selection of the male lead for "Batman" continued, inevitably becoming a hot topic in the media, with a five-picture deal and a fifteen-year contract period, making many people think Simon Westeros had gone mad. This contract was even called 'Hollywood's slave contract' by a newspaper.
Regardless of external comments, Danylyst Film did not show any intention of backing down, still methodically advancing its plans.
While handling the casting for "Batman," Simon was also arranging for those two special effects software companies to move to Los Angeles.
The Wavefront-Technologies company in San Francisco was relatively easy to deal with, as Americans do not have a tradition of being attached to their homeland, and the model of moving houses to trigger plot developments in Hollywood movies and TV shows is almost overused.
Simon selected an office building in Santa Monica, and most employees quickly moved over. The Alias-Research company in Toronto was a bit more troublesome, being a Canadian company and involving overseas labor issues, but it would basically be resolved in the following months.
The matter of the studio.
Simon could see that Amy was clearly very eager for him to buy the MGM.
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