Chapter 417: Pixar Animation goes public, guess what, the film industry's market value doubles
In its third week of release, "Toy Story" earned $25.03 million in North America, and its cumulative box office reached $103 million. The North American box office officially exceeded $100 million, becoming the fourth film of Guess Pictures to exceed $100 million in North American box office this year.
"Guess what, the movie industry is going to sell out the movies in the second half of the year."
Michael Ovitz exclaimed.
Before September, many media outlets joked that Guess What Pictures was on the decline and was about to lose the title of annual box office champion. Now it seems that everyone has underestimated Guess What Pictures and Link.
Michael Eisner smoked a cigarette and pointed to a piece of news in the Wall Street Journal. "Pixar Animation Studios is about to go public. What do you think?"
"The last time I called Link, he told me that if Disney was optimistic about the development of Pixar Studios, it could buy some of Pixar's shares by the end of the year. I originally thought he was going to use Pixar to raise funds, but now it seems that he is more radical than expected and is directly pushing Pixar to go public. This approach is bold, but also very wise."
Ovitz looked at Link's photo in the newspaper and said there was a headline in the newspaper: 'Hollywood King Link's New Move, Pixar Animation Studios Plans to Release on December 20.'
Eisner nodded, agreeing with Ovitz's opinion.
The reason why Link is bold is that Pixar is currently just an animation film production company that has only produced one movie. Although the movie did well at the box office, its performance in the stock market may not meet expectations.
If it fails, the parent company Guess What Pictures will also be affected.
The reason why this approach is wise is that after the release of "Toy Story", the market value of Guess the Movie soared and its profit margin increased by hundreds of millions. Many people in the capital circle were jealous of the profits of Guess the Movie and began to want to share the profits.
Therefore, after the scandal between Link and Diana broke out some time ago, many media took the opportunity to discredit Link and damage his reputation.
These investors used public opinion to stir up trouble and forced Guess the Movies to speed up the financing and listing process.
But no one expected that Link did not let Guess Pictures go public, but instead let his subsidiary Pixar Animation go public first.
This is like throwing a bone to a pack of hungry wolves.
It can not only reduce the external pressure faced by Guess the Movie in its development, but also allow it to reap the benefits when a group of wolves fight each other.
I have to say this trick is amazing.
"This bastard is obviously a director, but he doesn't focus on making movies and winning Oscars, but instead thinks about how to make money and how to make his company bigger and stronger every day. This is too much of a waste of time."
Ovitz said very unhappily.
"This was probably Jobs' plan. Jobs originally intended to take Pixar public to attract more funds to research computer animation technology. Unexpectedly, Link would agree with Jobs' approach after acquiring Pixar."
"Jobs is also a difficult person to deal with. With his help, Link will become even more difficult to deal with." Ovitz cursed again, "Mike, Pixar is going public. Should we buy Pixar's stock?"
"Let's see what happens."
Eisner narrowed his eyes and continued to read the newspaper in his hand.
The news that Pixar Animation Studios is about to go public has also been hyped by media outlets such as The Wall Street Journal, Los Angeles Times, Business Day, and ABC.
Almost everyone in the financial and entertainment circles knew the news and the response was very enthusiastic.
"Toy Story" cost 30 million to produce and grossed over 100 million in North America in three weeks. Although it was not the fastest movie to gross over 100 million this year, it had the lowest production cost.
This shows that computer animation films have great potential. Pixar Animation Studios, which produced this film, is also a company with great potential and a golden goose that lays eggs. In addition, Pixar is backed by Hollywood's most profitable company, Guess What? Pictures, so the potential of Pixar animation will be even greater in the future.
The financial circle is generally optimistic about the development prospects of Pixar Animation and is preparing to buy some shares when Pixar goes public.
On the other hand, the situation in Hollywood is the opposite. Many people expect Pixar to fail in its IPO, with no one buying its shares and eventually delisting in disgrace.
The reason is that Guess Pictures itself is very powerful. If its subsidiary Guess Pictures goes public, Guess Pictures will have both funds and technology, and its performance in movies will be even stronger. As a peer, we may have to live a hard life.
Many people are waiting to see whether Pixar Animation Studios' IPO process will succeed or fail.
——
On the eve of Pixar's IPO, the North American film market entered the Christmas season and box office competition became more intense.
There were no new films released by Guess What this week, but there was one Guess What movie released, which was "Jerry Maguire" starring Tom Cruise and Renée Zellweger, and was promoted and distributed by Columbia Pictures.
"Jerry Maguire" is of good quality, and Tom Cruise and Renée Lauder also have good box office appeal.
The film grossed $33.16 million in 2,531 theaters in its first week, ranking first at the weekly box office.
The second place was the animated film "Beavis and Butt-Head" produced by Paramount Pictures, which earned 20.11 million US dollars in its first week.
"Toy Story" dropped to third place, earning $18.44 million and a cumulative total of 121 million, which is also a good performance.
"Scream" earned $5.09 million this week, and its cumulative North American box office is $98.35 million. It is expected to exceed $100 million next week.
"Dangerous Game", which was released in April, earned $305,000 this week, and its cumulative North American box office reached $96.16 million, with a certain chance of breaking $100 million.
Including the upcoming release of "The English Patient", I guess the studio's total box office this year will not be less than last year.
However, the most exciting news in Hollywood this week was not that "Jerry Maguire" won the box office championship, but that Pixar Animation Studios, the production company of "Toy Story", went public.
On December 15, a week before Christmas, under the operation of Guess Pictures executives and Steve Jobs, Guess's subsidiary Pixar Animation Studios was listed on the New York Stock Exchange with the trading code PIXR1.
The original planned stock offering price was $14, with a valuation of $1 billion.
But Steve Jobs believed that the box office of "Toy Story" was growing well, and the capital circle was generally optimistic about Pixar's development, so he might as well be bold in pricing and raise the issue price to US$22.
After receiving the news, Link agreed with Jobs' proposal.
As it turned out, Jobs' prediction was accurate, and the capital circle and ordinary investors were very enthusiastic about Pixar's listing.
Half an hour after the market opened, investment companies such as Vanguard Investments, Morgan Capital, Goldman Sachs Investments, and Flash Capital bought large amounts of Pixar Animation shares.
Pixar Studios stock price quickly soared from $22 to $45.
The market value also grew rapidly to US$3.2 billion, like a bubble.
Because there were too many buyers at the same time, many transactions had to be delayed.
The stock price continued to rise to $52 that afternoon and finally closed at $43.
The market value of Pixar Animation Studios has more than doubled from last year to a staggering $3.1 billion.
After Pixar Animation Studios went public, Guess What Pictures retained 46.3% of the shares, Jobs retained 1.2%, Disney bought 12.17% of the shares, and the remaining shares were bought by Wall Street investment companies and retail investors.
Guess What Pictures earned $1.5 billion from this operation, with Link's personal share exceeding $700 million, Jobs and the main person in charge of Pixar Studios receiving about $200 million, and other shareholders and management receiving tens of millions to millions.
As Guess What Pictures owns 46.3% of Pixar shares, its market value has been further increased. A Wall Street investment consulting firm estimated it to be between 6.5 billion and 7 billion US dollars, making it the fourth largest film company in the film industry after Disney, Warner Bros., and Paramount.
"3.1 billion? How can a small studio like Pixar be worth 3.1 billion?! Those shareholders are crazy!"
Michael Ovitz looked at the numbers in the newspaper with shock on his face. His head was dizzy and he saw stars, as if someone had hit him hard on the back of the head with a club.
Last time he called Link, he offered to buy Pixar Animation Studios.
Link offered $2 billion.
He felt that Link was just bidding a random price and had no sincerity at all, so he bargained down to US$1 billion.
Link didn't agree, saying 2 billion was the lowest price.
When Ovitz saw that Link had no intention of selling Pixar, he stopped pursuing him.
But what he didn't expect was that after Pixar went public, its market value soared to 3.1 billion US dollars, much more than 2 billion. Moreover, when Pixar went public, its stock price rose to 52 US dollars, and its market value once reached 3.6 billion, almost twice as much as 2 billion.
If he had accepted Link's offer at the time and invested 2 billion to acquire Pixar, he would have made more than 1 billion dollars in one transaction.
More than ten billion!
He has worked in Hollywood for more than 30 years and has never earned this much money.
Ovitz's heart was bleeding. If time could go back one month, to the day when Link offered $2 billion, he would have agreed without hesitation, then pushed Pixar to go public and made more than $1 billion by reselling it.
The person who will regret it to the point of vomiting blood at that time will be Link.
Haha~
Unfortunately, time cannot be reversed.
Ovitz smiled bitterly.
"Mike, don't regret acquiring Pixar."
Eisner said that after Ovitz talked with Link and told him about the negotiations, he still did not agree to acquire Pixar for $2 billion.
“The reason why Pixar was so popular with Wall Street investment companies and its market value skyrocketed after its listing is that, on the one hand, computer animation technology has great potential and Pixar’s stock has investment value. On the other hand, it is also related to Guess What? Pictures.
The probability of success of movies released by Guess What? is extremely high. Investors buy Pixar shares because they have confidence in Guess What?'s production capabilities. If we were in charge, Pixar might not be able to reach over 3 billion.
Ovitz nodded reluctantly. Although it would not reach over 3 billion, the successful listing of Pixar undoubtedly showed that the company had great potential, and spending 2 billion US dollars to acquire it was definitely worth it.
Unfortunately, neither he nor Eisner had the courage at the time.
"Link, that bastard, made a lot of money this time."
Ovitz was filled with envy and jealousy.
Originally, Link's net worth was 6 or 7 billion US dollars. With this wave of operations, his net worth has steadily exceeded 10 billion. Combined with other investments, this bastard's current net worth will not be less than 14 billion US dollars, and he is only a few billion away from becoming the world's richest man.
Back then at the Oscar party, a small character like Link didn't even have the qualifications to see him. Four years later, Link has become someone he needs to look up to.
Damn it!
Eisner waved his hand while holding a cigarette, "Don't think too much, it's useless to think about it. Link is a powerful guy, just be careful when doing business with him in the future.
In addition, after Pixar went public, Guess What Pictures will become even stronger, and its box office share will continue to grow, further squeezing the living space of other film companies. What we should consider now is how to ensure that the company continues to make profits in the face of competition from Guess What Pictures, and not be left behind by other film companies."
"I understand. What suggestions do you have for this matter?"
"Guess the Movies is growing too fast, and we, the seven major companies, have failed to suppress it. Now we can only continue to cooperate with Guess the Movies, and this cooperation is mainly in the field of animated films.
Pixar has the technology, and we have countless animation IPs and technical talents. The deep cooperation between the two companies can ensure Disney's advantage in the field of animated films. And this kind of cooperation is also good for Guess Pictures. I believe Link will not object."
Eisner said slowly.
Ovitz nodded. This idea was indeed a good one. Disney started producing animations in the 1920s, and there were countless classic animation IPs in its film library. In addition, Disney had an advantage in the distribution of animated films.
Pixar Animation has many technical patents and the capital support of Guess What Pictures.
In-depth cooperation between the two companies is indeed a win-win choice.
The only thing that made him unhappy was that after the two companies cooperated, Guess What Pictures would gain significantly more benefits, and Link's power in the film industry would be further increased, so great that no one could threaten his position.
But it is not possible not to seek cooperation with Guess the Picture. Disney's foundation in the film industry is animation. If it cannot reach a cooperation with Guess the Picture, its foundation will definitely be shaken and even affect the survival of the company.
Therefore, cooperating with Guess Pictures is not a question of whether or not to do so, but a necessity.
Thinking of this, Ovitz became even more annoyed. If he had known that this bastard Link would cause such great harm to the company, he should have taken ruthless action in 1993 when Link was still an unknown person, and used the most powerful means to suppress him, forcing him to get out of Hollywood or disappear directly.
Unfortunately, it's too late.
The only thing that comforted Ovitz was that the "poison pill plan" had not yet been discovered by Link. He hoped that this plan would allow Link to fall hard and vent his anger.
(End of this chapter)
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