Chapter 540 Taking Advantage of His Illness (Correction): The State Will Provide Support
The recent drop in the Nasdaq is actually quite interesting.
Because, generally speaking, a stock market decline has a trigger. This trigger is either a financial crisis elsewhere that affects the market, or a major scandal that breaks out in the market.
For details, please refer to the US stock market crash more than two years ago.
But this time, the Nasdaq's drop really left many people feeling baffled.
The trigger for this incident wasn't really bad news.
On the contrary, it can be called a major positive piece of news.
As we all know, telecom giants have made a fortune in the past two years amid the boom of the internet economy.
So in early March this year, the giants gathered in New York to hold a celebration banquet.
During the meeting, the head of WorldCom, the second-largest telecommunications company in the United States and the second-largest long-distance telephone company after AT&T, announced plans to acquire Sprint for $129 billion.
The latter is a global communications peer, ranking third in the United States.
The banquet caused an uproar because it was the largest corporate acquisition in American history.
Once this acquisition is completed, WorldCom will immediately become the No.1 company in the United States and even the world.
Logically speaking, shouldn't this be good news? It would be a perfect opportunity to grow bigger and stronger, and create new glories.
If you don't believe me, just look at how UMC (United Microelectronics Corporation) in Taiwan became a behemoth after consolidating its five businesses last year. Didn't its stock price skyrocket?
In early January of this year, TSMC announced its formal acquisition of World Semiconductor for US$5 billion. Did its stock price rise accordingly?
How come when it came to World Communications, it was like a bolt from the blue, directly causing the Nasdaq index to plummet?
WorldCom is very good at mergers and acquisitions. In 1998, it successfully acquired MCI Communications and used this acquisition to expand its scale significantly and become one of the top companies in the industry.
Why isn't it working now?
The professionals are busy analyzing it.
Some say it's just a coincidence, and the stock price drop is simply a normal market adjustment.
Some argue that the Nasdaq's decline had nothing to do with WorldCom. They suggest that after a weekend, Monday's market opened normally, but coincidentally, billions of dollars in sell orders from tech giants like Cisco, Microsoft, and Dell were dumped, triggering panic.
Of course, some rational and cautious analysts have pointed out that this is a manifestation of the fact that the internet economy bubble has reached its peak and can no longer be sustained.
However, Wang Xiao believes that all their analyses combined cannot compare to Ms. Chen Yanqiu's incisive insight.
When Old Chen heard the news anchor announce the figure of 129 billion US dollars, he gasped in shock and instinctively turned to look at his daughter: "Good heavens! How big is this Sprint Corporation? Is it made of gold? 129 billion US dollars!"
Jiangdong Province has a population of over 70 million, and the combined GDP generated last year did not even reach this figure!
Can a company really be worth that much?
It feels like it's not on Earth.
Wang Xiao laughed and nodded repeatedly, "Mom, what you said makes so much sense."
She suddenly realized that there were two very obvious signs that the stock market had started to turn bearish.
The first is the well-known one: when everyone is discussing one thing, that's when investors should exit the market.
The second point is what her mother just said: when ordinary people feel that it has become something from another world and has nothing to do with them, it also means that the stock price is about to plummet.
Ordinary people feel that this has nothing to do with them, which means that new funds are drying up! Without more buyers to take over, who will support the market?
The more Wang Xiao thought about it, the more sense it made. She gave him a thumbs up and said, "Mom, you're amazing! You're much better than the experts."
Chen Yanqiu looked her daughter up and down suspiciously. Was she being sarcastic? What did she know about finance?
Wang Xiao swore, "Why would I lie to you, Mom? You've hit the nail on the head. The internet economy is so frenzied that company valuations no longer depend on profits, but on a grand narrative that can 'change the world.' To put it bluntly, everyone's caught up in the hype and is paying for emotional value. Once that hype starts, the hype will come down."
Chen Yanqiu felt that she still didn't understand.
But she's not in finance, so why insist on figuring it out?
She only cared about one thing: "Did your company's stock price also drop?"
Wang Xiao took out strawberries from the fruit plate; strawberries are sweet this season.
She nodded as she took a bite: "It's bound to fall, it'll fall, no one can escape it."
From March 13th to March 15th, in just three days, the Nasdaq fell to 4528 points, with its market value evaporating by nearly 10%. We're all in the same boat; you can't escape me, and I can't escape you either.
Chen Yanqiu asked worriedly, "How long will this decline last? What will your company do?"
Wang Xiao is very straightforward: "It's just hitting rock bottom, there's nowhere left to fall."
Chen Yanqiu was truly distressed: "Oh dear, why don't you take this seriously, girl?"
In this era of market economy, Chairman Chen frequently travels abroad, so he has seen many glamorous and wealthy people suddenly go bankrupt.
Especially during the Asian financial crisis a couple of years ago, oh my, so many people suddenly found themselves on the streets.
Wang Xiao laughed and leaned against her, teasing her, "If that day really comes, will you and my dad not care about me?"
Chen Yanqiu hugged her daughter tightly, stroking her face, her expression full of unspeakable emotions: "Who cares about whom, you debt collector!"
There's never a day that's easy for me.
Oh dear, luckily she's a division-level cadre, and she chose to delay her retirement until she's 60. That's good too; she can earn money for a few more years, and if something bad happens in the future, at least she can ensure that Xiaoxiao and Ivan have enough to eat.
Oh dear, if you don't want to pressure Xiaoxiao to have a baby, then don't. Raising children these days is not like before; every child is a little emperor or princess, and raising a baby costs a lot of money.
She also comforted her daughter, saying, "It's good to take a break. If you're busy with work all day long, you won't have a life. People need to work and live, and you have to do both well."
Wang Xiao laughed and fell into Chairman Chen's arms.
She thought, this is good.
Although she is an emotionally detached person who has little expectation for family, love or friendship—this is not her fault, since her original family before she transmigrated was a huge tragedy.
The writer Li Juan once said: "When I needed love the most, I was never deeply loved. Later, no matter how much love I received, I didn't care."
Wang Xiao thought it made perfect sense.
So what's so strange about her being emotionally detached?
But now, nestled in Ms. Chen Yanqiu's arms, I feel her warm embrace and gentle caresses.
She felt very comfortable too.
Even if this emotion is directed at this body, it is a normal mother's instinct for her daughter, and has nothing to do with her true soul.
So what? She is the owner of this body now, and she is the one who receives this love.
She was happily being petted, reaching out to stroke the kitten, and eating strawberries all the while.
As for bankruptcy or something? Pshaw, I can't say such unlucky things.
Besides, who's going bankrupt? The Nasdaq is falling, the bubble is bursting—it's clearly major positive news, and the market is giving her an opportunity.
She would be doing a disservice to God's gift if she didn't seize the opportunity.
Unfortunately, those with the same awareness as Mr. Wang are still a minority, or rather, a minority among the minority.
Even her executives couldn't smile at the plummeting stock price.
In April, when Wang Xiao held a meeting for them, Mingming saw flowers blooming and trees swaying outside the window, birds flying in flocks and kites circling around, and a scene of joyful laughter.
The room, however, was gloomy and seemed ready to rain at any moment.
Boss Wang walked into the conference room and looked at the listless people, not knowing whether to laugh or cry: "What's going on? Are you all saying you didn't get paid this month, or didn't get your bonuses?"
Website CEO Zhang Tao smiled wryly: "Boss, I'm really worried that we won't be able to publish it later."
The storm is brewing, and the air is thick with tension; it's truly a time of great anxiety and fear.
When the stock market first started to decline in March, people comforted themselves by saying it was a normal market adjustment.
On March 20th, The Wall Street Journal published a front-page article publicly questioning whether Goldman Sachs had favored certain clients in the IPO allocation. This directly shook the market's confidence in the fairness and value of IPOs.
By April, the situation had worsened.
On April 3rd, yes, that is, April 4th Beijing time, this year's Qingming Festival, the bad news came: the court ruled that Microsoft violated the Sherman Antitrust Act.
Microsoft's stock price plummeted in response.
Even more alarming, it sparked market concerns about the potential breakup of tech giants. Star tech stocks plummeted in droves.
This naturally includes "I buy" and "I," with the former falling even more sharply.
Zhang Tao wasn't even this sad when visiting graves; he can't laugh at all right now.
He was indeed prepared, knowing that the dot-com bubble was likely to burst.
But the problem is that knowing something and it becoming a fact are two different things.
A stock price plunge means money is flowing out of the market.
And you don't even know how long it will keep flowing.
He now truly understands what it means for money to disappear like water, leaving no trace.
Wang Xiao laughed and said, "Isn't it a good thing that the water has flowed away? Running water doesn't stagnate, and a frequently used door hinge doesn't rust!"
The internet executives sitting around the conference table were speechless. Boss, could you please stop quoting ancient sayings so casually? What's the connection between the two?
Actually, even Boss Wang herself wasn't sure if there was any connection; she was just saying it casually.
Whether there's a connection or not doesn't affect her continued smiling: "So what exactly are you all worried about?"
Zhang Tao was at his wit's end, so he had to bite the bullet and emphasize to his boss that they were really worried: "Investors are all watching and waiting, and it will be very difficult for us to raise funds in the future."
Thank goodness the boss didn't have that "why do we need funding?" attitude.
She just smiled and said, "Are we the only ones having trouble getting funding?"
Zhou Liang replied, "Everyone is facing difficulties, and the market sentiment is quite pessimistic right now."
That's how investors are; they're always oscillating between fear and greed. And confidence is like a breath—once it's gone, it's hard to get it back up.
Wang Xiao nodded in satisfaction: "That's a good thing, it means everyone is broke."
Listen to the boss, are you even speaking human language?
Just because everyone is going through a tough time doesn't mean we're happy while we're going through a tough time.
Seeing the complicated expressions on everyone's faces, Wang Xiao laughed even harder, his gaze landing on Zhang Tao's face: "I'm asking you, who is our website's biggest competitor right now?"
Zhang Tao blurted out instinctively, "Amazon and eBay."
The situation with INet is unique; currently, there are no competitors on the entire network.
However, Ibuy, Amazon, and eBay are known as the three pillars of e-commerce.
eBay, which uses online auctions, takes a different approach from the other two, so Ibuy and Amazon should be considered equally matched competitors.
Wang Xiao smiled enigmatically: "Are you sure we merchants are competing with each other? Have we been fighting each other for the past year?"
Yang Tao shook her head: "No, the three of us are actually coexisting peacefully. Our target customer groups are somewhat different. Our main competitors now are newly emerging shopping websites."
She smiled wryly, "They offer far too many subsidies to grab customers and traffic."
This is inevitable.
Small workshops like this tend to use ingredients lavishly. The level of subsidies they offer is clearly a pure money-burning tactic to attract customers.
Wang Xiao clapped his hands: "Isn't that the solution? Once the subsidies stop, the customer base drops to zero. They can't get financing anymore, the money runs out, and naturally they'll go bankrupt."
She walked to the window and pulled it open forcefully. The April breeze was filled with sunlight, as soft as if it were wrapped in honey.
The sounds of children laughing and whistling from kites in the park outside were overwhelming, and some people were clapping and screaming.
Because a bubble machine was blowing bubbles out onto the grass in the park.
Those bubbles trembled and expanded into tiny worlds, containing the reflection of the entire spring—the upside-down sky, the miniature tree canopy, and children jumping around.
Sunlight shines through the thin membrane of the bubble, refracting into arcs of seven colors, like countless miniature, floating rainbows.
Then, they floated and floated, and one bubble drifted to the window and landed on Wang Xiao's outstretched hand. With a "pop," it burst, leaving behind a little white foam.
Wang Xiao chuckled and rubbed his fingers together: "Soap bubbles, huh? The reason it's called a bubble economy is not only because it's easy to burst, but also because it's a soap bubble, a detergent, the best cleaning tool on the market."
Before she traveled through time, everyone was following suit and burning money to develop shopping apps. The extent of that money burning was terrifying.
One of them was probably Suning.com. At first, two or three people could help each other to get fruit, milk, and other food and drinks.
For a while, her university dormitory and her studio relied on this to buy snacks—even a small mosquito bite is still a treat, and it's a fool not to take advantage of a bargain.
But later, it became too difficult to run, and the difficulty level kept increasing. So she and her friends didn't hesitate to uninstall it without any regrets.
Later, she heard that Suning was heavily in debt and that YiGou was also going out of business.
Ultimately, the three dominant platforms remain Taobao, JD.com, and Pinduoduo.
The current situation is similar to the pattern she followed before she transmigrated.
Wang Xiao laughed and said, "Originally, we were going to compete with them in burning money. These newly emerging small websites had fewer users and burned less money, while we had more users and burned more money. As the saying goes, 'Many ants can kill an elephant,' and the further we went, the less we could hold on. But now that the bubble has burst, they couldn't hold on and were washed away by the market. We won without a fight. Shouldn't we be happy about such a great thing?"
Zhang Tao didn't know how to describe his boss's optimism.
Although he knew that his boss had a favorite saying: "There are no bad things, only good things, and everything that happens is the best arrangement of God, and everything is for my benefit."
But boss, don't forget, they can't get funding and can't survive, and neither can we. Besides, we're a big company with huge expenses, and we have so many employees to pay salaries.
Wang Xiao remains optimistic: "We are different from them, my comrades. Please have confidence in yourselves. We have a solid core business model. We are not just about attracting attention without generating sales. We have a growing base of loyal customers and actual sales revenue. What was our revenue last year?"
Yang Tao reported the figure: "2.6 billion US dollars."
Frankly, she wasn't very satisfied with her performance, even though Amazon's revenue last year was only $1.9 billion. She believed that I Buy's sales should at least double, otherwise it wouldn't justify its market capitalization of hundreds of billions.
But Mr. Wang was already very satisfied: "Look, this revenue has proven that there is real demand for our services. It's not just empty talk or a vague concept."
However, Zhang Tao had to bluntly remind his boss: "But our expenses are even greater. We spent 3.2 billion US dollars last year."
What was this money used for?
They built a logistics center, a technology platform, and a database; oh, and they even created a payment tool.
They're all spendthrifts; their money is like flowing alcohol, burning away completely.
Wang Xiao laughed and said, "These are all necessary investments. They build I Buy's unparalleled economies of scale and user experience moat."
Zhang Tao was extremely troubled: "But we have an excess of logistics centers; we don't need that many at all."
Without hesitation, Mr. Wang said, "Then we'll find a way to make full use of it."
Zhang Tao was stunned: "How...how do I use it?"
To attract new users? Or to gain more loyal users?
Given the current market conditions, this cost is not low.
Mr. Wang was getting a little impatient.
Are you a journalist? Always asking the boss questions. If the boss solves all the problems, what's the point of having you, this senior executive, doing nothing?
"Think for yourself! Think it over carefully!"
The atmosphere in the meeting room instantly became tense, and Zhang Tao was so frightened that he didn't dare to breathe.
At the critical moment, Yang Tao saved his life by speaking up and saying, "I think I buy should expand its business."
Zhang Tao almost jumped up. "Sister, I'm begging you! Although spring is here and flowers are blooming outside, our industry is about to face a harsh winter."
At this point, shouldn't our priority be to survive? We should first find ways to cut expenses and tighten our belts to hold on.
Why are you adding any more sections now? Do you think you can just add sections whenever you want, and that service and maintenance are free?
Yang Tao smiled reassuringly at him before continuing to report to her boss: "What I'm thinking is that we should also integrate eBay's features."
If we're talking about websites that were least affected by the bursting of the dot-com bubble, eBay is probably the one.
Because eBay operates on a typical asset-light model, it doesn't sell goods itself, but only provides a platform and collects commissions. As a result, its expenses are very small, and it makes pure profit.
So even if a harsh winter comes and it can't raise funds, it can still survive; it doesn't need to burn through a lot of money.
So what if the stock price falls? To put it bluntly, the stock price is just an external valuation of the company. It doesn't mean that its business will actually go out of business just because the valuation has decreased.
Yang Tao said slowly and deliberately, "What I'm thinking is that if a financial crisis really comes, then everyone's lives will definitely be affected. Among them, the middle class, especially those working in the internet industry, will be the most affected."
Needless to say, with the internet economy collapsing, it's no wonder that people who make a living from this industry are struggling.
If the stock market continues to plummet, companies that can't withstand the pressure will inevitably go bankrupt, leading to massive unemployment. Even those who manage to keep their jobs will likely face pay cuts.
So without a doubt, they have to be careful with their money.
“eBay is a second-hand goods platform, and internet professionals are natural netizens. When they are short of money, they will naturally choose to buy cheap second-hand goods online to make a living.”
“We could also open a flea market on I buy, allowing users to share their secondhand goods, which embodies the spirit of internet sharing.”
Yang Tao laughed as she spoke, "Boss, you're right. This is actually a great opportunity for us. With the economy downturn, people will buy cheap goods. Our biggest advantage, besides our global logistics network, is that we have a large stock of inexpensive goods."
In times of economic growth, the middle class in developed countries may not be interested in these inexpensive goods.
But when people are worried about their bills, affordable alternatives can come into their view.
So the boss is right. All arrangements are God's best arrangements because there are always people making money at any time and in any place.
Wang Xiao nodded in satisfaction.
She knew that arranging for Yang Tao to go to I buy was the right choice.
Why was eBay able to turn a profit so early? Besides its unique business model, it also owes much to its CEO, Meg Whitman.
Whitman comes from the traditional consumer goods industry—Procter & Gamble. She is known for her steady approach and focus on profit and scalability. In the cash-burning world of e-commerce, her style is unique.
It is precisely this style of operation that increases eBay's ability to withstand risks.
Therefore, those who can succeed in e-commerce often come from traditional sectors.
This could be considered a form of differentiated competition.
Yang Tao is now playing that role. Having worked in the retail industry for many years, she knows all too well how to find customers and how to integrate customer resources.
After nodding, Boss Wang only said one sentence: "You can arrange this yourselves."
Although Zhang Tao doubted whether secondhand goods could make a name for themselves on Ibuy, and whether the middle class would actually buy cheap Chinese goods, he was quite pragmatic and nodded in agreement, given that he didn't have any good solutions: "The technical department will fully cooperate with General Manager Yang."
As the saying goes, there's no time like the present. Since the boss was there and could make the final decision, everyone simply started discussing the new section right there at the conference table.
If they want to compete with eBay for customers, they must fully leverage their advantages that eBay lacks. For example, they have their own logistics centers.
Mr. Wang has never paid too much attention to these trivial details.
Even the most junior employees need room to grow. Only when people give full play to their initiative and see results can they develop a love for their work.
She walked to the window and looked at the lively spring scenery outside.
The older children ran around, while the younger ones seemed to be learning to walk, their chubby little arms jiggling and wobbling as they stumbled forward, eventually burying their heads in what appeared to be their mother's arms.
Wang Xiao couldn't help but smile as he watched.
Even though she doesn't particularly like children, she thought it would be fun to play with such a little dumpling for a while.
Oh, what if it's not fun?
If it's not fun, then don't play it; just pass it on to someone else.
While everyone was discussing the layout of the exhibition hall, Zhou Liang felt he didn't have much room to contribute, so he simply picked up his teacup and went over to talk to the boss.
He looked out the window, trying to find where his boss's gaze was, but he couldn't find it, so he gave up and sighed bluntly, "I wonder how badly the stock market will perform this time."
Wang Xiao stopped looking at the little dumpling because it wasn't fun anymore. He cried, and his crying wasn't very pretty.
So Mr. Wang looked at the kites with whistles without hesitation, thinking that he would find one to play with later.
Hearing Zhou Liang sigh, she casually replied, "Go back to where you came from. We're only at this stage. Few will survive in the market. This is a war."
Zhou Liang was terrified, because the Nasdaq had risen from about 1,000 points in 1995 to more than 5,000 points this year. If it were to fall back to its original level, it would be a real avalanche.
Wang Xiao reminded him, "Be prepared, the situation will be worse than economists are predicting."
Everyone still holds onto their illusions, after all, the millennium has a kind of magic to it, and everyone feels that the world will enter a new era.
But things really change in the blink of an eye; the more eager those who entered the market were, the faster those who left will run away later.
Zhou Liang remained silent for a long time before finally asking, "How long do we have to endure this?"
Historically, financial crises have always been like this: whoever survives to the end is the winner.
Even I Buy's current expansion is just an add-on. Compared to the shrinking assets, the new business is negligible.
Only by weathering this storm can the market truly recover.
The most critical issue is that the impact of the 1998 financial crisis has not yet completely subsided.
Another wave of internet economic collapse, with its combined impact, could have consequences beyond imagination.
The longer a crisis lasts, the greater the damage.
Zhou Liang's voice wasn't actually very loud.
As luck would have it, the people at the conference table stopped to drink water at a point in their conversation, and then this question struck them like a thunderbolt, silencing the entire conference room.
Financial crises can be short or long, especially those occurring in the United States, which could potentially escalate into a global economic depression.
Is the nascent internet economy doomed to die like this? Or did it arrive too early, before the world had even reached that stage?
Wang Xiao turned her head and looked at them with a puzzled expression: "What are you all doing? Stop daydreaming. It won't be long before it recovers. You won't have a chance then."
Zhang Tao couldn't help but ask, "Really, it won't take more than a few years?"
He was very suspicious.
Even though he comes from a technical background and has only a superficial understanding of finance, he knows just how far this wave of internet economic boom will affect.
Therefore, once the hype dies down, what will be left behind is devastation.
Wang Xiao clenched his fist, rubbed his forehead, and looked very troubled: "Think carefully, where did the internet economy originate?"
There's no need to even think about this; it's the United States.
If it weren't for the United States, it wouldn't have such a great influence.
The United States is now the world's number one power, ranking first in the economy, military, and politics.
Wang Xiao spread his hands: "Then that settles it, doesn't it? Would the US allow the internet economy to be paralyzed? It's impossible for it to. This is the only way out; it has no other choice."
"From the 1980s to the present, and into the foreseeable future, American manufacturing has been continuously flowing out of the country. Finance and services have become the pillars of the economy. Manufacturing accounts for only 15.5% of GDP. The global division of labor dictates that the United States must focus on high-value segments."
"In this context, the new economy, represented by the internet, is being given high hopes. It is seen as the only new engine for creating high-paying jobs, maintaining global technological leadership, and driving overall productivity growth."
“How can this engine be stopped? It cannot be stopped. Because the sunk costs are too high and the political commitments are too heavy. The ‘information superhighway’ plan, which the US government has been pushing for ten years, has never been a simple technological blueprint; it is also a major political and economic commitment.”
"If the internet economy fails completely, it will not only mean that hundreds of billions of dollars of investment will go down the drain, but it also represents the failure of strategic judgment of a generation of politicians and elites, which is something the US government cannot afford."
"And as we all know, the United States is the current leader, the absolute world leader. If it wants to, it can definitely revive the internet economy and get everyone to cooperate with its actions."
"When an industry is elevated to the level of a national core strategy, and its fundamental value is real, even if it experiences a crazy speculative bubble, its technological dividends and economic benefits can still be realized with the support of the state and the secondary innovation of the market."
Mr. Wang sighed, "This is the true strength of a world power: its powerful strategic resilience and systemic resilience."
Who wouldn't envy such strength? Who wouldn't want to become such a powerful person?
Anyway, Boss Wang was filled with envy, jealousy, and hatred.
The people present looked at each other in bewilderment.
They considered that the boss's optimism was based on an analysis of market trends, such as the amplifying effect of infrastructure dividends and globalization, and the continuous increase in internet users.
Unexpectedly, the boss was actually eyeing the US government.
Is it really true that politicians need to understand economics to succeed, and businessmen need to focus on politics to reach the top?
Wang Xiao clapped his hands, reminding the group of internet executives: "Alright, so instead of worrying about the market rebound not coming back, you should worry about the short time frame. In just two or three years, before you have time to make your plans, the hot money will come back again. So, hurry up, everyone."
She thought for a moment, then added, "Oh, and don't forget to poach talent while you're at it. Especially since some companies are going under, it doesn't mean they don't have skilled people. If you find any, poach them quickly."
Those in the same industry are rivals.
Isn't doing business all about taking advantage of people's illness and trying to kill them?
If we don't take advantage of this economic crisis, when will we?
Once you miss this opportunity, you won't find another one.
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[Starry eyes] Good morning! [Cat emoji] Sometimes I think to myself, I'm so amazing that I was able to write such an awesome story about Boss Wang. That's probably why I haven't been able to finish it yet.
Note: The official GDP figure for Guangdong Province in 1999 was 845.946 billion yuan. Zhejiang's GDP was 544.392 billion yuan; Jiangsu's was 769.782 billion yuan, a 10.1% increase over the previous year. Therefore, 129 billion US dollars is indeed an astonishing figure.
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