Du Yuesheng's autobiography, there is a word, the impression is very deep:
The icing on the cake let others do, I only do things timely assistance.
This sentence is the Shanghai mob boss's philosophy of life, and for the investment, it is reasonable also, investment in the most difficult time of an enterprise.
NetEase shares recently hit record highs, the market value of nearly $40 billion(see the "NetEase titanium media hot market value approaching $40 billion, to re-examine Ding Lei"), all the time, everyone is talking about how the game is fine, its strict selection is how good, and how the koala is different.
I do not know who still remember 16 years ago, NetEase, what is being spurned, who is timely assistance to the NetEase?
The listed stock market crash
June 29, 2000, NetEase listed on nasdaq.
When a listed NetEase, it just hit the NASDAQ bubble burst, the NASDAQ index from the highest point in 2000, 5048 points all the way down, the lowest fell to 1114, down by 78%.
NASDAQ index trend, red circle corresponds to the time for the listing of NetEase
NetEase's share price fell 15.5 from the time of listing, the lowest fell to 0.48, a decrease of up to $97%, its market capitalization fell to $20 million from the listing of less than $470 million.
The trend of NetEase 2000-2002 years before rehabilitation
At that time the market value of less than 20 million of the NetEase out of what?
Fraud and query
NetEase in the second quarter of 2001, was suspected of accounting fraud.
As a result, NetEase had to recalculate its 2000 revenue, which led to a 52% reduction in NetEase's real income in 2000 than previously reported, only $4 million (previously $8 million 300 thousand).
Because of this, NetEase shares in September 4, 2001 was announced by the Nasdaq Stock Exchange to suspend trading, when NetEase's share price of $0.64.
For a time, the media reported that NetEase have spurned, says it is very difficult to explain why half of the income suddenly gone, and that it has been the risk of delisting, at the same time, industry experts say, is to suspend trading is just the beginning, there will be more behind the scandal.
At the time, Ding Lei was only 30 years old, for which he fired several senior executives, and began a month long appeal to U.S. regulators.
Ding Lei later recalled:
At the beginning of 2001, the most urgent desire was to sell the NetEase, but no one dared to buy it. By September, you can not sell to sell. Life is a process of accumulation, you will always fall, even if you fall, you must know how to grasp a handful of sand in the hand.
April 2002, Duan Yongping and his wife at the time of the public market to buy 1 million 520 thousand shares of NetEase, accounting for the total share capital of NetEase.
From the 13G file
Later, Duan Yongping continued to overweight NetEase shares to 2 million 50 thousand shares, accounting for NetEase, 6.8%.
Buffett and Duan Yongping
At the same time, Duan Yongping found NetEase valuation is very cost-effective. But for NetEase face delisting risk, Duan Yongping said later:
Very simple, pay a little money, please a few lawyers according to legal provisions and cases to calculate case had been the case if the NetEase to pay, to be delisted, the probability is much to lose much money.
If we look back now, then the valuation of NetEase is indeed very cheap, the market value of 20 million U.S. dollars of the company at the end of 2001, cash is about $60 million, and the net assets of $67 million, only $14 million for debt (including bank loans of $10 million).
At the same time, the China Mobile and Chinese Unicom SMS and other value-added services, with the popularity of mobile phone in Chinese, is the rapid development, the income increasing from 2 million 400 thousand in 2000 to 14 million 100 thousand RMB in 2001 570%.
Based on the deep understanding of this enterprise and NetEase was so cheap valuation under Duan Yongping, he was the most savings invested all of the NetEase, and the investment, he was also a hundredfold return. Vision and courage that really make people admire!
At the same time, in the view of titanium media author Sanqian 22, Duan Yongping also made timely assistance, NetEase.
NetEase's revenue grew from 28 million yuan in 2001 to $38 billion 100 million in 2015, an increase of 1360 times, its 2016 net profit of up to $11 billion 600 million, its market value of the market in 2000 of 72 times:
The outbreak of NetEase's revenue is derived from NetEase's game: in 2002, NetEase's game revenue was only 35 million yuan (before the game revenue in 2002 was $0), by the year 2016 has reached $27 billion 900 million.
Titanium media author Sanqian 22 believe that games after Ding Lei's marketing and understanding of the product, a lot is affected by Duan Yongping, but also because of Duan Yongping's NetEase have timely assistance, today's brilliant. Duan Yongping and Ding Lei are therefore soon, two people together later for his alma mater, Zhejiang University donations.
Finally, the author want to say 22 Sanqian titanium media, such as NetEase investment opportunities may really be a NASDAQ bubble brought over to underestimate the value of the gaming industry, Chinese with Chinese economy appeared explosive growth and its excellent NetEase.
It is the superposition of these factors (the so-called Lollapalooza effect, Munger is the result of the NetEase) the super big bull stock from the lowest point up to 2250 times, that is 50 thousand dollars in 2000 will become $100 million.