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Chapter 139: It's Not Easy Being an Adult
"Mr. Lynch, I believe there are some issues with your statement."
Just as Lynch finished a brief market valuation for his Interstellar Trading Company, stunning the others with his skilled techniques, someone raised a different opinion.
This was a common occurrence; in business, negotiation and exchange were the norm. There was no rule dictating that others couldn't engage in a back-and-forth discussion on pricing.
Lynch naturally wouldn't refuse to engage in a negotiation; it definitely wasn't the way to conduct business. He pulled out a pack of cigarettes, nodded, indicating for the other party to continue speaking.
The gentleman with the blue tie presented a different viewpoint, "I believe valuing a company shouldn't rely solely on its profits. Moreover, Interstellar Trading Company can't reinvest all its profits to grow itself. So, I think the valuation you proposed might not be accurate."
Actually, the gentleman's perspective was akin to earning 200 bucks a month and saving 2,400 bucks a year. It was an idealized way of valuation, but it was unlikely to occur in reality.
Firstly, there was the fluctuation in earnings. Earnings would never be maintained within a narrow range; they would fluctuate, sometimes even dramatically. This could lead to significant disparities between actual and idealized outcomes.
Moreover, business operations had only been launched in the Sabin region so far. The earnings from other areas were uncertain. Overall, it wasn't an easy task.
Setting up a roadside stall might cost only 500 bucks, but if it generated 300-500 bucks in profit per month, could its short-term market value be worth tens of thousands?
Without introducing entry requirements and thresholds, that was certainly impossible. So, Lynch's statement did raise some suspicion of concept manipulation.
But, as mentioned earlier, business fascinated many because most businessmen were not only lovers of numbers but also enjoyed the thrill of outsmarting others.
At that moment, Lynch's head dipped as he grasped a matchbox. Swiftly selecting a match, he struck it against the box, creating a soft 'tch' accompanying the flare of smoke. Two deliberate drags later, he flicked the match away, depositing it into the ashtray.
With a smile, he lifted his head to meet the gaze of the man in the blue tie. "Why not?" He said, after taking another drag.
Without waiting for the other's opinion, Lynch continued, "I will invest all the money into the company's development and operation, making it increasingly comprehensive and expansive."
He leaned back on the sofa, his left hand pressed against the sofa's backrest while his right hand held a cigarette, resting on the raised knee. His demeanor exuded relaxation, yet was imbued with a confident aura.
"When our channels and coverage meet the requirements for expansion, I will transition it to become the largest distributor in the state, at the very least."
"By then, people will have a new choice alongside supermarkets and malls, and this choice will arguably be the best."
"Gentlemen, this isn't just a business of second-hand goods trading. Eventually, it could infiltrate every aspect of people's lives."
"The appliances they use, the furniture they have, even their homes, work, and daily necessities could come from our company..."
"Gentlemen, to be honest, when I estimated 50 million bucks, it pained me. I even considered increasing the valuation several times, perhaps to deter you."
His expression was serious, sincere. There was a hint of helplessness in his voice, "But I understand; we're in this together, at least for now. I also understand the rules of the capital game. Mutual assistance is the only reason we can stand taller than others."
"If you find this price too high, then I can only express regret with joy. However, if you're willing to join this plan, it might give me some headaches."
The few exchanged glances. They found Lynch's words somewhat exaggerated, yet not entirely unachievable. It was really a headache-inducing situation. If only it were simply true or false, things wouldn't be so complicated.
Lynch went on to discuss issues such as leasing second-hand goods, a more terrifying method to satisfy people's impulsive material needs in the short term.
His discussion, coupled with his depiction of the future, suddenly ignited the interest of those sitting opposite him.
The more Lynch described his ideal company, the more promising it seemed to them.
Lynch's description was so detailed that it covered many aspects they hadn't considered, leading them to believe that Lynch must have a more detailed comprehensive plan and was implementing it accordingly.
Now he had taken the most critical step. As long as he didn't make mistakes, the chances of competing with him were minimal. The reason was simple: Lynch's businesses were part of Mayor Langdon’s "People's Welfare Policy." His company could be seen as a tangible manifestation of the policy's effectiveness and value to society.
The better his company performed, the more it proved Mayor Langdon's policies were valuable and suitable for the current social environment. If his company failed, it would suggest the policy wasn't as appropriate.
However, such failure would only be Lynch's failure. If Lynch's company went bankrupt or failed to expand according to his plan due to someone else's interference, it wouldn't just offend Lynch but also Mayor Langdon and all the capitalists and politicians closely related to him.
So even if they imitated Lynch's initiation of this second-hand goods auction, the scale would not be likely to be significant, and they would still encounter various troubles. This would be much more troublesome than directly investing in Lynch's business.
Businessmen liked money, not trouble.
"But 50 million valuation is too high. EverBright Group’s market value is just over 100 million..." a person with a green tie interjected.
EverBright Group’s market value was approximately 170 million, making it one of the top companies locally. Many might feel puzzled; 170 million was indeed an astounding figure, but it didn't seem as much as imagined.
This was also a form of changing the concept. When society needed people to understand the power of a conglomerate, they simply needed to hide the negative assets. For instance, if certain politicians needed to demonstrate notable achievements or substantial economic growth in their local area during their term, the emergence of successful companies served as the ideal means to do so.
One after another, companies with market values ranging from tens of millions to billions emerged, yet people were unaware that the majority of these enterprises were actually operating under a "negative asset management" model.
When companies required funds, banks would lend them money. However, to meet specific social, political, or even investor expectations in the stock market, these loans from banks would, in some manner, integrate into the company's assets or even augment its profits.
When reporting, they would present what the public needed to see, which was what they hoped for, hiding the source of the money and the debts the company carried.
However, when local policymakers or societal needs aimed to diminish the influence of a particular enterprise, they would offset positive and negative assets in their assessment of market value. Subsequently, they would utilize a sum or difference as the company's final market value.
A company with assets worth ten billion might be burdened with nine billion in debt. If a company with a market value of ten billion went bankrupt, it would feel like doomsday. But if a company with a market value of one billion went bankrupt, people wouldn't feel as devastated; they might even feel a peculiar sense of satisfaction, thinking, "I thought this company was extraordinary."
Similarly, "Our company, newly established yesterday, has a market value of ten billion already," would sound much better than, "Our company, just established, already owes ten billion in debt." And it would also be more effective.
Lynch maintained his demeanor throughout. Now, he slightly smirked, "Interstellar Trading Company has no bad assets and won't have any. Our profits are enough to fully support the company's development needs."
"Gentlemen, I've already begun establishing branch offices in various cities. By the end of this year at the latest, all branches will be operational."
"By then, the valuation you'll be facing won't be 50 million but 500 million, or even more!"
It was already August, and strictly speaking, there were only three months left until the end of the year. Lynch cleverly used environmental and temporal factors to instill a sense of urgency in these people.
In three months, the estimated valuation could potentially increase tenfold—whether or not it would actually increase was inconsequential; what mattered was the statement itself.
The goal of investors wasn't necessarily to grow and thrive alongside a company; they simply wanted money or other benefits that could accrue to them.
Investing in Lynch's business now versus later was entirely different. They also believed that by the end of the year, Lynch, this young man, would have the audacity to boldly declare a valuation of five billion in front of investors.
"We need to discuss this..."
A person with a pink tie stated his position, and others nodded in agreement. They needed to figure out how to pressure Lynch using their external advantages or offsetting some of the monetary value.
For example, the policy resources they held or methods like cross-shareholding. In any case, they needed to minimize cash outflow, especially given the current situation where everyone's pockets weren't exactly overflowing with money.
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