How much is a business worth? It's a very specialized, very complex question.

Experienced investment banks like Goldman Sachs often have their own set of evaluation tools. These assessment tools are often made up of a variety of methods, and there is no such thing as one method being more accurate than the other.

In practice, investment banks use a variety of valuation methods and then take an approximate range. The average person may think that it is intuitively reasonable for all valuation methods to lead to a common outcome, but the reality is that investment banks will give several independent and different valuation results. That's where the core work comes in.

Investment banks will consider the valuations obtained by different methods, and then qualitatively and subjectively give a relatively reasonable valuation range. In each valuation method, non-quantitative factors are taken into account and the valuation is adjusted accordingly.

This is also the reason why the results given by different investment banks sometimes vary greatly.

"Mr. Jiang, the current valuation algorithm is more complicated, because for this listing, we have integrated the shares of Meituan USA, Island and Celestial Empire into the newly registered Meituan Technology Co., Ltd."

In the early days of Meituan's development, there were relatively many shareholders of Tianchao, while overseas companies were basically wholly owned by Jianghui, so when integrating into a company, it was necessary to calculate the valuation of each company and calculate the shares of each shareholder in the merged company.

Meituan's current largest user is Celestial, but the U.S. branch is more popular with investors because it is mainly engaged in the North American market, while the island country branch is oriented to the entire East Asian market, so in terms of valuation, the U.S. branch and the island country branch with fewer users will not be lower than the Celestial Empire.

"Overall, the final valuation given by Goldman Sachs is $4.5~5.5 billion, combined with the current number of issuances, the stock price is between $22~$28, depending on the performance of the roadshow," Tang said.

"It's okay, so that we can raise about $1 billion, which is enough for Meituan to further develop into a comprehensive platform."

Jiang Hui hopes that Meituan can become a diversified enterprise with group buying as the main focus, supplemented by shopping.

For example, the functions of shopping websites such as Later Life and Tiantian Orchard, Jiang Hui feels that they can be integrated into Meituan.com.

Meituan itself is mainly based on food group buying, and if it can sell seafood, fruits and other items online at the same time, there must be a market. Of course, the premise is that the express delivery must keep up, which is also one of the reasons why Jiang Hui encourages Jingxi to build its own logistics.

Sooner or later, Korn Ferry Investment will become the majority shareholder of BJ, and at that time, Meituan and other companies can also cooperate with BJC Logistics to achieve a win-win effect.

"To be honest, Mr. Jiang, more than 100 million US dollars, I really haven't figured out how to spend it."

"It's not easy to spend money? first make Meituan's comment area a community and learn from the Dianping model, develop its own shopping platform and integrate online shopping functions into Meituan, develop a cooking module where everyone can share the food processing process, and at the same time have a few more ...... for pregnant women, children, and other diet modules," Jiang Hui gave a bunch of examples.

"And that's not even counting the investment in fixed assets, but if you have plenty of money, you can buy a piece of land to build a Meituan headquarters building, and then buy land and build warehouses across the country, and you can spend another billion dollars," Jiang said.

"It seems that only those who can spend money will make money", Tang Wenwen was also ashamed when he saw that the distribution of more than one billion US dollars was planned by Jiang Hui in a blink of an eye.

In fact, in Jiang Hui's view, it has nothing to do with being able to spend money and making money, and the reason why it leaves this impression on many people is because they can spend money and can't make money: they starve to death and can't make a sound. Spending money and making money: being seen and making a sound. If you don't spend money, you will make money: people are silent and make a fortune, who knows?

Won't spend money, won't make money: no one knows and no one sees the land poor and died, and still can't make a sound.

……

Meituan and the school started preparations for listing at about the same time, but the scale of the school is much larger than that of Meituan, so the progress is a little slower, and the registration materials are still being prepared. At this rate, it won't be available until December.

"Old Tang, you have to hurry up the preparation for the listing of the school intranet, and strive to complete the listing within this year."

After listing, there is a lock-up period for major shareholders to sell shares, and they can only be sold after the lock-up period expires. In order to maximize profits, Jiang Hui hopes to cash out some of his shares before the subprime mortgage crisis comes, and then consider repurchasing at a discount.

The lock-up period refers to the period during which non-tradable shareholders of a listed company are not allowed to sell their shares in the secondary market.

After the expiration of the lock-up period, the number of outstanding shares in the market will increase. If the restricted shareholders sell the company's shares in large quantities after expiration, the stock price may fall, especially if the company's major shareholders and senior management sell a large number of shares, which is easy to be understood by the market as the company's insiders are not optimistic about the prospects of the company's shares. Therefore, exchanges in each region will set a lock-up period, which will last from six months to one year.

"I understand, the main reason is that it took us a lot of time to calculate the valuation of several branches in the school intranet in the early stage, and the speed should be much faster in the future."

Similar to Meituan, the intranet is also a reorganization of several branches with different share distribution into a single intranet technology co., LTD.

Due to the large size of the island country branch of the intranet, it really takes some time to value the offices in multiple countries and regions.

When the school intranet was financed at the beginning of the year, several branches added up to a valuation of 50 or 60 billion yuan, and now it has risen by more than 50 percent, and it is very promising to exceed 100 billion yuan after listing.

"The equity incentives promised before should be exercised in a timely manner to avoid unnecessary losses to employees and turmoil in the company's operations."

Jiang Hui gave a few employees in the early days of the school intranet, although after many capital injections and financing, these shares have been left about 0.1%, but the value is not low at all.

Employees who enter the company later are not so lucky, and the intranet only has option awards for managers above the minister level and employees above the G5 level.

What's the point of an option award? An analogy might be easier to understand.

In January 2005, the company gave 2,000 options, with an exercise date of January 2007 and an exercise price of 5 yuan. What does that mean?

In other words, in January 2007, the company's shares could be purchased at a price of 5 yuan per share.

If at that time, the company's stock price is 10 yuan, then choose to exercise the right to buy at a price of 5 yuan per share, which is equivalent to spending 2000 * 5 = 10000 US dollars to buy a stock with a market value of 10 * 2000 = 20000 US dollars.

However, if the company's share price was $2 in January 2007. Well, it would be a fool to exercise power again then. At this time, you can only temporarily give up the exercise of the right and wait until the company rises to more than 5 yuan before exercising.

I believe you also understand the benefits of issuing options to the company, and you can only get rich when the company gets rich, so this way can be a good way to encourage employees: hurry up and work~

(End of chapter)