Chapter 74: Resolving to Sell

At the gate of a small villa in Beverly Hills.

Wilson, the owner, opened the mailbox and took out a few letters. After reading them, he walked back inside. After entering the living room, he picked one out and began reading it carefully.

It was the latest Nasdaq analysis for the morning.

Three days ago, a friend introduced him to an investment manager from Merrill Lynch who came by for a visit. When they talked about Nasdaq and internet stocks, they hit it off.

To be precise, their views were quite similar; both believed Nasdaq had unlimited potential in the coming years.

Since then, the investment manager sent him the latest stock market details every day.

Seeing the rapid rise of several quality internet stocks, Wilson felt a pang of regret.

Initially, he had invested all his available liquid funds into Nasdaq stocks, but now he wished he had invested even more.

The phone rang, and Wilson answered. A somewhat familiar voice came through.

"Hello, Mr. Wilson. This is Scott. Did you receive the information I sent this morning?"

Wilson looked down at the papers, "Yes, I received it."

The service was indeed thorough.

The voice continued, "If you need anything, feel free to contact me."

Wilson nodded slightly, "I will."

He had his own investment advisor, but Scott's professional skills and Nasdaq analysis seemed superior.

The service level was also better.

After hanging up the phone, Wilson looked at the market analysis and updates on the star stocks. He felt he couldn't hesitate any longer.

Any more hesitation, and he'd miss the best opportunity.

In the afternoon, just as the stock market closed, investment manager Scott visited again.

Wilson knew Scott was interested in his wealth and investment ability, but such investments were mutually beneficial.

Moreover, Scott's Nasdaq analysis was indeed professional.

Like their first meeting, they had a pleasant conversation until evening.

As Scott was leaving, he said, "Mr. Wilson, have you heard of Julian Robertson?"

Wilson wasn't new to the stock market. He had heard of the financial investment master, nodding, "The founder and manager of Tiger Fund."

Scott said solemnly, "I just got the news. Last week, Julian Robertson sold all of Tiger Fund's traditional industrial stocks and bought a large number of internet company stocks."

"How is that possible?" Wilson was shocked.

Julian Robertson had long criticized Nasdaq and internet stocks, even publicly condemning them on television. His Tiger Fund had heavily invested in traditional industrial stocks.

Scott added, "The news has just spread. You can check it online."

Remembering that Michael had only asked him to influence Wilson to strengthen his confidence in Nasdaq investments subtly, he said no more and left.

After seeing Scott off, Wilson checked online and found Scott's words to be true. Even the most famous critic of internet stocks has embraced them.

With the market looking so promising, any potential issues would likely take years to surface, by which time there would surely be others to take over.

Wilson picked up the phone and made two calls.

"Parker, let's meet tonight."

"Neil, I've arranged to meet Parker. Let's meet at the Old Café in an hour."

In less than an hour, the three of them gathered at an old-fashioned café.

"Have you heard?" Wilson got straight to the point, "Julian Robertson has abandoned traditional industrial stocks and embraced internet stocks."

Neil, who was younger than Wilson, asked, "You mean the head of Tiger Fund, that investment giant?"

"Yes." Parker took a sip of coffee, "He used to be a staunch opponent of internet stocks. Why the sudden change?"

Wilson snorted, "Why else? Because internet stocks are profitable! And the profits are huge."

The other two thought for a moment. There was no other plausible explanation.

Parker sighed, "We can't wait any longer."

Wilson nodded emphatically, "The stocks we bought have already increased a lot. If we had been more decisive last year, our profits would be much higher."

Neil frowned, "Are we really going to do this?"

Wilson continued, "We've owned Embassy Pictures since the late '80s. In these ten years, how much profit have we made? Not as much as we've earned from internet stocks in just one year! I've had enough of traditional industry; the money comes too slowly."

Parker agreed, "Financial securities are risky, but with Nasdaq's current trend, it should be safe for a few more years. By then, we'll have more funds to reinvest in industry."

Neil closed his eyes. Over the past year, he had heard and seen countless examples of people earning more from internet stocks in one year than from ten years in a traditional industry.

Wilson added, "This kind of opportunity doesn't come around often."

He emphasized, "Our most valuable asset is our shares in Embassy Pictures, but the profits are too low. According to the bank, the loan amount would be too small if we used them as collateral. The company's biggest value is still in Hollywood, and right now, someone is willing to take it over."

"You mean Seashore Entertainment?" Parker asked.

Wilson nodded, "Their last film was a huge success. They want to get into distribution."

Neil made his decision, "Let's continue talking with Seashore Entertainment. If they offer a good price..."

Wilson was confident, "There aren't many companies like ours with a complete distribution system."

Embassy Pictures' distribution system was solid. It bought low-cost films overseas and released them in North America, along with distributing VHS and DVDs.

This was Wilson's source of confidence.

That same evening, Michael met with Garcia, the representative of Embassy Pictures' management.

"The company's fate isn't decided by the management, Mr. Davenport," Garcia, a plain-looking middle-aged Latino, said. "You've met the major shareholders. You know they hold ninety percent of the shares."

Michael smiled, "I hope the management won't oppose Seashore Entertainment's acquisition."

Embassy Pictures' management held ten percent of the shares. If they collectively opposed Seashore Entertainment's acquisition, it would be a significant problem.

Garcia remained silent.

"Embassy Pictures currently buys films cheaply overseas and distributes them in North America," Michael continued. "Is that correct?"

Garcia nodded, "It's a way to minimize risk."

Michael agreed, "Many foreign film companies and directors want to enter the world's largest film market. They often sell their North American rights at rock-bottom prices. North American distributors can buy these films cheaply and release them in theatres, where even low box office returns can be profitable due to the VHS and DVD markets."

Garcia didn't deny it, "You have a detailed understanding, Mr. Davenport."

Michael then asked, "How much profit does this model bring? There are no opportunities to distribute mid-to-large-budget films. Garcia, you've been in Hollywood for over fifteen years and in film distribution for five. Haven't you ever wanted to distribute films with budgets over ten million dollars? Don't you want to create a box office miracle?"

"Anyone in the distribution business has thought about it, myself included," Garcia replied calmly. "But wanting and doing are different."

Michael said, "Seashore Entertainment has ample funding. We're currently making two films with a combined budget of $40 million, one of which is directed by James Wan, who created the box office hit 'The Purge.' These films will enter the distribution phase within a year."

"In the future, Seashore Entertainment will make even larger investments, possibly even producing top-tier films with budgets over $100 million."

Garcia seemed interested but remained silent.

Michael knew that future promises and dreams were not enough. The management of Embassy Pictures would have concerns.