Chapter 127: The Deal

After a few minutes of silence, Xu Yong finally looked at Li Dong and asked, "Since you're not optimistic about Baidu, why do you insist on buying the shares I'm holding?"

Li Dong shook his head and replied, "It's not that I'm not optimistic; it's that I'm not optimistic right now. The future holds great promise. I'm planning to hold onto these shares for the long term. I'm not in a rush to cash out. In another ten years or so, the internet is sure to have its moment. I'm betting on the future of the internet."

Li Dong inwardly scoffed at his own words, knowing they were nonsense.

However, Xu Yong took them seriously, as Li Dong's reasoning aligned with his own thoughts. Xu Yong, too, believed in the future of the internet, though he wasn't as confident about Baidu's present state.

If there wasn't an urgent need for cash, holding onto Baidu's stock would indeed be worthwhile. But Xu Yong needed money now.

Rubbing his temples, Xu Yong felt a bit irritable, and more importantly, he realized that he was beginning to waver. From initially refusing Li Dong's offer to now engaging in a prolonged conversation, this was a sign of his indecision.

Should he sell or not?

After much deliberation, Xu Yong finally said in a weary tone, "Let me think it over. Also, I have an agreement with the board: without the board's and most shareholders' written consent, the company's founders are not allowed to transfer shares."

This agreement was initially set up to prevent Xu Yong from selling his shares to competitors, which could lead to Baidu being acquired. However, times had changed. Xu Yong no longer held a majority of the shares, and the board likely wouldn't object if he decided to sell, as they hadn't objected when he sold some shares previously.

Li Dong and Gu Honglou knew that this was Xu Yong's way of politely dismissing them, but they weren't willing to leave just yet. Having finally persuaded Xu Yong to consider selling, they couldn't afford to wait any longer, as a delay might lead Xu Yong to reconsider.

After Xu Yong finished speaking, Gu Honglou quickly interjected, "Leave it to me. I'll handle the Baidu board."

He had dealt with most of Baidu's executives before. If Xu Yong had still been in his position, Gu wouldn't have been so confident, but now he was certain he could manage it.

Moreover, Li Dong's money wasn't easy to earn. If it were possible to secure such a large sum with just a few words, it would be far too simple. The subsequent procedures and potential issues all required Gu Honglou to handle them. Only when the money and shares had exchanged hands would the deal be truly complete.

Xu Yong understood their intentions but remained firm, saying, "I'll think it over and get back to you."

Li Dong was somewhat reluctant but knew he couldn't push too hard. "Alright, when you've made up your mind, give me a call. I can't stay in Beijing for too long; there are many things at my company that need attention."

…

After leaving the building, Li Dong asked Gu Honglou, "Will Xu Yong sell?"

Gu Honglou smiled wryly. Who could say for sure? But everything that could be done had been done, and continuing to discuss it further wouldn't help; it was up to Xu Yong now.

Even so, Gu Honglou reassured Li Dong, "Don't worry, Mr. Li. He will definitely agree."

Li Dong nodded, though inwardly, he gave himself a deadline. If Xu Yong hadn't responded by June 5th, he would consider abandoning the pursuit.

…

Xu Yong didn't make Li Dong wait until the 5th. On the 3rd, he called Li Dong, saying he wanted to talk.

After hanging up the phone, Li Dong smoked several cigarettes in a row to calm his nerves. The deal was happening!

What remained was just the issue of the price. However, Li Dong didn't see that as a problem; as long as the price didn't exceed the initial offering price, he could accept it.

When Li Dong and Gu Honglou met Xu Yong again, Xu Yong appeared more worn out than before.

Li Dong and the others assumed that Xu Yong's fatigue was due to the long consideration over the past few days. In reality, they had no idea how much more Xu Yong had gone through during that time.

He had contacted several banks and venture capital firms, but none were optimistic, or they had set very harsh conditions.

All in all, Xu Yong had taken quite a beating over the past few days. Otherwise, he wouldn't have made a decision so quickly based on the previous discussion.

Upon meeting Li Dong, Xu Yong didn't waste time and asked directly, "How many shares do you want, Mr. Li?"

"How many do you have…" Actually, Li Dong wanted to say he'd take as many as Xu Yong was willing to sell.

However, Xu Yong's next words shocked him, "I'm not selling all of them—at most, fifty thousand shares."

Li Dong swallowed hard. Fifty thousand shares?

And that's not even all of them? How many shares does Xu Yong still have?

It was said that most of his shares had been repurchased, and he had sold a portion. How could he still have so many?

In reality, Li Dong hadn't realized Xu Yong's standing. Xu Yong was one of Baidu's two co-founders, second only to Li Yanhong. No one else in the company could compare to him.

Fifty thousand shares represented less than 2% of the company, while Xu Yong still held over 7% of the equity.

The reason Xu Yong was selling fifty thousand shares was that the money would be sufficient to keep his company running. He also still believed in Baidu's potential and planned to hold onto the remaining shares for the long term.

Seeing Li Dong hesitate, Xu Yong frowned and asked, "Mr. Li, is that too much?"

Li Dong quickly shook his head. How could it be too much? The more, the better.

If possible, he would have loved to buy all the shares Xu Yong held.

Of course, that was impossible. Even if Xu Yong agreed, the Baidu board might not. Not to mention, Li Dong didn't have that much money.

Last year, Google invested $5 million to acquire just over 2% of Baidu's shares.

This year, with Baidu's IPO approaching, the price would certainly rise. Besides, Google's investment wasn't just about money—it significantly boosted Baidu's reputation, so it was quite a bargain.

Li Dong knew that his costs would be much higher than Google's.

At this rate, it was uncertain whether $5 million would be enough to buy those fifty thousand shares.

Sure enough, Xu Yong's next offer made Li Dong jump.

"$30 per share!"

Li Dong nearly cursed out loud. Was he crazy for money? At $30 per share, that would be nearly 250 yuan each!

Last year, when Google bought in, the shares were around 60 yuan each. Now, he's asking for four times that, and Baidu hasn't even gone public yet!

Of course, he was setting a high price to leave room for negotiation. Li Dong wasn't polite either and countered, "How about $10 per share?"

"Is that what you call sincerity, Mr. Li?" Xu Yong responded, clearly displeased.

"But Mr. Xu, you can't just name any price. At $30 per share, do you really think Baidu is worth over $10 billion now?"

"Maybe it's not worth that now, but once it goes public, I believe it will be!"

Li Dong rolled his eyes. Of course, he knew it would be worth that much, and even knew that at its peak, Baidu's market value would be close to $100 billion.

But that's in the future; Baidu is nowhere near that value now.

Seeing Li Dong's expression, Xu Yong continued, "During the third round of funding last year, the share price was already $12. Mr. Li, what do you think it's worth now?"

"I remember that was just a quote. Google spent $5 million to acquire over 700,000 shares."

"Mr. Li, do you think that's comparable?" Xu Yong retorted bluntly, implying the comparison was unfair—especially between Li Dong and Google.

Li Dong cursed inwardly, *Are you looking down on me? Fine, I'll let Gu Honglou handle this!*

Glancing at Gu Honglou, Li Dong signaled him to take over.

Having been prepared, Gu Honglou jumped into the negotiation, engaging in a fierce back-and-forth with Xu Yong.

The three of them negotiated for more than an hour before Xu Yong firmly set the price at $18 per share.

If it went any lower, he wouldn't sell. He even implied that he could sell to someone else for the same price. For him, $18 per share was the absolute minimum.

Li Dong realized that he couldn't push the price down any further. To be honest, he was quite satisfied with the $18 price.

Baidu's IPO price was $27 per share, and it opened at $66. If Li Dong could buy in at $18, it would be a huge win, not to mention the potential for the stock to rise even higher.

However, buying all fifty thousand shares would cost more than $900,000. That was over 7 million yuan, and Li Dong still had a shortfall of more than 2 million yuan.

Money aside, Li Dong was determined to buy all fifty thousand shares.

In the end, Li Dong agreed to Xu Yong's price of $18 per share, and they set a date to sign the contract three days later.

Today was just the initial negotiation. With such a large transaction—worth millions—neither Li Dong nor Xu Yong would feel secure without formalities.

Next, they would need to bring in lawyers, and if necessary, Li Dong was also prepared to involve a notary to formalize the agreement.

After all, this involved tens of millions of yuan. As the amount could potentially grow into billions in the future, Li Dong needed to be extra cautious.

Of course, the most crucial task now was to secure the funds. Li Dong still needed to come up with over 2 million yuan.