Investments and Money

Chapter 125

It was September 16th, just five days after the attack that had shaken the entire world. The atmosphere everywhere was still heavy. And yet, life kept moving.

We were having a secret meeting at Pepper's house—me, Pepper, Anthony, and Harvey Spencer.

I looked at Anthony and said, "Anthony, you can start with our financial breakdown of JD Company."

He nodded and started to speak. "We have a total of 720 million in own cash and investments, composed of 300 million in cash and 420 million in stocks.

These 720 million already account for the profits from the movies Paranormal Activity, My Big Fat Greek Wedding, and part of Brokeback Mountain. The films contributed 320 million, while the other 400 million came from the initial cash and the insane profitability generated by it and the movies once the money started coming in."

Yeah, it is like printing money. We profited a lot from the movies, and we reinvested that profit into stocks, generating even more money.

Anthony continued, " This doesn't include the money from our short position in Enron. We currently hold 20 million Enron shares short, with an average price of 70 dollars, 2,5% of Enron's total shares. At current prices (32.76), closing the position would cost us around 660 million dollars—meaning we're sitting on a profit of 740 million dollars before taxes."

We used leverage at the start, so that explains the amazing profit.

"Why do we even make movies..." Pepper murmured, having a little existential crisis

"Keep increasing the short position, Anthony. We're not done yet," I said

Anthony added, "That's not even counting what's still coming from Brokeback Mountain, plus Lost in Translation just launched, and we still have Annabelle and The Conjuring lined up. And 1.46 billion is just own cash, investments and profit (short position). If you count all the assets, there are also properties, film materials, intangible assets, and more "

I grinned. "The United States Mint would be jealous of us."

Pepper completed, "We also have our music division through the subsidiary—Marshmello being our biggest asset there."

I leaned forward. "Let's get to what matters. Anthony, how much do we have available to invest?"

He replied, "For now, without closing the short position or selling our stocks, we have 1.7 billion in cash available. But we need around 660 million dollars to close the short position."

(300 own cash + 1400 short position, 1700 total cash)

I nodded. "The stock market has been closed for a week. Even with the FED's cash injection, chances are we'll see a bloodbath in the coming days.

We'll focus on three key investments. First and most important: Amazon. Their market cap is already at 3.1 billion, and it'll probably slide further. Anthony, prepare to buy at the end of the month. Our target is 30% of the company, with an average market cap of 2.5 billion—meaning a total investment of 750 million dollars."

I continued, "Second on the list is the Chinese company NetEase. It's likely to be delisted from NASDAQ due to allegations that some of its executives were involved in fraudulent earnings disclosures. Right now, they're worth practically nothing. I'd consider a takeover bid if they weren't a Chinese company. Try to acquire 40%—somewhere between 30 to 40 million should be enough."

"And finally, I want a takeover bid for Hansen's Natural. They're not worth much—their market cap is 40 million right now. Try to make a deal before we have to go hostile."

I rationalized, "Hansen's Natural is a manufacturer of sodas and juices, but what really interests me is their energy drink division. It's the perfect match with Marshmello. We could launch an energy drink brand at Tomorrowland and break into that market."

Hansen was the former name of Monster Beverage Corporation. They haven't even launched Monster yet. I can use that. If they don't sell to us... better register the name now.

I could finally take the first step toward one of my biggest goals: owning 30% of Amazon. The year 2002 is going to be brutal for the stock market—S&P 500 tumbling, countless companies losing their value. That's when Apple's market cap will sit at just 4.5 billion, and Nvidia at 1.4 billion.

Good time to strike. I'll take a solid bite out of both.

Anthony leaned forward. "I have a suggestion. We don't want everyone knowing that JD Company owns these stakes. And from what you said, Jake, it sounds like Amazon is going to be a long-term position. We can structure a fund, 100% owned by JD Company—maybe even place it in a tax haven."

Pepper looked up, "So we would only need to disclose that, for example, the Jacob Fund acquired 30% of the shares, without linking it to JD by name?"

Harvey replied, "It can be done legally."

"Let's do it," I said. "But really, we're using my name again?" I asked, looking at Pepper.

"Yes, let's keep the standard," she replied, unfazed.

Aye, I thought. Now we have JD Company, Harper Fund, and Jacob Fund. There is still David (I have the D. in my middle name, maybe that is why I'm the protagonist)

We kept talking for a little while longer, reviewing timelines, documents, and potential partners. Eventually, Anthony and Harvey stood up, grabbing their folders.

"I'll get the paperwork in motion," Anthony said.

"Keep me in the loop," Harvey added.

After a few quick goodbyes, they left, and only Pepper and I remained in the room.

I was sitting, sending a message on my phone when Pepper stood up and gently wrapped her arms around my head. I looked up at her, a little confused.

"Are you okay?" she asked, a little concerned.

"Yes. Nothing to think about it," I said simply.

I decided to talk to Pepper about the terrorist attack. I had never seen her so pale. After thinking for a long while, she came to the same conclusion I did—it's way out of our league.

And what I said to Pepper was totally correct. I don't feel any guilt. The blame is on the terrorists.

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