source | Think tank Bai Xiaosheng (zhikubaixiaosheng)
Baofengyingyin was once one of the necessary software for computer installation. Baofengyingyin, Fengxing, Kuaibo, and PPS are artifacts that carry the youthful memories of the generation born in the 70s and 80s.
At that time, Youku, iQiyi, , and Tencent Video had not yet been established. However, now that Baofeng Video has died, people are filled with emotions.
1
Baofeng Video hung up
On July 28, 2019, Baofeng Group issued an announcement stating that the actual controller of the group Feng Xin had been taken compulsory measures by the public security organs on suspicion of committing a crime.
In early September 2019, the Shanghai Jing'an District Procuratorate approved the arrest of Feng Xin on suspicion of bribery of non-state personnel and job embezzlement.
At the same time, the resignation of almost all senior executives of Baofeng Group (300431.SZ) attracted the attention of the Shenzhen Stock Exchange.
Except for general manager Feng Xin, who has been approved for arrest and is performing his duties in prison, all senior managers of the company have resigned.
On the evening of November 21, 2019, Baofeng Group announced that the company had recently received a "Notification Letter" from Dahua Accounting Firm . Due to the further expansion of the business scale of Dahua Accounting Firm (Special General Partnership), the 2019 annual report audit business It is onerous and can no longer fully meet the needs of the company in terms of time and personnel arrangements. I am hereby notified of my resignation as the auditor of the 2019 annual report.
No one even dares to audit the annual report. Baofeng used to have unlimited glory.
On March 24, 2015, Baofeng Group was listed on the GEM and continued to rise by the daily limit. The stock price reached the highest level of 123 yuan. Within two months of listing, 10 billionaires, 31 multi-millionaires and 66 millionaires were born within the company. Less than a year after
was launched, Baofeng has successively developed five major businesses: VR (virtual reality), TV (television), shows, videos, and culture. At the same time, he participated in the establishment of 5 industrial funds and achieved unparalleled success.
However, the burning of money and the lack of feathers brought Baofeng Group into the abyss of huge losses.
In the blink of an eye, Baofeng Group’s share price fell from a maximum of 123 yuan to a minimum of 3.42 yuan.
At this point, Feng Xin, who has grown from a founder of a video website to a billionaire, has a similar trajectory to Boss Jia who went to the United States, but his situation is even more embarrassing.
Feng Xin, who has been a Buddhist for many years, and the boss of HNA, who has been a Buddhist for many years, told us one thing: Buddhist bosses are not suitable for the capital market.
So, why did Baofeng Video crash? In fact, not only Baofeng Video, but also institutions and many investors such as China Everbright Securities, China Merchants Bank, Shanghai Huarui Bank, Jupai Investment, etc., a large wave of Chinese-style fools have hit the Internet.
This starts with a brokerage company.
2
Origin and Destruction
In 2015, Baofeng Technology was listed on the A-share GEM.
In the same year, a brokerage company, Yijie Capital, a subsidiary of Yijie DealGlobe, began to look for Chinese buyers for a sports media company founded by two Italians.
This is an unexpected encounter with Feng Xin, who loves football. Beauty is in the eye of the beholder, or he may be an Internet celebrity wearing makeup.
The Italian company is called MPSilva (MPS) and was founded in Milan in 2004 by Riccardo Silva and Andrea Radrizzani.
This sports media company, MPS, acts as an intermediary, responsible for selling the broadcast rights of Serie A clubs to TV stations and online platforms around the world, earning the difference.
later expanded from football to F1 racing, motorcycle racing, golf, French Open, and Serie A. When
MPS was at its peak, its business covered more than 200 countries and regions around the world, with more than 90 global event property rights, more than 30 event rights agency partners, and more than 10,000 hours of broadcast time every year. At its peak,
had more than 3,500 events, more than 30 event rights agency partners, more than 200 global TV clients, and an international team working in more than 40 languages.
In March 2015, Chinese investors, Ricardo and others had reached an agreement to acquire 65% of MPS's equity, and had even paid a deposit of US$70 million.The only thing left for
is to raise the full quota of 5.203 billion yuan, pay the bills, and deliver the equity.
The trader was frantically raising funds. As the managing partner of the entire fund, Everbright Securities mobilized all available resources to raise funds frantically from various channels and mobilized all available channels.
Funds from private enterprises, trusts, banks, third-party financial management, private equity, insurance, state-owned enterprises, private enterprises, retail investors, no matter what kind of money they want, a steady stream of money has gathered together, 5.203 billion yuan. To complete all this, only It took three months.
In 2016, the MPS acquisition was officially completed, with a net transaction value of US$637 million.
Storm Group and Everbright’s plan is to inject MPS into the listed company within 18 months after completing the preliminary delivery of 65% of MPS’s equity. After the acquisition of
, investors realized that they had fallen into a trap.
MPS's business is essentially an intermediary service. It is a second-tier dealer. Its core asset is people. When people leave, there will be nothing left.
Moreover, the international sports copyright market has a complete discourse system. If you are not in this circle, you will not understand what they do if you go in, and they will not let you play.
Obviously, no one in the M&A team composed of Everbright and Baofeng has the ability to integrate into this discourse system. The core of
MPS is copyright income. However, most copyrights will expire immediately, especially the core copyrights of Serie A and Arsenal, which will all expire in 2018-2019.
This means buying a company that has no future in business.
MPS has successively lost Premier League , Scottish Premier League, American Cup and other football copyrights, and lost its strategic cooperative relationship with Arsenal.
Not only that, MPS owes $44.4 million in unpaid fees to Serie A, $10 million to the Bundesliga, and £5 million to the French Open. In addition, there are bills to pay from the Premier League, the International Handball Federation, and Formula One.
In August 2018, the French Tennis Federation applied to the British High Court to open bankruptcy liquidation proceedings against MPS to repay MPS's debt of more than US$6.6 million to FTT. This move directly pushed MPS into a desperate situation
In the end, in October 2018, the British High Court declared that MPS was officially bankrupt and liquidated, and sentenced the company to death.
With bankruptcy, the company's remaining assets and income will belong to creditors. This also means that the Chinese investors who hold 65% of MPS's equity have lost all their money, and all the 5.2 billion acquisition funds have been "wasted".
3
People are stupid and have too much money
Ricardo and Andrei were holding the beautiful woman in their arms and playing tricks on each other while laughing.
5.2 billion yuan of China’s wealth destroyed = the dream of two Italians came true
5.203 billion yuan and about 700 million US dollars were obtained. The two Italians, Ricardo and Andre, immediately became wealthy.
Ricardo acquired Europe's second largest model agency MP Management
and invested in Mast Capital, a real estate development company in Miami, USA, and purchased a number of real estate properties.
also acquired the American football club Miami FC. In 2017, a large sum of money was donated to renovate the team's home stadium at Florida International University. The stadium has now been renamed Ricardo Silva Stadium.
As for Andre, he founded a sports and media investment company called Aser.
In April 2015, while preparing to sell his stake in MPSilva, Andre founded Eleven Sports Network, an international sports television and online platform, through Aser.
In 2018, Eleven Sports won the broadcast rights of La Liga and Serie A in the UK and Ireland .
In May 2017, with a large sum of money paid by the Chinese, Andre fully acquired the famous Premier League club Leeds United and became the owner of the club.
With Leeds United's every move, Andre has now become a celebrity in European sports circles and social circles.
4
Who will pay?
Behind the counterattack of two Italian losers to become super rich, it was the Chinese who paid the bill, and the landmines laid by peddling financial products have also exploded.
In 2016, Everbright Jinhui, together with Baofeng Group Co., Ltd. and others, established the Jinxin Fund and planned to directly or indirectly acquire 65% of the equity of the overseas MP Silva Holding S.A. ("MPS") company through the establishment of a special purpose vehicle. The amount is approximately US$1 billion.
Knock on the blackboard: Readers of investment and financial management should pay attention to what is the inferior fund share. This is a very important knowledge point.
In this case, many investors purchased junior shares of Jupai’s Everbright Global Select Fund. When the investment fails, the junior partners must first cover for the priority and intermediate partners, and bear the highest risk, but The corresponding returns are also the largest. The priority and intermediate grades mainly focus on fixed income, while the inferior grades can share most of the excess returns.
According to description, Jupai’s Everbright Global Select Fund, namely Baofeng Acquisition MPS, should be withdrawn when it expires in 2018\19, and all investment amounts in this project may suffer losses to zero.
Fatty took a look at the contract terms of the Everbright Global Select Fund, a subsidiary of Jupai at that time, and paid attention to the content marked in the red box, which promised to guarantee capital and interest if the investment fails.
is knocking on the blackboard again. is a word game. There are traps hidden in the nuances, confusing the concept. Guaranteed capital and interest refers to the failure of the merger, but the project merger was successfully completed in May 2016. Therefore, operational failures after mergers and acquisitions are not included. See this, you understand.
The contract terms of Jupai’s Everbright Global Select Fund
After many changes, Jinxin Fund currently has a total of 14 investors. Among them, the largest shareholder is China Merchants Wealth Asset Management Co., Ltd., with a subscription amount of 2.8 billion yuan.
The wealth management products of China Merchants Bank Wealth Asset Management Co., Ltd. provide a 5.5% rate of return and part of the excess income share. In the wealth management market, this level of income is really not worth the risk.
In fact, whether it is a domestic M&A or an overseas M&A, the most common method of M&A is to establish an industrial fund to cooperate to complete the target acquisition, and then agree to inject assets into the listed company under certain conditions.
However, Baofeng’s merger and acquisition process has not been completed. Not only were there problems with the plan design, merger path and terms, but there were also obvious errors in the judgment of the target itself.
The Italians' tactics are not very clever. Similar to many domestic acquisition pitfalls, the original major shareholders left behind a large amount of debts, hidden debts and other new shareholders to foot the bill before leaving.
Moreover, the issue of corporate debt and copyright expiry is incomprehensible. When the contract expires, there is no need for investment banks to do due diligence. It can be found online. For any organization like Serie A, bidding and results must be made public. The original major shareholder of
must have cheated, but the professional due diligence capabilities of domestic intermediaries and capital parties are also worrying, and no such obvious big hole was found.
You must know that as the acquirer, Jinxin Fund, with Everbright as the managing partner, has not agreed with its counterparties Ricardo and Andre on horizontal competition restrictions and minimum performance compensation commitments, which is not the case for domestic listed companies. The terms of the merger and acquisition are the most basic. After the acquisition of
was completed, the two Italians started afresh, established several sports copyright companies, got involved in the sports copyright business, bought out Serie A, and cut MPS's throat behind the scenes.
Andre's new rights company Eleven Sports paid IMG a large sum of money to acquire the broadcast rights of Serie A in the UK and Ireland, which undoubtedly put another nail in the coffin of MPS.
The MPS was declared broken by the British court, which was the last straw for Baofeng Video.
Is it a lack of ability on the part of the Chinese investors, a dereliction of duty caused by a lack of motivation, or is it the trader in question, the counterparty, and the international intermediary who co-starred in a completely confusing and failed investment case.
We don’t know. The only certainty is that Baofeng’s market value of tens of billions has been wiped out. Baofeng Video has failed. The youthful memories of our generation are gone, and the investors’ 5.2 billion is gone.
5
Postscript
Fatty’s principle of doing things is that he would not dare to do anything shameless, let alone something that would cost his life. But some people don’t even want to lose face and dare to make any money.
If the publicity before the investment was so exciting, then the current ending is so heart-breaking.
In the turbulent financial boom in the past few years, many people have lost all their life's money, but behind this, millions of ordinary people are living in dire straits and are helpless. They lost their hard-earned money, pension money, children's tuition fees, money to buy a house for marriage...
If the world is a big casino, everyone wants to win, and some people want to win a few dollars, but they don't. Lost my whole life.
Fatty finally emphasizes that income after sleeping, money begets money, and freedom of wealth, no matter how glamorous they are, do not get involved in financial investment products that you cannot understand.
