Becoming a Russian Oligarch After Rebirth
Chapter 260 Private Delisting_1

Chapter 260: Chapter 260 Private Delisting_1

Wang Ye didn’t know much about Volozh, after all, in his "past life", Yandex wasn’t a very famous company and he didn’t even know the name of the company’s founder.

It was only after he reviewed the data gathered by his Polar Bear Investment team that he started to understand a bit more about Volozh.

This man was definitely a technical genius!

Volozh was one of the first people in Russia to encounter computers, back in 1984 during the former Soviet era...

At that time, there were only a handful of computers in the entire Soviet Union!

And in the early 1990s, Volozh started a company focusing on search engine technology.

If we talk about the level of technology, it was definitely leading the world!

In 1997, Volozh co-founded Yandex, formally launching its Russian search service. This was one year ahead of Google.

By 2001, Yandex was the largest provider of Russian search services in Russia!

Currently, Volozh is the largest individual shareholder and CEO of Yandex, holding 15% of the shares.

The remaining 85% is owned by various investment institutions and individual investors. As the stock price has plunged by 97%, the current market value of the company is less than 4 million USD...

This was the current situation of Yandex.

.........

After a brief tour of the company lead by Volozh, everyone entered the main meeting room, ready to begin negotiations.

Well, there is not much to see in an Internet company.

Plus, the company has already laid off nearly half of its staff, so the entire building seemed empty and quite quiet.

Volozh was the first to speak: "Welcome, Mr. Mikhail, and everyone from Polar Bear Investment. We very much appreciate your trust in Yandex. In the current environment, we feel grateful that you are willing to invest in our company. It’s undeniable that since last year, the global internet industry has faced significant challenges. Yandex is no exception, and we currently have a very tight budget and really need fresh funding..."

He was very candid, openly discussing the external environment and internal difficulties.

Of course, these things can’t be hidden even if you wanted to. After all, investment companies aren’t clueless; they definitely did some research beforehand.

So, by taking the initiative to disclose all these conditions, he could at least win some goodwill.

After listening to Volozh’s speech, Wang Ye nodded with a smile, and then said, "Yes, the global internet industry is in a period of downturn, but in the long term, we are still optimistic about the development of the internet industry. We founded Polar Bear Investment with the aim of investing in global internet companies. Yandex is our first choice for investment!"

Volozh expressed his heartfelt gratitude, feeling deeply honored.

Through prior contacts, Volozh was of course familiar with the public background of Polar Bear Investment.

This was a company backed by the energy giant Yukos Group, which had recently acquired the Siberian Oil Company for a whopping 50 billion USD!

Although the news was not widely propagated, it was already well known in certain circles.

Clearly, this investment company had substantial financial resources!

Yandex, which was currently in trouble, would get to make a comeback if they could secure investment from Polar Bear.

"Mr. Mikhail, how much do you plan to invest? What are your requirements regarding shares or seats on the board?" Volozh asked carefully.

These were really the core issues!

How much money, for how many shares...

Wang Ye smiled, and said very directly, "Yandex’s current market value is very low, just a few million USD. We definitely plan to buy it outright. How much would it cost to privatize Yandex and delist it from the market?"

Volozh was surprised and vigorously shook his head. He said, "Mr. Mikhail, although Yandex’s current market value is indeed only a few million USD, as we all know, this is only because of the current internet winter, which has led to a serious undervaluing of the company. In fact, the headquarters building alone could probably sell for more than a few million USD. Plus..."

His speech was cut off by Wang Ye.

"Mr. Volozh, there’s one thing you need to remember: Yandex is still not making any profit! Every month requires a lot of funds. In a few months, your company will probably have to sell the headquarters building to pay employees’ salaries." Wang Ye said with a humorous smile.

On the surface, Yandex’s market value of a few million USD did seem rather low—the fixed assets alone were worth more than that. Along with their websites and technical patents, it should be worth somewhere around 20 - 30 million USD, at least.

But there is a reason for every company’s low valuation—we can’t just look at the surface!

Yandex was not making any profit. Even though they were advertising, the internet was not very prevalent, so there were not many ad placements. This revenue was far from compensating for the company’s monthly expenditures.

The company was still losing money.

During the heyday of the internet industry, these losses did not matter because everyone was looking at the company’s revenue for the next decade. There was plenty of venture capital for internet companies to burn in seizing market share.

But in the internet winter, no one dared to invest anymore, so the consequences of these losses started to surface.

The company’s account had no money left, but workers’ salaries still needed to be paid out every month, and various broadband fees, hardware purchases, etc. were not reduced...

Facing the prospect of depleting resources, the value of the company’s stock could only continue to plummet!

The stock price simply reflected the inevitable future of your company, so it could not really be called an undervaluation.

......

With one sentence, Wang Ye stripped all pretense away from Volozh. He was left speechless because he knew very well that this was the situation facing his company.

If there were no new funds coming in, he would not be able to sustain the company.

Even if they continued to lay off workers, there were still severance payments to make, costing quite a bit of money.

Moreover, the salaries of internet industry employees were generally high. Take Yandex for instance, the average salary of their employees exceeded 2,000 USD!

A single employee’s wages were equivalent to those of four university teachers...

Of course, since Yandex was Russia’s top Internet company, the employees they hired were also top programmers. They were worth the price!

With only a few hundred employees left, just their salaries would require a monthly expenditure of one million USD!

"Alright, Mr. Mikhail, how much are you willing to pay for the privatization and delisting of the company? Besides, I also want to know what your plan is for the future development of the company." Volozh asked in a weary tone.

If Yandex really were to be privatized, it might not necessarily be a bad thing.

Of course, this is from the company’s point of view.

But for the founders of the company like Volozh, it definitely was not good news.

After all, they were all termed as high-ranking executives of listed companies!

After the acquisition, they would have to follow the new boss’s whims...