Simon arrived in Berlin on February 10th and left for Finland on the afternoon of February 12th.
During his two and a half days in Berlin, Simon attended the Berlin Film Festival's opening ceremony, discussed potential collaborations in the internet sector with German Telecom executives, and acquired a company tentatively named Tempus Films, which had produced several notable films in the original timeline.
Contacts with executives from Constantin Film, the Quandt family of BMW, and high-level German government officials were made, but no immediate collaborations were established.
February 13th was a Saturday.
Due to changes in the original plan, Nokia's management had to give up their weekend to accommodate Simon's schedule.
In 1992, Nokia experienced significant growth, capitalizing on the global transition in the mobile communications industry from analog to digital signals. With the early implementation of the second-generation digital communication technology, Nokia had a leap in development.
According to the recent financial report, Nokia achieved a total sales revenue of 9.3 billion Finnish Markkas in 1992, equivalent to about $1.47 billion, given the exchange rate of roughly 1 Markka to $0.157 over the past year. Compared to 1991, Nokia's revenue saw a significant increase of 67%.
Out of the total 9.3 billion Markkas, Nokia's mobile phone business accounted for 5.2 billion Markkas, representing 56% of the sales.
This part of the revenue indicated that Nokia sold a total of 3.76 million phones.
In comparison, Motorola, the world's leading mobile phone seller at the time, had a total sales volume of 4.39 million units in 1992.
In the original timeline, Nokia trailed behind Motorola in the first half of the 1990s, only surpassing them in 1998, after which Nokia left Motorola far behind.
Due to Simon's early involvement, Nokia's gap with Motorola in mobile phone sales in 1992 was already quite narrow.
With the opening of the North American market to Nokia at the end of last year and the presence of Verizon Telecom as a sales channel within the Westeros system, Nokia was poised to enter the North American market, which is notoriously challenging for foreign telecommunications companies, and compete closely with Motorola this year.
Additionally, Nokia, being based in Europe, had a distinct local advantage over Motorola.
Coupled with Nokia's technological and product leadership in GSM, it was expected that Nokia could surpass Motorola in the mobile phone sector this year.
However, this dominance was confined to the mobile phone business.
Motorola, with deep roots in various fields such as computing and semiconductors, like IBM's PC business, did not primarily rely on mobile phones. Therefore, Motorola's diverse operations would likely result in a less aggressive response to Nokia's advancement in the mobile phone industry. Consequently, Motorola would be unaware of the significant market opportunities they missed.
To put it into perspective, in 1992, global mobile phone sales were around 13 million units. Within the next five years, this figure would rapidly exceed 100 million units. In less than a decade, Nokia alone would surpass 100 million units in global sales.
Despite the rapid revenue growth, Nokia posted an annual loss of 380 million Finnish Markkas for 1992, equivalent to $60 million. However, the loss was not due to poor management but rather Simon's expansion-focused strategy. Achieving profitability for Nokia was not difficult, but Simon prioritized long-term growth over short-term profits, reinvesting more funds into the company's development.
Simon had acquired Nokia three years ago for $200 million and had since invested an additional $300 million, totaling over $500 million. This investment resulted in Nokia achieving $1.47 billion in revenue by 1992.
Based on Nokia's revenue scale and high growth rate, its valuation, if publicly listed, could conservatively exceed $2 billion.
Westeros Company held 100% of Nokia's shares, and a $500 million total investment yielding a $2 billion market value in three years was an enviable return on investment for most funds.
With continuous financial support from Daenerys Entertainment, Cersei Capital, and other companies, the Westeros system never lacked funds. Even if Nokia required substantial additional funding for 1993, Simon could fully cover the costs. However, as Nokia started to rival the old electronics giant Motorola, its continued rapid expansion would face more than just commercial obstacles.
Whether from the divided interests of various European countries or the cautious North America across the ocean, noticing the rise of a telecommunications giant with little to no connection to themselves, it was almost certain that Nokia would face instinctive suppression from many nations in the future.
The simplest way to mitigate these pressures was to take Nokia public.
By listing on the stock exchange and selling Nokia shares to investors in Europe and North America, any suppression of Nokia would also mean harming the interests of local investors.
For Simon, he preferred for Nokia to be listed in North America.
However, as a company headquartered in Finland with most of its business in Europe, Nokia's immediate priority was to strengthen its European foundations.
Thus, choosing to list in Europe was undoubtedly the better option for Nokia at this stage.
Simon's visit to Finland was to personally discuss Nokia's IPO with the management team.
Given Nokia's rapid development and strong financial performance, it was an attractive IPO candidate for major capital markets, so pursuing an IPO would not be problematic.
The critical issues were the valuation during the IPO and the percentage of shares to be offered.
For Simon, minimizing the share dilution in the first public offering was preferable. However, issuing too few shares might not achieve the IPO's primary goals. Issuing too many shares, on the other hand, would be regrettable.
Currently, Nokia's valuation was roughly around $2 billion.
Such a valuation might seem impressive to many, but Simon knew that during the peak of the new technology wave around 2000, Nokia's market value had once approached $200 billion.
The difference between $2 billion and $200 billion is staggering—an entire 100-fold difference.
Letting go of $1 billion now could almost equate to losing nearly $100 billion in future market value.
Moreover, because the Westeros system had ample funds and could easily obtain loans, Nokia didn't need to raise much capital externally.
After a full day of discussions on Saturday, Simon finally decided to set the proportion of new shares to be issued at 20%.
With Nokia's current valuation of about $2 billion, issuing 20% new shares could raise $400 million. However, considering Simon's memory of Nokia's peak market value of $200 billion, this equity could be worth $40 billion.
Of course, the situation couldn't be assessed purely in this manner.
The telecommunications industry is heavily influenced by national policies. Even a vague "national security" concern could prevent a telecommunications company's products from being sold in certain regions. Therefore, if Nokia remained entirely private and did not align its interests with European and American investors, the company might not have the chance to reach its potential peak under external pressures.
So, this 20% share issuance was just the beginning.
After the IPO, Simon planned to gradually reduce his holdings in Nokia over time.
Due to the differences in European countries' laws, Simon did not plan to implement the dual-class share structure used for America Online and Cisco for Nokia. Perhaps because of the vivid memory of Nokia's dramatic collapse, Simon had no intention of permanently controlling the company.
Or, more broadly, Simon did not intend to maintain perpetual control over any company within the Westeros system.
Rise and fall, this is an inevitable part of history.
Every enterprise, no matter how glorious, eventually faces decline.
Therefore, for companies within the Westeros system, whether it's Microsoft, Cisco, America Online, or Hollywood's Daenerys Entertainment, once Simon detects a company's irreversible decline, he plans to exit early and redirect capital into other emerging fields.
On the other hand, although Simon decided to list Nokia on the London Stock Exchange, during discussions with Nokia's management team, he also prepared a roadshow plan for North America, intending to invite North American investors to subscribe to Nokia's 20% shares.
Having spent the entire Saturday in Finland and agreed on the general framework for Nokia's IPO, Simon flew to Florence, Italy, that evening.
With the main plan in place, subsequent tasks would be carried out by Nokia's management and the Westeros company team. From the initial IPO filing to the final listing, the process was expected to take about six months, with trading anticipated to begin in August.
Florence.
The time was early Sunday morning.
Today was also February 14th, Valentine's Day.
Given Simon's dual-life perspective, he wasn't particularly sensitive to holidays. It was only after finalizing this European trip that he realized he would miss Valentine's Day in North America. When he mentioned this to Janet, she inevitably complained but did not insist that Simon change his schedule.
Of course, Simon had prepared gifts for both Janets in advance and planned to make it up to them when he returned.
In the countryside estate, Sophia Ficci was the first to wake up. Gently extricating herself from the man's embrace, she entered the bathroom and, seeing the "strawberries" on her neck in the mirror, felt a mix of mild annoyance and satisfaction at how this younger man was obsessed with her body.
After preparing breakfast herself, Simon, having completed his routine morning workout, joined her at the table.
The four major fashion weeks of 1993 were set to start at the end of February, and Gucci had been busy preparing for the upcoming spring shows.
After breakfast, they headed together to the Gucci headquarters in the city.
While admiring Gucci's upcoming fashion lineup for the fashion weeks, Sophia briefed Simon on the recent annual business performance of Melisandre Company.
Although the detailed financial report for Melisandre would not be available until the following week, Simon learned enough to confirm that the company
had also enjoyed very favorable financial results over the past year.
This strong performance was part of what gave Sophia the confidence to propose the creation of a fashion TV channel last year.
Although the fashion TV channel idea had been taken up by Simon, over lunch, Sophia brought up another acquisition plan that surprised Simon.
"Christie's, you mean that auction house?"
Seated in a historic Italian restaurant in downtown Florence, Simon was taken aback by the name Sophia mentioned.
Sophia nodded. "Yes, that Christie's."
Noticing Simon's somewhat peculiar expression, Sophia asked, "What's wrong?"
Simon quickly smiled and shook his head. "Nothing, it just feels a bit... odd."
"Hmm?"
"You see," Simon's smile widened, "in the future, my kids will have quite an edge when bragging to their friends. Others might say, 'My mom just bought a Gucci bag,' or 'My dad bid $10 million at Christie's for a famous painting.' My son, on the other hand, could say, 'Gucci belongs to my family, and so does Christie's.'"
Imagining the scene Simon described, Sophia couldn't help but laugh, saying, "Your son only needs to say, 'My dad is Simon Westeros,' and that's enough."
My dad is Westeros.
Hmm...
Indeed, that does sound more imposing.
Simon briefly considered how to deal with a certain youngster in Australia who might cause trouble with reckless driving in the future, wondering if he should break the left leg or the right leg. However, he concurred with Sophia's suggestion, saying, "Yeah, I guess you're right."
Sophia gave Simon a playful glare. "So, you agree?"
Simon gestured slightly with his utensils. "I know nothing about Christie's or the auction industry. And why would such an established company be up for sale? What's the price range?"
Sophia explained, "Normally, we wouldn't have a chance to buy this company. Christie's has a history of over 200 years. But, as you know, the economic situation in recent years has changed. The 1980s saw the rise of Japan, and North America's economy also surged, leading to prosperous times for major auction houses. However, since the 1987 stock market crash in North America, the continued economic downturn has made affluent individuals more conservative with their spending. The bursting of Japan's stock market bubble also caused a rapid decline in the previously booming Asian market. Auction houses have since struggled. Moreover, the auction industry has a significant 'winner-takes-all' effect. Christie's has been trailing Sotheby's in recent years, holding about 30% of the auction market share compared to Sotheby's 40%. Despite this, the performance gap between the two has widened."
Pausing to organize her thoughts, Sophia continued, "In the past year, Sotheby's had a profit of $265 million, while Christie's managed only $52 million. Despite their market share gap being less than 10%, the profit disparity is fivefold. With the continuing shrinkage of the markets in North America, Europe, and Asia, and with the industry likely to keep worsening, Christie's has put out feelers for a potential sale."
The North American stock market began to recover after the Gulf War, but the overall economic situation remained precarious. Japan, in particular, was on a downward trajectory, and the era of Japanese investors buying up the world had ended. Last year's pound crisis had further plunged European countries into economic turmoil, making the current global economy the lowest point of the last decade.
Simon also knew this was the lowest point of the next decade.
Christie's concern over the deteriorating global economic environment and the resulting shrinking of the auction market, which could lead to a shift from a two-strong market structure with Sotheby's to Sotheby's dominance, was well-founded.
As the market contracted, the remaining affluent buyers who could afford expensive collectibles were likely to prefer the stronger player, which would only make Sotheby's stronger. On the other hand, Christie's would have to resort to lowering commissions or increasing marketing expenses to maintain its market share, further squeezing its profit margins.
The fivefold profit disparity between Sotheby's and Christie's over the past year was likely due to these reasons.
For Christie's to overcome its current predicament, the auction market would need to see a revival.
However, with the global economy still in a slump, although it's common knowledge that economies have cycles, nobody could predict whether Christie's could survive this downturn.
In this context, opting to sell and cash out made sense.
For Simon, this represented a significant opportunity.
No one was more aware than he was that with the rise of new technology waves, the global economy would rebound rapidly in the coming years. Despite Japan's prolonged economic stagnation, other Asian countries would see rapid growth in the next two decades, becoming the new affluent consumers in the collectibles market.
Buying Christie's now would be a prime opportunity to buy at the bottom.
Moreover, acquiring a long-standing auction house like Christie's would bring the Westeros system more than just commercial profits.
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