Chapter 599 The King Behind the Scenes
Obviously, Barron has long had an idea for Costco. By acquiring this company, Argos Retail Group will be able to extend its reach into its competitors. Amazon's home base - the North American market.
In addition, Costco also has many stores in Asia and the Chinese market, but the stores in the Chinese market are mainly in the Bay Area - Costco stores in the Bay Area can be said to be one of the most profitable stores in the world. one.
Costco entered mainland China very late and did not open a store in Shanghai until 2019. At that time, the store was extremely popular when it opened, which also left a deep impression on Barron.
The advantage of acquiring Costco is that the company does not have a controlling shareholder. Therefore, when making the acquisition, Barron only needs to ensure that he holds enough shares and obtain the approval of the company's board of directors. Like acquiring companies such as Hermès, you need to "battle" with the family or group that controls the company.
Similarly, the disadvantage is that it has no controlling shareholder - nearly 70% of Costco's shares are held by institutions, including TheVanguard Group, BlackRock, Berkshire Hathaway, and State Street , Geode Capital Management, FMRLLC (Fidelity) and other institutions with the largest shareholding ratio hold a total of nearly 30% of the company's shares.
Therefore, while Barrons needs to absorb Costco shares from retail investors in the secondary market, he also needs to deal with some of these institutions to buy their Costco shares.
The current share price of Costco is 70 US dollars, which is a 32% increase compared to the same period last year.
However, it will still be affected by the subprime mortgage crisis. Within this year, Costco’s stock price will drop to a minimum of about US$40. Therefore, taking advantage of this general trend, Barron’s can also pass through the secondary market. Acquire a certain percentage of Costco stock.
And for some institutions, as the subprime mortgage crisis gradually broke out, many of the assets they held were affected, and many of them required funds to remediate.
Under such circumstances, it would not be too difficult to persuade them to sell their Costco shares.
From now on, the funds under Barron's name have begun to absorb Costco stocks. This will be a relatively long process to slowly achieve a controlling stake.
To be specific, Costco is the largest membership chain warehouse retailer in the United States. Their business methods are still very different from the previous stores of Argos Retail Group.
But in terms of comprehensive investment income and help to Argos’ business, Costco can be said to be one of their best acquisition targets.
After all, as we all know, the retail industry in the North American market is highly competitive, and several of the world's largest retail companies are all in North America.
Argos's model is suitable for Europe, but it may not be suitable for North America, let alone Asia - in the original time and space, Argos' e-commerce exploration into the Chinese market ended in failure.
If Argos Retail Group wants to enter the North American market and develop from scratch, it will definitely be very difficult and it will face huge competition - and in the e-commerce field, it also needs to face the pressure of Amazon.
The best option is to expand the market by acquiring Costco, and then use Costco’s channels to supplement its e-commerce sector.
Of course, this is something that needs to be considered later.
……
"Congratulations, Mr. Guanhai, I hope you can win the final victory in this election."
"Thank you for your support, His Highness the Duke."
During this time, Barron also took the time to meet privately with Ao Guanhai.
This year is an election year in the United States, and in early June, Ao Guanhai became the candidate of the Donkey Party in the intra-party election of the Donkey Party.
In this internal election of the Donkey Party, Ao Guanhai’s biggest opponent is Hillary, the wife of former commander-in-chief Zipperton.
In this intra-party election, Ao Guanhai received 1,762 votes for party representatives and 394 super electoral votes, for a total of 2,156 votes.
Hillary received 1,637 party delegates and 283 super electoral votes, for a total of 1,920 votes.
Because according to the rules, 2,118 votes were needed to win the Donkey Party nomination, so Hillary had no choice but to admit defeat and chose to withdraw from the race. Ao Guanhai received enough votes and was finally confirmed as the candidate of the Donkey Party.
It is also worth mentioning that this time, the candidates competing for the Donkey Party also include the beauty from Barron’s previous life before his rebirth, but he and the other four candidate, already trailing Ao Guanhai and Hillary Clinton in January this year, chose to withdraw from the competition.
In this election, because George W. Bush has been re-elected for two terms, Ao Guanhai's opponent, the candidate of the Elephant Party, was already identified as Arizona U.S. Senator John McCain in March this year.
As mentioned before, during and before the election, the country's economic situation will have a great impact on the election results.
Because of the impact of this subprime mortgage crisis, the public has a lot of complaints against the currently in office Xiang Party. Therefore, judging from some current survey data in this election, the situation of the Donkey Party is still relatively optimistic. .
In this meeting between Barron and Ao Guanhai, it can be seen from the other party's face that he is still very confident about the upcoming election.
Of course, after Ao Guanhai takes office, he will have to worry about the subprime mortgage crisis...
Ao Guanhai's affection for Barron is not only because Barron has provided him with a large amount of funding through certain channels, but also because the media that Barron can influence, including the Sinclair Group, have a strong influence on Ao Guanhai. In this campaign, it is also a very important voice channel.
In addition to Ao Guanhai, Barron also took advantage of this opportunity to meet with many people, including some Wall Street capital.
For example, Jamie Dimon, chairman and CEO of JPMorgan Chase.
JPMorgan Chase has just acquired the bankrupt Bear Stearns. It can be said that it has made some gains in this subprime mortgage crisis. This is not only the expansion of JPMorgan Chase’s scale, but also their self-proclaimed contribution to "rescuing the economy." "Execution of responsibilities.
Judging from the name JPMorgan Chase, this one of the Wall Street giants is related to the Morgan family.
In fact, there are now two Wall Street giants named "Morgan", namely Morgan Stanley and JPMorgan Chase. These two companies are often called "Big Morgan" and "Little Morgan".
Their appearance can be traced back to nearly 80 years ago, and this is also related to the famous "Titanic"...
If someone has ever been behind the scenes of the United States If you are the king, then the Morgan family is one of the most qualified candidates to be nominated.
At the beginning of the 20th century, the financial capital directly controlled by the Morgan family accounted for 38% of the financial capital in the United States, with a total value of nearly 20 billion U.S. dollars. There was also an insurance asset of 12.5 billion U.S. dollars, accounting for 10% of the U.S. insurance capital. 65% of the industry.
They once led the feat of saving the American economy——
In October 1907, the New York Stock Exchange's stock price fell by 50% year-on-year, and there were many runs on banks and trust companies.
As a large number of state and local banks and businesses failed, panic spread throughout the country and became known as the Panic of 1907.
At that time, the United States had not yet established a central banking system and could not effectively intervene in the market.
J.P. Morgan, the leader of the Morgan family, came to the rescue and quickly summoned executives from major banks and trusts to form a joint consortium with major families, including Rockefeller, to be responsible for allocating inter-bank capital flows into the market to sweep away goods, effectively effectively restrained the stock price from plummeting.
With the strong intervention of multiple family consortiums headed by Morgan, the panic ended in less than a month.
However, the American government also began to realize that private consortiums were too powerful and began to gradually curb large families.
This paved the way for the birth of the Federal Reserve five years later...
(End of this chapter)