Professor Parkinson's entire plan sounds rather complicated, but in essence, it boils down to one thing: he doesn't intend to make money from future passengers, but from current investors.
This is because Goldman Sachs is not using its own money to build this railway. Instead, it plans to raise funds through the stock market by establishing a joint railway company and then use that money to build the railway.
Therefore, this money doesn't actually belong to Goldman Sachs. It's the capital of this newly formed joint railway company, and Professor Parkinson intends to turn this money into Goldman Sachs' money. That's more or less the strategy.
This, to some extent, brings a classic movie scene to mind again.
And this is how capital makes money. For a while, some bigwigs liked to educate young people to change their mindset, to look at the world from a different angle, and then they would discover that money isn't earned, it's picked up.
That's roughly the idea. You always thinking about earning money by honestly operating an industry is wrong; it's an outdated way of thinking.
The new way of thinking should be to draw a pie, attract others to spend money to buy this pie, and then take the opportunity to abscond with the money. This is the new era's way of making money, and it's also how capital makes money.
For instance, between 2010 and 2020, the entire investment circle was swept up in the internet wave, and countless internet companies sprung up during this period. All you had to do was pitch a project, find a blind spot in a traditional industry, add an "Internet+" label, and present a PowerPoint to an investor, and you could immediately secure substantial investment.
How crazy was that situation? In one year, over 50,000 emerging internet companies nationwide received angel round investments of over one million yuan. These are truly incredible figures.
So, were all these 50,000 emerging internet companies unicorns?
Of course not. When the concept of shared bicycles gained traction, over 6,000 shared bicycle brands were created nationwide in a single month, and over 2,000 of them received investments from investment institutions.
And now, what is the outcome… Sigh, thinking about my 188 yuan deposit makes me feel uneasy.
Shared bicycles are like this, and other industries are no different. But looking back ten years later, these internet companies are essentially all gone. Apart from a few true unicorns that emerged from the chaos, the rest of the companies simply vanished without a trace.
It seems that the investments made by these investment institutions have all gone to waste, and the entire investment world is filled with fools.
Is that the reality?
Of course not. These investment institutions have already made a fortune, laughing all the way to the bank.
Upon reading this, you might find it very strange. If 99.999% of the invested companies failed, how could they still have made a fortune and be laughing all the way to the bank?
Because these investment institutions, like Professor Parkinson's strategy, are not profiting from the operational profits of the companies. Instead, they are profiting from the various financial activities of the companies.
Firstly, for investment institutions, after investing in the angel round, if the company's data looks good, or if the story can continue to be told, then opportunities for Series B investment, also known as venture capital, will soon arise.
Generally, Series B investment amounts are more than ten times that of the angel round. And the shares obtained through these investments are definitely acquired from the angel round investment institutions. Thus, it is equivalent to the angel round investment institutions cashing out their shares directly through Series B investment.
For example, if an investment institution invested one million yuan in the angel round and obtained 50% of the shares. Then, by the time of the Series B investment, with a total amount of ten million yuan, generally, if the angel round investment institution chooses to exit at this point, they can basically walk away with more than five million yuan in cash.
This is equivalent to the angel investment multiplying fivefold.
This means that for every five companies invested in, as long as one of them reaches the Series B investment stage, it is considered a very successful investment. In reality, the amount of Series B investment could be twenty or thirty times higher, thus allowing for an even higher failure rate.
And the same money-making method can continue, because there will often be Series C, Series D, Series E investments, and so on. A famous example is Tencent in its early days; in 2003 alone, it received a staggering nine rounds of investment, each round with increasingly terrifying investment amounts.
The institutions that initially made angel round investments in Tencent had already achieved returns of more than tenfold during this process.
Of course, if this institution knew how much Tencent's stock price would be in the future, they would probably cry their eyes out… they missed the opportunity to surpass their father and become the world's richest man.
That's right, this institution was founded by the son of a certain richest man. He once held 50% of Tencent's shares. If all those shares had been retained, the world's richest man might have had to change.
Of course, smart friends might have already noticed that no matter how many rounds of investment continue, it seems that investment institutions are just making money from other investment institutions. This will inevitably lead to some investment institutions losing money, and the amount of losses will definitely be higher than the amount of profits made, because these invested unicorn companies are never stingy when spending money, after all, this is investors' money.
So, where do these later-round investment institutions make their money?
That, of course, is the securities market, which acts as a backstop for all investment institutions.
Once a company starts receiving investment from investment institutions, it essentially has only one outcome: to go public, because only after going public can it harvest money from shareholders.
If all previous investment institutions invested a total of ten billion yuan, then after going public, the total market value would definitely exceed one hundred billion yuan, because these investment institutions need to earn back their invested money manifold from shareholders.
This also explains why many so-called unicorn companies actually have mediocre performance but are particularly fond of bragging and telling stories at various events. They also like to market their company founders, posting frantically on various social media platforms, jumping on any bandwagon for exposure, and not behaving like companies but more like internet celebrities.
These are all results driven by investment institutions. The fundamental goal of these investment institutions is to facilitate these companies going public, which requires shareholders to recognize their value. In other words, these companies need to be famous, and shareholders believe they will rise after listing.
Thus, many things that were incomprehensible are easily understood.
In summary, after 2010, no investment institution relied on a company to genuinely make money through its operations. All of them intended to recoup their money from the financial markets.
Professor Parkinson's strategy is the same, except he doesn't deal with investment institutions. This approach is too low-level, especially since with Goldman Sachs orchestrating, even a trash company can go public directly. What Goldman Sachs needs to consider is simply how to legally and legitimately turn shareholders' money into its own money within a short period.
"How is my plan? Please, Dr. Cooper, offer some suggestions!" Professor Parkinson asked triumphantly.
Dr. Cooper, our Dr. Cooper, pondered very seriously, as if truly trying to find a loophole, but in the end, he could only shake his head helplessly and say, "Your plan is indeed very mature. As long as it can be executed smoothly, making money is a certainty, and there is no risk. It's a plan that no one can refuse!"
"It's rare to hear such words from you, Dr. Cooper. It truly moves me. I thought you would mock me thoroughly!" Professor Parkinson said cheerfully, then heard Dr. Cooper continue, "But what if your plan doesn't go smoothly?"
"..." Professor Parkinson was stunned for a moment, his face turning a bit red. "How could it not go smoothly? I have considered every aspect of the plan very thoroughly. For any potential hiccups, I have detailed contingency plans. So, please rest assured, even if this plan encounters setbacks, it will still be operated smoothly."
"I certainly hope so too!" Dr. Cooper nodded. "But the most crucial point of your plan lies in being able to raise a colossal sum of over 2,000 billion US dollars from the stock market. And this is just the beginning. In the next few years, you will need to cumulatively raise over 3,000 billion US dollars through the stock market to support the complete operation of your plan."
"However, the figure of 5,000 billion US dollars is simply too enormous. Even the securities market in our United States can hardly raise such a vast sum. After all, the total market capitalization of the 00 network has not yet exceeded 1,000 billion US dollars, and you are directly aiming for 2,000 billion US dollars. The difficulty is extremely terrifying. Any setback could trigger a full-scale collapse!"
Dr. Cooper's analysis was quite reasonable, as these points were very straightforward.
However, after listening, Professor Parkinson's face broke into a smile. He thought this fellow had found some issue, but it turned out to be such a trivial matter. Thus, Professor Parkinson said without hesitation, "Dr. Cooper, you don't need to worry about these issues. Since I devised this plan, I am confident in raising two trillion US dollars!"
"Therefore, I am not only planning to list on Nasdaq but will simultaneously list on the five major markets in the United States, as well as London, Paris, Hong Kong, Tokyo, and so on, across ten major global stock exchanges. With the combined strength of these markets, raising 2,000 billion US dollars will be effortless!"
"I see!" Dr. Cooper nodded thoughtfully. "So, within a short month, there has been such a fierce propaganda offensive and hype globally. It turns out that this is all the momentum you've created with enormous funds, with the aim of making global fools pay for you!"
"More or less. However, the promotional spending I truly paid for is only about a quarter of the total promotion. The remaining 75% is all spontaneous publicity from various media outlets. I haven't spent an extra cent! Especially the Chinese market, I never intended to list there, but I didn't expect that the popularity and praise from Chinese media would rank second in the world. It's too interesting! Hahahaha!" Professor Parkinson said triumphantly.