Chapter 248: Before the Storm

Capet Pictures didn't have its own distribution channels before, so it had to cooperate with other film companies. It was unavoidable.

Now, Capet Pictures had money, people, and good projects. If others wanted to collaborate, they had to bring enough chips to the table.

"The negotiation for the acquisition of YouTube by Google should be wrapping up, right? What's the final price?" Charles leaned back in his chair and asked.

"1.65 billion dollars, paid in cash, the handover will be completed next month," Phyllis Jones quickly explained.

"We have a 40% stake, so we're getting about 660 million dollars. It's good to sell it," Charles said, although he had high hopes for YouTube. However, the battle over intellectual property between Hollywood and Silicon Valley was getting more intense.

There was too much unauthorized video content on YouTube. Content creators like Disney, Viacom, and Time Warner were overwhelmed with complaints every day.

"Google is negotiating with Viacom Group to pay for the use of its copyrighted content, but the specific process is still unclear," Phyllis Jones shook her head.

Charles smiled, "Didn't YouTube try to negotiate with them before? YouTube has promotional value for Viacom's programs. Putting their shows on YouTube benefits them."

"How did Viacom respond? They felt insulted and said they didn't need anyone telling them 'This is good for you!'"

Viacom claimed that many of its popular programs were uploaded online without permission, forcing it to spend $100,000 monthly to monitor YouTube content.

Viacom questioned why YouTube could successfully block spam, pornography, and extremist content but couldn't stop the upload of Viacom's copyrighted materials.

"YouTube isn't making money now, and Viacom scoffs at sharing ad revenue, insisting on an upfront guarantee payment!"

How much money did YouTube have? Viacom wasn't asking for a few million; it was demanding hundreds of millions in advance.

Phyllis Jones nodded, "There's a new type of internet intellectual property law recently, and Hollywood and Silicon Valley are lobbying against each other."

The tension between Hollywood and Silicon Valley was no secret. The rise of the internet had greatly impacted Hollywood's revenue from copyrights.

"There's a Hollywood charity dinner hosted by Governor Arnold Schwarzenegger tonight at the Peninsula Hotel in Beverly Hills. Are you going, boss?"

Charles was taken aback, "Arnold's support rate should be pretty good now, right?"

Well, it was another election year for the California governor. Arnold Schwarzenegger had come to power in 2003 through a recall of the previous governor and had been governing for three years.

"His support rate is the highest right now, and he has publicly announced his intention to seek re-election," Phyllis Jones nodded.

"Even though he's a Republican, he's still a Hollywood-born governor, so we should support him," Charles laughed. What did it matter if he was mismanaging California or if the state's financial deficit hadn't improved?

You had to admit, governors had quite a bit of power. Governors had executive power, the state Senate and House of Representatives formed the state legislature, and the state courts were independently judicial - the state government, like the federal government, had a separation of powers.

"I heard Clint Eastwood criticized some of Arnold Schwarzenegger's policies?" Charles knew Clint Eastwood was one of the few Hollywood stars who supported the Republican Party.

"Clint Eastwood was elected vice chairman of the California State Parks and Recreation Commission in 2001 and was re-elected mid-term.

The main conflict between Clint Eastwood and Arnold Schwarzenegger is over the state government's plan to build a six-lane, 26-kilometer toll road. Clint led the entire commission in opposing it."

Phyllis Jones shrugged, "So, the two have been at odds ever since."

In the afternoon, Charles drove his white Mazda RX-7 out of the company. While passing through downtown Los Angeles, he saw many advertisements for discounted houses.

"Bonus area!"

"Free appliances and cars with purchase!"

Various house promotion methods were emerging one after another. Charles smiled in the car. The Fed's interest rates had reached their peak by June, and after July, urban home sales in the U.S. had declined.

The high real estate prices finally stopped rising. Not only in big cities like Los Angeles and New York, but countless American cities had these advertisements.

The feverish housing market had finally reached its freezing point. Charles only needed to wait a few more months until the bubble burst and house prices dropped, causing mortgage borrowers to default.

Falling house prices, a hit to the banking industry, then a stock market crash, and an energy crisis--what a magnificent financial tsunami!

Every time Charles thought of the global financial tsunami triggered by the U.S. subprime mortgage crisis, his heart trembled with excitement.

Meanwhile, Google's acquisition of YouTube was finally signed. As a major shareholder, Dawn Investments had initially demanded 2 billion dollars, and after months of negotiation, it finally settled for 1.65 billion dollars in cash.

Lily Ying directly followed Charles' instructions and had Dawn Investments channel the funds into internet companies in the stock market.

Apple was a key target for Charles because he knew it was set to launch the revolutionary iPhone next year.

Currently, Apple's stock was about $55 per share, with a market value of less than 41 billion dollars. Capet Fund directly spent $2 billion to buy 5% of the shares.

Amazon's stock was about $26 per share, with a market value of less than 13 billion dollars. Capet Fund spent $140 million to buy 5.25 million shares, accounting for 1.2%.

NetEase had a market value of about 2 billion dollars. Capet Fund spent $57 million to buy 2.85% of the shares.

Similarly, Baidu had a market value of about 2.1 billion dollars. Capet Fund spent $63 million to buy 3% of the shares.

By October, Lily Ying had already invested all the funds into internet companies in the stock market as per Charles' instructions.

Next, Lily Ying began researching the American real estate market, preparing feasibility and risk assessment reports.

Because, the storm was coming!

*****

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