Tech Giants: Starting from Bankrupt Companies

182: Chapter 182 Stock Exchange - Announcement TimeAt 11:00 AM, Spark Technology released an announcement:

[Plan Regarding the Spin-off and Listing of Subsidiary Spark Electronic Technology on the Shenzhen Stock Exchange Main Board]

Key points:

Proposes to spin off the consumer electronics business and establish Spark Electronic Technology Co., Ltd. The company’s core patents will belong to Xingchen Academy of Sciences, and the subsidiary will pay 5% of its revenue to Xingchen Academy of Sciences as a patent fee for using these patents.

Spark Technology will hold 70% of Spark Electronic’s equity, with the remaining 30% to be publicly issued. It will implement an A + B share structure with unequal voting rights; one A share will carry 10 voting rights. Su Chen will hold the A shares, ensuring absolute control. 30% of B shares will be issued to the market, and shareholders who do not contribute additional funds will have their shares diluted accordingly. B shares will only have dividend rights and no voting rights.

Use of raised funds: expanding production capacity, R&D investment, and supplementing working capital.

Expected listing date: April 1, 2024.

Within three minutes of the announcement, Spark Technology’s stock price shot up vertically.

It soared from 2,909 yuan per share all the way to the daily limit—3,199 yuan.

It wasn’t Spark Electronic listing, but the parent company hitting the daily limit. This was because the market anticipated that after the spin-off, the value of the subsidiary equity held by the parent company would be significantly revalued.

A-share ”Spark concept stocks” collectively rose:

Hongqi Automobile (holding Spark Automotive equity): hit the daily limit

Semiconductor equipment companies (Spark suppliers): rose 6%

The entire technology sector was driven up, and the Shanghai Composite Index rose 1.5%.

Trending on the Chinese microblogging platform:

#SparkSpinOffListing#

#SevenSwordsDescendTheMountain#

#TenTrillionValuation#

Financial media rushed to publish articles:

”Financial Weekly”: Spark’s Spin-off, the Capital Coming-of-Age Ceremony of a Chinese Tech Giant

”Yicai”: The Embryo of a Ten-Trillion Empire, How Deep Is Su Chen’s Chess Game?

”Wall Street News”: Spark’s Spin-off May Be a Precautionary Measure Against America’s Sanctions

In retail investor forums, the discussion was even more heated:

”Spark Electronic IPO, I must win the lottery for new shares!”

”30% tradable shares, raising at least 600 billion, the biggest IPO in history.”

”The employee stock ownership plan is too tempting, I want to go work at Spark!”

At 2:00 PM, Su Chen accepted an exclusive interview with CCTV Finance in his office.

The reporter asked: ”Mr. Su, Spark Electronic’s listing is expected to raise over 600 billion. There are external doubts: is this just a cash grab?”

Su Chen faced the camera, his expression serious.

”First of all, Spark is not short of money. We have over 300 billion in cash on our books, and our debt ratio is less than 30%,” he said. ”The listing is not to grab cash, but for three things.”

He held up his fingers:

”First, let each business unit be valued independently. The chip business should be valued by the chip industry’s price-to-earnings ratio, and the automotive business should be valued by the automotive industry’s price-to-sales ratio. Mixing them together is unfair to every business.”

”Second, let employees share the dividends of the company’s growth. Spark Electronic’s employee stock ownership plan will cover all employees who have been with the company for at least one year. I hope that in the next ten years, Spark can produce ten thousand multi-millionaires—not through speculation, but through their own efforts and the company’s growth.”

”Third, accept public supervision. Public companies must disclose financial reports, hold shareholder meetings, and answer investors’ questions. This will force us to be more transparent and efficient.”

The reporter followed up: ”But after the spin-off, will the synergy be weakened? For example, will the chip department sell chips to the automotive department at a high price?”

”No,” Su Chen shook his head. ”We have an internal transfer pricing mechanism, settling at fair market prices. Moreover, even if listed independently, the seven companies are still controlled by the same controlling shareholder and are strategically unified.”

He paused: ”You can imagine Spark Holdings as the brain, and the seven subsidiaries as the limbs. The limbs are flexible individually, but they follow the brain’s commands.”

Before the interview ended, the reporter asked a personal question: ”Mr. Su, you personally hold 100% of Spark Holdings’ equity. After the spin-off, your net worth may exceed five trillion, making you the richest person in Asia, or even the world. What does this mean to you?”

Su Chen was silent for a few seconds.

”It means responsibility,” he said. ”Five trillion is not a number sitting in a bank; it is the rice bowls of 100,000 employees, the livelihood of hundreds of thousands of suppliers, and the expectations of the Chinese technology industry. If I only cared about personal wealth, I could have cashed out and left two years ago to travel the world.”

He looked out the window: ”But I chose to stay, I chose to keep striving. Because I believe that our generation has the opportunity to let Chinese technology stand at the pinnacle of the world. This goal is much more important than personal wealth.”

After the interview video was broadcast, #SuChenPerspective# jumped to the number one trending topic.

Some netizens commented:

”Others make money to enjoy life; Mr. Su makes money to change the world.”

”This is true entrepreneurship.”

”Is Spark still hiring? I don’t want a salary, just give me stock!”

Spark Internal · Employee Meeting

7:00 PM, Spark Shenzhen headquarters auditorium.

The auditorium that could seat 2,000 people was packed, and another 5,000 employees were watching the live stream online.

Su Chen stood on stage, not wearing a suit, but Spark’s work uniform—a dark blue jacket with the Spark logo embroidered on the left chest.

”Good evening, colleagues,” he began. ”Today, you all probably saw the news. Spark Electronic is going public, and many people have asked me: how much will the employees get?”

The audience held their breath.

”I’ll tell you the plan directly.” Su Chen pulled up a PPT.

Spark Electronic Technology Employee Stock Ownership Plan (ESOP)

Coverage: All regular employees who joined before March 31, 2017, and have worked for at least one year.

Allocation base: Job level coefficient × Tenure coefficient × Performance coefficient.

Subscription price: 80% of the IPO issue price.

Lock-up period: 12 months (locked for one year after listing).

Total amount: 3% of the total post-listing share capital (worth approximately 60 billion).

Specific example:

A P6 engineer, employed for two years, performance A, can get about 50,000 shares.

Calculated at an issue price of 200 yuan, the subscription price is 160 yuan, requiring a capital contribution of 800,000 yuan.

If the stock price rises to 300 yuan after listing, the paper profit is 1.4 million.

”800,000 is too much!” someone shouted from the audience. ”We can’t afford it!”

”The company will provide interest-free loans,” Su Chen said. ”Employees can apply for loans from the company to subscribe, to be paid off in five years, deducted from year-end bonuses. And—if an employee leaves, the company will repurchase the shares at market price, guaranteeing no losses.”

Thunderous applause.

”But this is just for Spark Electronic,” Su Chen continued. ”In the next three years, the other six companies will be listed one after another. Every listing will introduce an employee stock ownership plan.”

He switched the screen to show the logos of the seven companies.

”My goal is: by 2027, within the xinghuo system, there will be one thousand billionaires, ten thousand multi-millionaires, and one hundred thousand millionaires—not through demolition compensation, not through speculation, but through your own hands, creating technological value and sharing capital dividends.”

The audience completely erupted.

Young engineers stood up and cheered, while older employees wiped away tears.

A test engineer who had worked at Spark for three years said, choking up to the camera: ”When I jumped ship from a foreign company back then, my family was against it. They said Spark was a small company and unstable. Today... I want to say, I made the right choice.”

Another post-95s software engineer: ”I didn’t come for the money; I came to do something meaningful. But having money is even better!”

Su Chen concluded: ”Spark is not my company; it is everyone’s company. Listing is not the end, but a new starting point. Next, we will use ten years to accomplish three things.”

The big screen displayed:

Technological leadership: Achieve world number one in three tracks: semiconductors, artificial intelligence, and new energy.

Global influence: Overseas revenue accounting for over 50%, becoming a true multinational tech giant.

Industrial empowerment: Drive the upgrade of China’s entire technology industrial chain, cultivating one million high-end engineers.

”These three things cannot be done by me alone, nor by the management team,” Su Chen looked at the audience. ”They depend on you, on every Spark person who writes code, draws layouts, turns screws, and runs to clients.”

He raised his right hand and clenched his fist.

”Let us together ignite the Spark and illuminate the era.”

The whole audience stood up, and the applause lasted for five minutes.