I am Hollywood

Chapter 1121: Chapter 1123: Reverse Authorization



[Chapter 1123: Reverse Authorization]

Although the specific split plan still needed further detailed discussions, Eric wasn't planning to hide this news.

On the contrary, he wanted to spread the word about Firefly Electronics' intention to divest the Fireflyer player business as soon as possible. This move could signal the external world that Firefly Electronics intended to spin off this business for an independent IPO, which might temporarily quiet down some forces making small moves behind the scenes.

Taking a glass of champagne from a waiter's tray, Eric got straight to the point with Larry Ellison: "I plan to separate the Fireflyer player business from Firefly Electronics soon and establish a dedicated subsidiary. We just discussed this issue in a meeting, which is why I'm a bit late."

Larry Ellison wasn't aware of the recent negotiations and power plays between Firefly Electronics and several major record labels. However, hearing this, he naturally thought of the increasingly heated NASDAQ market. Given the promotion speed and profitability of the Fireflyer player, if they pursued an IPO soon, it would surely achieve a high valuation.

"Eric, are you planning to let this subsidiary go public?"

Eric took a sip of champagne, waved over Christina, who was curiously peeking from a distance, and smiled at Larry. "We don't have any further plans yet. We'll separate the business first and see where it leads."

Larry watched as Eric affectionately patted Christina's head, the petite girl squinting her eyes with fluttering lashes, a look of enjoyment on her face. But he slightly grimaced, returning his focus to their discussion. "Eric, the NASDAQ has already peaked and could crash at any moment. If you let Firefly Electronics go public directly, you might still make it. But if you wait until the split is complete, you might miss this bull market."

"The Fireflyer player still has a lot of growth potential. If we miss this chance, we can wait a few more years."

The current annual sales of the Fireflyer player had just crossed 20 million units, but its market limit was far greater than that. Even if they missed this tech stock bull market, as long as the global sales of the Fireflyer player continued their current growth pace, delaying the IPO launch by two or three years could actually be more beneficial for Firefly Electronics.

...

Once Larry Ellison walked away, Eric looked at Christina, who was now clinging to him. He gently lifted her chin to examine her and said with a grin, "You've put on a bit of weight lately, haven't you? Been indulging yourself?"

Christina quickly defensively denied it, "Of course not, Eric! It's definitely your imagination."

Eric joked, "I don't care whether it's an imagination or not. But if you turn from a bottle sprite to a tub sprite, I might just ignore you."

The phrase 'bottle sprite' was one of the hit singles from Christina's recent debut album, which was also her breakout song. Since it was on his mind, Eric casually brought it up.

At that moment, the still svelte Christina clearly couldn't imagine herself as a tub sprite. A horrified expression flashed across her face as she lightly tugged Eric's arm, pouting in a cute and dissatisfied way, "That's never gonna happen! Eric, you really have a foul imagination."

Eric chuckled and changed the subject, "How has your first album been selling?"

"It's already topped 15 million copies," Christina said enthusiastically, but her smile quickly faded as she continued, "However, Mr. Weisz said that hitting 20 million is unlikely. It's probably going to settle around 18 million."

With the popularity she accumulated from her recent films in the MGM spy movie universe, along with the first impression edge of releasing an album ahead of Britney Spears, Christina could be considered the fastest rising teen pop singer in over a year.

"18 million is already impressive. Most artists don't break such high sales with their first album. Just put more heart into the next one, and you'll surely surpass 20 million."

As Eric spoke, he led Christina toward the buffet table. After a full four hours of meetings since the afternoon, he felt absolutely famished.

"Eric, could you give me some ideas for my next album?"

"Sure! But I don't have too much time, so I'll see if I can write a couple more songs for you."

...

Eric initially intended to return to Los Angeles the next day. However, due to the sudden decision to split the digital music player business, he would remain in San Francisco for a few more days to take part in the discussions about the split plan.

Meanwhile, the news of Firefly Electronics planning to separate the Fireflyer player business quickly spread, with the media immediately speculating about an IPO.

Although Firefly Electronics hadn't held an official press conference yet, various rumors had already confirmed this news, prompting an immediate response from the media and market. On the NASDAQ, the stock prices of other companies related to digital music players noticeably plummeted. Shares of component suppliers like Seagate, which provided micro-hard drives for the Fireflyer player, unsurprisingly reached new highs.

The upcoming subsidiary was simply named Fireflyer. During the initial registration of the Fireflyer trademark, Firefly Electronics had also registered this company simultaneously, so they could use it directly. 

Determining the detailed split plan, however, proved to be much more challenging.

For a whole week, everyone discussed incessantly during meetings. Juggling the promotion work for the upcoming film Iron Man, Eric felt overwhelmed.

...

Time flew quickly to April 20.

The Tokyo premiere of Iron Man would be in two days, and Eric needed to fly to Japan the next morning.

At Firefly Electronics headquarters, Eric was participating in the last high-level meeting before leaving San Francisco.

The separation plan between Fireflyer and its parent company, Firefly Electronics, focused primarily on two aspects: the division of technical patents and profit-sharing after the split. Summarizing it appeared simple, but many details required careful consideration.

Just the patent technical scheme distribution for the digital music player occupied the team for an entire week. High-level executives disagreed mainly on whether the complete patent technology package for the digital music player should be placed into Fireflyer.

In the conference room, Eric patiently listened to several senior executives' suggestions, deciding not to let this disagreement continue any further. "I agree with Victor's proposal; the digital music player patent technologies will remain with the parent company, and Fireflyer will obtain authorization by paying royalties to the parent company. As for the royalty fee ratio, you all need to come up with a plan for me as soon as possible."

Bill Olsen was among those favoring placing the patents in Fireflyer, and he replied, "Eric, if that's the case, we'll face a tricky issue. Fireflyer will need to continue developing new products for the Fireflyer player. How will we manage the patents developed by Fireflyer?"

Victor McNally interjected, "That's an easy problem to solve. Fireflyer will retain its own technology. After the split, Firefly Electronics will focus on tablet and phone products, and there won't be any issues with designing in this area."

"But what if the parent company's electronic products need to use technology developed by Fireflyer?"

"If needed, we can naturally obtain the authorization."

"This would be unfair to Fireflyer; if it goes public, investors are sure to have issues with this."

Noticing that the two were about to argue again, Eric interrupted. "Bill, I need you to recognize the primary issue here: for us, Firefly Electronics is the most important. Fireflyer is merely a shell we're divesting from in search of partners. As long as we confirm a specific profit-sharing plan in advance, any investors who join Fireflyer will just have to accept it or walk away. So, regarding the issue you mentioned, the solution is simple: Fireflyer's developed technologies will automatically grant Firefly Electronics reverse authorization. Of course, if Firefly Electronics applies these technologies to its own products, we will pay patent fees too. That's how it stands. I don't want to see further disputes; your focus should be on refining the separation plan. Is there any problem?"

After Eric finished, he scanned the now-silent conference room, and everyone fell quiet, so he nodded with satisfaction. "Then it's settled. I expect to see the specific plan when I return from London after the premiere of Iron Man."

...

By evening, the meetings for the day wrapped up, and everyone began leaving the conference room. Eric, however, didn't rise. Victor McNally and Bill Olsen both tacitly remained behind.

Eric quietly reviewed the meeting notes from that day before he looked up at the two, bluntly asking, "Have you two been having private disagreements?"

Recently, not only was there the issue of separating the digital music player patents, but Victor McNally and Bill Olsen had also been subtly at odds on various fronts.

"Eric, that's absolutely not the case. My disagreements with Bill are strictly about work."

"A conflict between the CEO and president on work issues is even worse for me as the owner."

Bill Olsen sensed Eric's displeasure and responded. "Eric, we can assure you that it won't affect our specific work."

"I don't see it that way," Eric chuckled, sitting up straight and looking at the two. "Let's break this down. Your disagreement boils down to the profit distribution between Fireflyer and Firefly Electronics. Bill, you lean toward Fireflyer; Victor, you firmly stand with Firefly Electronics. So I want to know why."

Victor McNally kept silent; he wasn't great with words as a technical executive. Despite being the CEO, he primarily focused on product development. Moreover, he was aware that Eric's personal stance was clearly on his side, which seemed to be enough for now.

Bill Olsen paused before speaking up. "Eric, I hope after the split I can exchange my shares for Fireflyer stock."

"Do you need money?"

Bill instinctively shook his head but felt the denial was weak, so he slightly nodded. "If possible, I'd like Fireflyer to go public quickly after the split."

Victor McNally and Bill Olsen had been with Firefly Electronics since its inception, but their pay wasn't particularly high. Eric had originally given them a starting salary of $300,000, which was only increased to $800,000 last year; this was already top-tier for a managerial position.

Of course, the primary income for top-tier managers came from bonuses and stock options, but in the first few years, their income in that area had been zero.

Only last year did they earn their first bonus due to Fireflyer's tremendous success. After Fireflyer's sales surpassed 20 million units the previous year, Bill Olsen and Victor McNally received even bigger bonuses at the beginning of the year -- both personally set by Eric at $20 million. Moreover, they also received close to $200 million in stock each.

So, hearing Bill Olsen say this disappointed Eric a bit.

"Bill, if you focus on the NASDAQ, you should understand that we can't possibly catch this bull market. Even if we barely manage to go public right before the NASDAQ crashes, your shares will still be under a year-long lockup period. So, no matter what, cashing out will be impossible."

"Eric, I completely understand that, and I never thought about cashing out quickly."

"Then that means," Eric interlaced his fingers on the conference table and leaned forward, "you want to increase your wealth, even if it's just on paper. Or do you think I've paid you too little?"

Bill Olsen fell into silence again.

Eric waited a moment, shaking his head. "If you genuinely believe that, I have nothing more to say. But you need to understand that just this year, I've given you $220 million, and the $200 million in stocks is just a conservative estimate based on a 10x price-to-earnings ratio. If Firefly Electronics goes public, at a 30x price-to-earnings ratio, that becomes $600 million. Tell me, which Silicon Valley executive could earn $600 million in a year?"

Bill Olsen slightly lowered his head, unable to meet Eric's gaze.

After a moment, Eric continued, "Maybe you feel that Eric Williams, a young punk, has $300 billion, and you only have $600 million. That's unfair; you should have at least $6 billion or $60 billion, right?"

"Eric, I never thought about it that way."

"Then stop overthinking," Eric emphasized, casting a stern glance at Bill Olsen. "I have never shortchanged anyone who works for me. In fact, I tend to give more than necessary. If you're still unsatisfied, you can tell me anytime. I can let you go to seek what you consider better opportunities."

"Eric, well, I'm sorry."

"Then it's settled," Eric stood up directly. "Get me the specific proposal as soon as possible. I hope to see a preliminary draft when I return from London."

With that, Eric left the conference room without looking back.

Victor McNally watched Eric's figure fade away before saying, "Bill, you shouldn't think that way."

"Sorry, Victor," Bill Olsen rubbed his forehead in defeat. "I've probably been too busy and stressed lately."

"You should know that Eric is even busier than us."

"Sorry."

"Let's go grab a drink; it's on me."

After hesitating, Bill Olsen nodded, then got to his feet. "Let me treat, actually."

"You should find a moment to call Eric."

"I will."

*****

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