I am Hollywood

[Chapter 1147: Change of Tactics]

Los Angeles International Airport.

Olivia had planned to return to London after staying at the Liberty City Manor for ten days. Eric originally wanted to send her back on his private jet, but their relationship had never been made public. Olivia worried that taking Eric's private plane would draw unwanted attention, so she opted for a commercial flight instead.

At 4 PM, standing by the floor-to-ceiling windows in the VIP lounge at Los Angeles International Airport, Eric watched as Olivia's flight rolled down the runway and ascended into the clouds before he turned away and left.

It was already May 21st, another Friday.

Though last week's incident had hurt quite a bit, it fortunately didn't cause any significant injury to the bone, and after resting for three or four days, Eric was mostly okay. Still, he had remained at home to "recuperate" for over a week.

This past week, the release of the Firefly Group's announcement about terminating cooperation with Blockbuster had stirred quite a buzz in Hollywood. Media outlets across North America and around the world were keeping a close eye on the dispute between Firefly and Viacom.

As expected, Sumner Redstone maintained his hardline stance, showing no signs of backing down throughout the week. After making accusations against Firefly on Monday, he left the public-facing work to other executives at Viacom.

[T/N: I just realized I have been using Summer Redstone instead of Sumner Redstone.]

However, despite Redstone's firm attitude, Viacom's stock price did not reflect the same level of confidence. During lunch with Olivia, Eric received a report on Viacom's stock price as of the close of the trading day on the East Coast.

After a significant drop on Monday, Viacom's stock price showed signs of tapering off in the following days, but for the week, the company's stock still suffered an overall decline of 23%, resulting in a staggering loss of $16.8 billion in market value.

As of today, Viacom's market capitalization plummeted to $56.3 billion from $73.1 billion just a week ago.

In a short span of a week, that loss was substantial. While Sumner Redstone himself could withstand such financial blows, other shareholders at Viacom might not share the same tolerance.

Thanks to a dual-class share structure, the Redstone family still controlled 56% of Viacom's voting rights at this time. Under normal circumstances, few could threaten the family's dominance over the company.

Yet, a dual-class structure had its limitations. If a major controlling shareholder could not address the problems facing the company for an extended period, significantly harming the interests of the majority of shareholders, outside shareholders could still convene an emergency meeting to vote on abolishing this structure and restructuring the board and management.

According to U.S. Securities Act regulations, it required a two-thirds majority of shareholders to abolish a dual-class structure.

After acquiring CBS, the Redstone family held only 13.5% of Viacom's stock through National Amusements. The remaining 86.5% was in the hands of institutions and the public. If Redstone persisted on his course of action and lost all support from outside shareholders, it wouldn't be too difficult for the other stakeholders to gather the necessary votes from that 86.5%.

Given that Viacom's market value had fallen by $16.8 billion this week, it had clearly strained the patience of much of its outside shareholders.

...

As Eric left the airport and entered the car with Caroline, who had also come to bid farewell to Olivia, he instructed the driver to head to Firefly Studios. Although it was nearing the end of the workday, he hadn't been to the office in over a week, so he figured it was a good time for a quick visit.

Once they merged onto Lincoln Boulevard outside the airport, Eric asked Caroline, "So, is there anything else I should know today?"

Even though he hadn't been working recently, the assistant's office had been sending him daily memos listing company matters that required his attention. This had always been Eric's management style; he wouldn't meddle in the specific decisions of each Firefly subsidiary, granting management plenty of autonomy while staying well-informed about the company's operations.

"Nokia's shell company reached an $8 million acquisition deal with NTP for their mobile email patent this morning; the contract should be signed next week. The Bourne Identity just finished its preliminary budget plan, with a proposed production cost of $70 million. The London office sent over a progress report for Harry Potter and the Sorcerer's Stone this afternoon, which will be in your email by tomorrow morning. Ronald Hill has filed a lawsuit against the founder of Hollywood Gossip, Adam Wimbrey. If he loses, Wimbrey could face at least five years in prison, and even if he relinquishes everything, he would still be liable for millions in damages."

Eric casually rested against his seat, and upon hearing Caroline mention the Hollywood Gossip situation, he interjected, "You can ignore that; just let Mary handle it."

Caroline pouted and blinked, seeming a bit annoyed. "Eric, I'm not a child."

"I know."

"And I'm not a porcelain doll."

"Of course," Eric chuckled, affectionately pinching her cheek. "You're a rag doll."

Caroline hunched her shoulders playfully, her cheeks flushing. "Eric, you're picking on me again."

"Well, sorry, I shouldn't be bullying little Carly," Eric said with false sincerity. "Now, continue."

Caroline desperately wanted to follow Merissa Mayer's suit and ignore Eric for a feigned period of time but ultimately couldn't help saying, "As of today's close, the Nasdaq index reached 3976 points and is expected to break 4000 next week. We've got news that the Tiger Fund has completely ceased its short-selling and is starting to buy tech stocks, but their capital has shrunk down to only $8 billion now."

Due to the recent wiretapping incident, the Firefly office had been closely monitoring the operations of the Tiger Fund since it had been implicated as one of the key culprits.

Compared to its peak two years ago, the Tiger Fund had seen its capital shrink by over half.

Hearing this, Eric couldn't help but shake his head slightly. If Julian Robertson decided to stop now, even with only $8 billion in capital, the Tiger Fund could continue to survive.

But now, it seemed he was following the trend and starting to invest in tech stocks, a clear indication that Robertson was trapped, like a gambler who had lost significant amounts of money and was losing their rationality, only thinking about recouping their losses. This gamble would only lead to disaster.

...

Since mid-March, the Nasdaq had climbed from 3000 points to nearly 4000 within a couple of months. If this trend continued, the index could reach 5000 points, as Eric recalled, at the latest by early August.

Moreover, July and August were the times when public companies began to announce their Q2 financial results for 1999. While these were not annual reports, if a large number of new tech companies reported significant losses, there was a high likelihood of a crash for an already-peaked Nasdaq index.

Of course, Eric couldn't be entirely certain.

The major tech companies that formed the backbone of the Nasdaq, such as Microsoft, Cisco, and Yahoo, were doing exceptionally well.

Microsoft, for example, had reported a net profit of $1.925 billion in the first quarter and was projected to see full-year profits soar to $8 billion -- nearly doubling last year's $4.5 billion earnings.

Cisco was North America's largest router manufacturer and could be considered the cornerstone supplier of the internet industry. While its market capitalization had been chasing Microsoft, its revenue performance was equally impressive.

However, no other tech giants could compete with Yahoo in terms of revenue growth.

To significantly enhance their traffic and visibility quickly, major tech companies had been spending heavily on advertising in recent months. As the world's largest online advertising platform, Yahoo had already significantly benefited from this surge in spending, generating $1.6 billion for the entire year last year.

This year, however, in just the first three months, countless internet companies had carelessly dropped over $700 million on advertising across Yahoo's various channels, holding over 70% of market share. Coupled with Yahoo Music Store, enterprise email services, Yahoopay interface licenses, and other revenue sources, Yahoo's revenue skyrocketed to $937 million in Q1.

It was expected that Yahoo's revenue for just the first two quarters would surpass their entire revenue of the previous year.

Overall, if Yahoo continued to grow as it had in the first quarter, their total revenue for 1999 could reach a staggering $4 billion. With such a massive income, the management could easily produce a net profit report in the hundreds of millions.

Of course, all of this was the most optimistic projection.

If the Nasdaq crashed, then Yahoo's rapid momentum would undoubtedly come to a halt.

Nevertheless, as the purest internet company in the new tech sector, Yahoo's exceptional revenue was likely to provide positive stimulation for the Nasdaq index.

On one hand, there were the rapid growth of the tech giants, and on the other, countless smaller internet companies suffering heavy losses. It was hard to imagine what might transpire in July and August when the Nasdaq index surged past 5000.

Thus, Eric had completely abandoned any predictions of the Nasdaq market for now. He simply planned to methodically sell off the stocks held in his Clover Fund and wait to see how it unfolded.

...

After working in his office at Firefly Studios until after 6 PM, Eric invited his two female assistants to dinner before returning to the Liberty City Manor.

As the black luxury Mercedes rolled through the gates of the estate on that moonlit night, Eric heard the driver relaying information from the estate's security, indicating that Elisabeth was already waiting in the villa.

Once inside, Eric quickly spotted Elisabeth lounging on the sofa against the wall, lazily holding a magazine.

Bending down, he kissed Elisabeth softly on the lips and asked with concern, "Have you eaten?"

"No," Elisabeth replied, sniffing habitually, her expression turning slightly forlorn. "If you hadn't come back tonight, I was just going to starve to death here and talk to you every evening from now on."

Eric chuckled, playfully pinching her chin. "That's just cruel; you didn't even tell me you were coming! What about Julia?"

Elisabeth pushed aside Eric's hand that had ventured towards her neck. "Isn't Erin Brockovich filming? She's been on set for a few days, staying in a town near Nevada."

"Oh, then let's go out for dinner."

"I don't want to go out; you make something for me."

"Alright," Eric nodded, pulling her up. "There's food in the kitchen; if you're too hungry, just grab a bite."

This time, Elisabeth didn't resist. She followed Eric to the kitchen, and together they sorted through the ingredients in the fridge, busy for a moment until she suddenly said, "Daddy wants me to break up with you."

As Eric cracked eggs into a bowl and started to stir, he replied, "You don't need to. Just tell him you and Julia are a couple."

"Do you want to see me get killed?"

"Isn't your brother doing just fine? Besides, your old man can't really take you on."

"You bastard," Elisabeth lightly hit Eric on the shoulder. "Daddy's got a girlfriend set up for Lachlan; they're getting married at the end of the year."

"I know a lot of top modeling agencies; how about I have them set up a bachelor party for Lachlan with a dozen male models? I guarantee they'll be the most stunning."

"Then my dad would really be mad at you," Elisabeth couldn't help but laugh, giving Eric a playful punch, but then she frowned and added, "And don't gloat; you might end up in the same position someday with a bunch of kids. Cindy Crawford is pregnant too, isn't she?"

Eric ignored Elisabeth's last comment, saying, "I actually planned to raise a bunch of unruly little brats and turn this world upside down. But Kevin, Elia, and Emma have all let me down lately; they show no potential for being little rascals," he said, turning to the young woman beside him. "So, I'm now leaving that difficult task to you."

Elisabeth's cheeks flushed as she realized it was pointless to tease him. "Well, if that's the case, I'd rather strangle him now."

"That's cruel. It looks like you're the only one who can bear the consequences."

Elisabeth tossed away the carrot she was holding and glared at Eric. "If you keep talking like that, I'm going to be downright outraged."

Eric paused his stirring, set the bowl down, and enveloped the young woman in a warm embrace, his tone softening. "Alright, I apologize. I know it's not fair to you."

Leaning her chin on Eric's shoulder, Elisabeth savored his hold and let her voice soften: "Finally, you've said something serious."

"I noticed you seemed a bit lost, so I thought I'd lighten the mood. Is it better now?"

"Mm."

"Good," Eric gently patted her back. "But the world is inherently unfair, so facing reality is essential."

"Eric."

"Yes?"

"I suddenly feel like biting someone."

"Oh... Ah!!!"

...

After a long, demanding night, and with Saturday dawn breaking bright, Eric still had no intention of getting out of bed, while Elisabeth cheerfully dashed to prepare breakfast early.

As he drifted in and out of sleep, the bedroom door suddenly swung open, and Elisabeth burst in, energetically patting Eric while switching on the wall-mounted TV with the remote. With a tone of mischief, she announced, "Eric, quickly watch the press conference from Viacom; your plans might be falling through!"

*****

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