Tang June fit Grand mobile games to sell the sun

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At the end of November this year, when the Royal Network (Nasdaq:snda) to the United States for the second financing, investors asked the President Tang June: for Shanda those unprofitable business, such as mobile phone game business, the Royal network will do?

The so-called mobile game business, mainly refers to Shanda's digital red and Actoz mobile gaming business. At that time, Tang June answered: "Before long, the royal network will be announced to properly deal with mobile phone game business decisions."

Recently, the source revealed to this newspaper: Shanda has been on its mobile phone game business has made a deal-will be a number of red and Actoz mobile phone game business sold to the Sunshine Group, packaged together for sale also includes the loss of the online game platform Hao Fang.

The source said: "The Royal Network will be in the United States time of Tuesday (19th), the sale of the news, the acquisition amount of tens of millions of dollars of magnitude."

Reporters immediately to a number of red Vice President Luninning, a grand spokesman Zhuge, two people in the telephone said: It is also inconvenient to make any comments on the above news.

Save 50 million dollars a year

A number of red, Hao Fang, Actoz, these three companies are grand at the expense of the purchase. But now, they not only do not make money, but need a grand flower "spare" to keep.

Shanda in 2004, two times to acquire a number of red all shares, digital red at that time is one of the largest mobile gaming companies, mainly based on Symbian, j2mm, Pocket, Linux and other platforms to develop mobile games, has been in Nokia, Motorola and other types of mobile phones pre-installed.

After the acquisition completed, several Red founder Wu Gang continued to serve as several red CEO. Wu Gang announced his departure this August. The source said that Wu gang left because of the two years since the Grand acquisition, Digital Red did not have a successful mobile phone game products launched.

Several red staff currently about 80 people, Jinshan Network company marketing Director Ke estimates, support such a large mobile phone research and development team, a year's operating costs between 10 million-20 million yuan.

Internet analyst Luebbe that although the mobile game has a good future, but there is no profit schedule, including digital red, the Sky, the Magic Dragon, including mobile phone game manufacturers are in a loss, China's 3G license issuance time is not long, which makes the lack of money grand lost confidence, and finally choose to sell.

Compared with digital red, Actoz is Hard-won. Actoz is a Korean game development company, before the listing, Shanda is Actoz in China's game agency, the two sides had a dispute over profit sharing. After the grand listing, acquired the Actoz company.

As for the Hao Fang, not a profitable company. The Grand 2004 acquisition of the Hao side online, the latter is already the world's largest online gaming platform. Hao Fang online revenue from two: one for advertising revenue, a VIP membership fee, the income of both the total of about 10 million yuan each year.

Ke analysis, from the operation of the scale of the game, online at least 1000 servers, the need for 1G bandwidth, plus staff costs, a year of operation needs at least 30 million yuan, the Hao side of the online deficit of at least 20 million yuan per year.

He believes that the sale of digital red, Hao Fang and Actoz mobile phone game business, Shanda can save 30 million-50 million yuan per year operating costs, but also can be from the hands of the sun tens of millions of dollars.

From expansion to contraction

After Tang June's financial roadshow to the US at the end of November, big Wall Street investment institutions have gained confidence and Shanda's share price soared 30% to more than $20. According to people familiar with the matter, Tang June in the United States is not a digital home, there is no mobile phone game of the new grand, that is, the Grand Slim plan won the recognition of investors.

May 2004, the Grand IPO financing 152.4 million dollars. Subsequently, through the issuance of convertible bonds to finance 275 million of dollars, plus the hands of the operation of funds, Shanda held close to 500 million U.S. dollars in cash.

Then, Grand founder Chen began to implement his "card position" strategy: in the future of possible business areas, even if the current do not make money, also take money to keep. Under the guidance of this strategy, Tian Bridge in addition to the network game layout (including the acquisition of Actoz Company), while in mobile games, digital home area layout.

In 2004 alone, Shanda acquired a total of more than 10 websites including Benthen, literature from the beginning, digital red and Hao Fang online. In February 2005, Chen Tianqiao acquired 19.5% of Sina's shares and became the biggest shareholder of Sina Net. In the field of digital home, Shanda also launched a grand Yeepay, grand box and other products.

Chen Tianqiao at that time described the ultimate goal is "online Disney": From a simple online gaming operators into a comprehensive digital entertainment service provider, whether from the computer screen, TV screen, mobile phone screen can see the contents of the grand operation.

"One day, Shanda starts to run movies from Hollywood, please don't be surprised." "The Grand network just came on the market, Chen accepted this reporter to interview."

Two years later, the Royal Network on the three fronts have been adjusted. For the desktop side of the game, due to the decline in the number of players, Shanda implemented a free strategy; in the digital home game, Shanda chose not to invest, quit the TV interface; Finally, Chen Tianqiao sells Hao Fang, digital red, exit the mobile phone interface.

Coping with the financial crisis

The sale of Hao Fang, digital Red, Actoz mobile gaming business, which is already a grand network in 2006 for the second time, the first time is to sell Sina shares.

November 7 This year, the Royal Network announced: the sale of the holding of Sina stock, planing to cost, net make 13 million dollars.

Luebbe analysis that the grand above behavior is to meet the impending maturity of the debt. October 15, 2004, Shanda has issued 200 million of dollars of interest-free first convertible bonds, as the underwriters in full implementation of its excess subscription rights, the final issue of the total increase to 275 million U.S. dollars. Starting October 15, 2007, investors have the right to demand a grand redemption of the bond.

When issuing bonds, the grand share price is about 40 dollars. Luebbe that if Shanda's share price still does not improve, most investors will not choose to convert the bond into a grand stock.

Luebbe to calculate a sum of account: Grand Current cash reserves of about 160 million U.S. dollars, plus the sale of Sina shares of 99 million U.S. dollars, Shanda cash reserves up to 260 million U.S. dollars, from convertible bonds issued a total of 275 million U.S. dollars still have a distance, the sale of several red, Hao and Actoz mobile phone business, set up now tens of millions of U.S. dollars, Help ease the debt crisis.

To maintain the day-to-day operation of the company, Shanda also needs about 100 million dollars in cash flow, the grand cash reserves are still missing.

Luebbe hope that the grand expectation is that the stock price rises, the share price is close to even more than 4 billion dollars, until October 15, 2007, some investors choose to convert the debt into the company stock, only some investors demand the cash, the big day will be better