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How was it key to his success? Is it because Tencent bought a minority share in the company after the company was already successful? Is any Chinese company ju

How was it key to his success? Is it because Tencent bought a minority share in the company after the company was already successful? Is any Chinese company just called "the Chinese government" now? Assuming he isn't the only shareholder and some of the others wanted out, would it have been much better to sell a minority share to venture capitalists instead of a Chinese gaming company (presumably for a worse price)? For a non-controlling interest why does it matter?

jiofih 7y ago
Not to corroborate the parent, but yes, every Chinese company is literally the Chinese government. Mandatory control stake.
- throwaway34241 7y ago
  Can you send a link or something about this mandatory control stake? I'm not saying you're wrong but I haven't heard of it before. Obviously Chinese companies are ultimately under the control of the Chinese government (and I suppose all companies are subject to governments, but being under an autocratic government without checks and balances is more problematic). My point was the GP comment is being extremely misleading. Not only was Epic already successful well before the investment, but I think there's plenty of more clear ways to refer to an investment from Tencent than how they stated it. Even if it's your opinion that Tencent and the government are the same organization (and not just subject to them), it would be better to add a few extra words to say so. IMO a non-controlling stock interest from a Chinese company actually seems a lot less problematic from a leverage perspective than doing business in China itself. Sure they could threaten to sell their non-controlling share to another investor, but I don't see how that would cause a real problem for Epic.
  - heartbeats 7y ago
    https://www.theguardian.com/world/2019/jul/25/china-business-xi-jinping-communist-party-state-private-enterprise-huawei https://www.theguardian.com/world/2019/jul/25/china-business... > In 2018, the securities regulator followed up by issuing a new corporate governance code requiring listed firms, at home and abroad, to include in their internal guidelines an expansive role for the party. Many Chinese companies listed in Hong Kong also wrote the party’s role into their articles of association. > In some ways, codifying in public documents the party’s role in managing companies was both an instance of rare transparency and part of an increasing trend of the party openly displaying its power. In the past, Chinese state-owned listed companies had customarily filed misleading prospectuses ahead of their stock exchange listings, omitting the party’s pivotal role in the hiring and firing of senior executives. [...] China doesn't have laws in the same way that we do. There, the model is that it's impossible to do business without violating the law, but the government might loosen up on enforcing it. If they feel like it, of course. Against this backdrop, providing explicit legislation is just an unnecessary encumberance.
heartbeats 7y ago
> Is any Chinese company just called "the Chinese government" now? There's no difference. As the country lacks rule of law, companies are direct subsidiaries of the government. As such, the only useful mental model is to treat it as an aggregate. Not "a Chinese citizen/company/organization did X," but "China did X".
- throwaway34241 7y ago
  I think that's a reasonable way of looking at things if you're thinking about how the Chinese government might use its leverage, but it's a an overly simplified way to describe selling some stock to Tencent.
  - heartbeats 7y ago
    No. Tencent = China, or in proper mathematical terms Tencent => China. Any sentence that has Tencent, you can substitute it for China and it will still be correct. He works for Tencent. He works for China. His company was purchased by Tencent. His company was purchased by China. Tencent operate the messaging app QQ. China operates the messaging app QQ.

jiofih 7y ago

Not to corroborate the parent, but yes, every Chinese company is literally the Chinese government. Mandatory control stake.

throwaway34241 7y ago
Can you send a link or something about this mandatory control stake? I'm not saying you're wrong but I haven't heard of it before. Obviously Chinese companies are ultimately under the control of the Chinese government (and I suppose all companies are subject to governments, but being under an autocratic government without checks and balances is more problematic). My point was the GP comment is being extremely misleading. Not only was Epic already successful well before the investment, but I think there's plenty of more clear ways to refer to an investment from Tencent than how they stated it. Even if it's your opinion that Tencent and the government are the same organization (and not just subject to them), it would be better to add a few extra words to say so. IMO a non-controlling stock interest from a Chinese company actually seems a lot less problematic from a leverage perspective than doing business in China itself. Sure they could threaten to sell their non-controlling share to another investor, but I don't see how that would cause a real problem for Epic.
- heartbeats 7y ago
  https://www.theguardian.com/world/2019/jul/25/china-business-xi-jinping-communist-party-state-private-enterprise-huawei https://www.theguardian.com/world/2019/jul/25/china-business... > In 2018, the securities regulator followed up by issuing a new corporate governance code requiring listed firms, at home and abroad, to include in their internal guidelines an expansive role for the party. Many Chinese companies listed in Hong Kong also wrote the party’s role into their articles of association. > In some ways, codifying in public documents the party’s role in managing companies was both an instance of rare transparency and part of an increasing trend of the party openly displaying its power. In the past, Chinese state-owned listed companies had customarily filed misleading prospectuses ahead of their stock exchange listings, omitting the party’s pivotal role in the hiring and firing of senior executives. [...] China doesn't have laws in the same way that we do. There, the model is that it's impossible to do business without violating the law, but the government might loosen up on enforcing it. If they feel like it, of course. Against this backdrop, providing explicit legislation is just an unnecessary encumberance.

heartbeats 7y ago

> Is any Chinese company just called "the Chinese government" now? There's no difference. As the country lacks rule of law, companies are direct subsidiaries of the government. As such, the only useful mental model is to treat it as an aggregate. Not "a Chinese citizen/company/organization did X," but "China did X".

throwaway34241 7y ago
I think that's a reasonable way of looking at things if you're thinking about how the Chinese government might use its leverage, but it's a an overly simplified way to describe selling some stock to Tencent.
- heartbeats 7y ago
  No. Tencent = China, or in proper mathematical terms Tencent => China. Any sentence that has Tencent, you can substitute it for China and it will still be correct. He works for Tencent. He works for China. His company was purchased by Tencent. His company was purchased by China. Tencent operate the messaging app QQ. China operates the messaging app QQ.