"Then go to HSR. You will have to face an antitrust investigation sooner or later."
He said, "Waiting for 30 days is not a problem. As long as the antitrust investigation is passed, the 13D filing will be a procedural matter."
Lin Shicheng wrote a line of words in the notebook and then put the pen down.
"Zhao Zong, the above mentioned are all reporting obligations at the federal level.
There is another layer of risk that is easily overlooked. I must make it clear to you in advance - Nvidia is a company registered by Delaware.
Delaware General Corporation Law has a clause that any shareholder holds more than 15% of the shares,
Business Combination cannot be carried out without the approval of Board of Directors, even if the shareholding exceeds 50%.
In other words, after exceeding 15%, Board of Directors will have many more cards than now.
If Huang Renxun and Board of Directors think we are friendly, this clause will be in vain.
If they think we're unfriendly - this clause alone is enough to hold us back for a long time."
Zhao Chen's fingers slowly circled around the edge of the teacup.
Delaware General Corporation Law. Fifteen percent. Business Combination limit.
These are not SEC rules, but state law rules, which are written in the laws of the place where Nvidia company is registered.
SEC governs the trading order of the securities market, and Delaware governs the basic rules of corporate governance. Two lines, two dimensions.
"But Zhao Zong, there is one thing - SoftBank clearance is the direct prerequisite for us to get this position quickly.
All 4.9% of the shares held by Masayoshi Son were sold in Secondary Market from December last year to early January this year, and we took over a considerable part of them.
If SoftBank is still sitting on Shareholder Register of Nvidia, it would be almost impossible for us to build it from scratch to more than 10% in less than two months.
SoftBank cleared its position. Judging from the results, it cleared a position for Era Vanguard."
Zhao Chen leaned on the back of the sofa and put the tea cup on the coffee table.
Before SoftBank was cleared, on Nvidia's Shareholder Register, Vanguard was about 7.7%, BlackRock 7.1%, SoftBank 4.9%, Fidelity 6.1%, State Street 4%.
After SoftBank cleared its position, the 4.9% shares were dispersed to Secondary Market.
Era Vanguard picked up part of it, and the remaining part was picked up by other institutions.
But no matter who takes over, after SoftBank is eliminated, Era Vanguard becomes the largest institutional shareholder of Nvidia with a 10.8% shareholding. There is no longer any suspense in Shareholder Register.
"I know the path to Lawyer Lin, Add Position. But there is another thing I need to know."
His eyes returned from the window and fell on Lin Shicheng's face,
"Huang Renxun and Nvidia Board of Directors, how will they react to the fact that Era Vanguard holds more than 15% of the shares?
If they react strongly, will the follow-up Add Position be affected?"
Lin Shicheng leaned back on the sofa and tapped his fingers on the armrest of the sofa twice.
This issue obviously made him more cautious than HSR and 13D.
"Zhao Zong, Nvidia's Equity Structure are extremely dispersed, and Huang Renxun's own shareholding is only about 3.5%.
At the beginning, Major Shareholder Vanguard was only 7.7%, and BlackRock was just over 7%.
Before Era Vanguard filed its 13D, no single outside institution held more than 10% of the shares."
He quickly drew a table on his notebook.
"Huang Renxun has a very tough attitude towards all external shareholders and activist investors who try to interfere with his business decisions throughout Nvidia's history.
He insists on 'Engineer-Led Management' and lacks basic patience for capital parties who do not understand technology.
But that doesn't mean he's hostile to all outside shareholders.
The shareholding ratios of Vanguard and BlackRock are both high, and Huang Renxun has never expressed dissatisfaction with their existence--
Because these two are passive index funds, any decision made by the management, Vanguard and BlackRock will vote according to the management's recommendations.
The shareholding ratio of external shareholders is not a sensitive point for Huang Renxun, but 'whether it interferes with operations' is."
He wrote a line in his notebook -
"Do not interfere in management. Do not seek control. Do not ask for Board of Directors Seat."
"Era Vanguard The current 13D wording clearly states these three points.
As long as we continue to follow this tone, Huang Renxun's attitude will most likely be neutral to positive.
The share price of Nvidia has dropped from 292 US Dollar in October last year to more than 140 US Dollar now, a loss of nearly half.
In this position, having a long-term strategic investor willing to step up and support the company with real money is not a bad thing for any CEO."
Zhao Chen nodded and his eyes fell on the Equity Structure table drawn by Lin Shicheng.
"But if Era Vanguard holds more than 15% of the shares, and all public statements and Schedule 13D Amendment Filing maintain the tone of 'non-interference in management' - what will Huang Renxun think?"
Lin Shicheng's pen tip paused at the fifteen percent mark.
"He will wait and see." Lin Shicheng raised his head,
"The market value of Nvidia is now about 87 billion US Dollar. The corresponding increase from Add Position to 15% is about 3.5 billion US Dollar.
When funds of this scale enter, Huang Renxun will definitely notice it.
But his reaction depends largely on Nvidia's Fundamentals and stock price performance at that time.
If the stock price of Nvidia is still at a low level, the growth potential of Data Center has not been fully priced by the market.
The persistence of Era Vanguard and Add Position will be interpreted as a long-term investor who understands technology is firmly bullish at the bottom.
Huang Renxun never dislikes this kind of shareholder."
He paused.
"But if the stock price of Nvidia has begun to rise, and Era Vanguard and Add Position occur in the rising channel, the market interpretation will be different--
Speculative funds chase short-term gains, and the SEC will focus on examining whether the purpose of holding shares in Schedule 13D Amendment Filing is consistent with the initial declaration.
Huang Renxun I will also be wary."
Zhao Chen put down the tea cup and did not continue the topic of HSR.
He turned his head and looked at Su Wantang sitting on the other side of the sofa:
"Wantang, go and call Chen Xi and Zhang Qingxue."
Su Wantang didn't ask any more questions, stood up and walked out Suite.
Lin Shicheng put down the pen, leaned back on the sofa, and stopped for a moment on Zhao Chen's face.
He didn't ask, because he already heard something from Zhao Chen's tone--
It's not hesitation, it's the calmness of getting ready to make a move after all the clues have been sorted out.
Chen Xi and Zhang Qingxue came in quickly.
They sat down on the sofa, and their eyes fell on the back of the SEC inquiry letter on the coffee table, which was covered with tick marks Lin Shicheng.
Seeing this, the two women knew something in their minds.
Since Lin Shicheng didn't leave, calling them over must have been about Nvidia.
Nvidia is currently the stock with the largest position in Era Vanguard. Its importance exceeds that of Tesla.