Chapter Summaries

Zhao Chen planned to use leverage to buy Nvidia, but Lin Shicheng warned that excessive borrowing could make Era Vanguard vulnerable to a coordinated attack. Zhao Chen accepted a safer one-to-one leverage plan, and Lin began arranging diversified financing and staged purchases.

• Lin Shicheng reported Era Vanguard's Tesla and Apple holdings, its SpaceX stake, and $1.86 billion in available cash.
• Zhao Chen proposed keeping $200 million in reserve and using $1.68 billion, plus twice that amount in borrowing, to buy Nvidia.
• Lin Shicheng rejected the plan and warned that a highly leveraged Nvidia position could expose Era Vanguard to a market attack and forced liquidation.
• Zhao Chen agreed to borrow an amount equal to his $1.68 billion principal, creating a $3.36 billion position, and Lin accepted the risk level.
• Lin Shicheng said he would split the borrowed funds among four or five financing channels, and Zhao Chen instructed him to buy Nvidia below a $90 billion valuation in batches.

Zhao Chen weighed using Era Vanguard’s Tesla shares as collateral to expand its Nvidia position, but Su Wantang and Lin Shicheng warned him about the risks and SoftBank’s planned sale. He kept the original one-to-one leveraged buying plan, while leaving a possible Tesla pledge for later.

• Chen Xi suggested that Zhao Chen use the full $3.36 billion to buy Nvidia, and Zhao Chen proposed raising funds by pledging Era Vanguard’s Tesla shares.
• Su Wantang warned Zhao Chen that a simultaneous fall in Nvidia and Tesla could trigger a margin call and force him to sell.
• Lin Shicheng reported that SoftBank was considering selling its entire Nvidia stake, potentially adding heavy selling pressure in early 2019.
• Zhao Chen told Lin Shicheng to proceed with the original one-to-one leverage plan, spread financing across channels, and accumulate Nvidia shares below ninety billion.
• Su Wantang said she would unplug Zhao Chen’s office network cable if he insisted on pledging Tesla immediately, and Zhao Chen laughed before admitting he still intended to pledge the shares later.

Zhao Chen accepted Musk’s invitation to watch SpaceX’s Starworm test in Texas and heeded Musk’s warning about Wall Street and Nvidia. Before traveling, Zhao planned to meet Wang An in Beijing to negotiate Bubble Mary’s global rights to Mololoy and Labobo, and decided Zhiyi would not join him in Texas.

• Musk invited Zhao Chen to SpaceX’s Starworm test in Boca Chica and warned him that Wall Street viewed Era Vanguard as a threat, advising caution about buying Nvidia shares.
• Zhao Chen accepted the invitation and asked Su Wantang to arrange his trip to Texas.
• Zhao Chen told Su Wantang he would first visit Beijing to discuss a partnership with Wang An over the global rights to Mololoy and Labobo.
• Su Wantang reviewed Bubble Mary’s growth figures, and Zhao Chen explained that securing the IP partnership before its next funding round could transform its valuation.
• Zhao Chen asked Su Wantang to arrange a meeting with Wang An and prepare the copyright documents.
• Su Wantang asked whether Zhiyi should come to Texas, and Zhao Chen said she would not join him.

Zhao Chen visited Bubble Mary’s Beijing headquarters and reviewed its growing design operation and financial performance. The chapter left him considering the company’s rapid growth as its third-quarter results were presented.

• Chen Xi arranged a meeting between Zhao Chen and Wang An, who postponed his Shanghai trip to meet him in Beijing.
• Zhao Chen arrived in Beijing with Chen Xi and Zhang Qingxue, and Wang An warmly greeted them at the airport.
• Su Xiaotang showed Zhao Chen the expanded headquarters and explained that Bubble Mary had developed three Mololoy series for release the following year.
• Su Xiaotang gave Zhao Chen a Mololoy Journey to the West blind box as a keepsake.
• Zhou Zheng presented Bubble Mary’s financial results, including first-half revenue of 315 million yuan and net profit of 41.2 million yuan.

Zhao Chen praised Bubble Mary’s strong growth and proposed an exclusive global licensing partnership for Mololoy and Labobo. Wang An received draft agreements outlining the terms, with the specific revenue share still to be negotiated.

• Zhou Zheng and Su Xiaotang reported Bubble Mary’s rising revenue, store numbers, margins, membership, repeat purchases, and profits.
• Zhao Chen thanked Wang An and the Bubble Mary team for transforming the company into a platform capable of incubating IP.
• Wang An thanked Zhao Chen for investing in Bubble Mary and trusting its management without interfering.
• Zhao Chen proposed that Bubble Mary operate Mololoy and Labobo under ten-year exclusive global licenses, with Henglong receiving a share of product sales.
• Zhao Chen said Bubble Mary would manage the IPs’ development and promotion while Henglong retained veto rights over major licensing decisions and priority subscription rights in future funding rounds.
• Zhang Qingxue gave Wang An the draft agreements, and Wang An studied their covers without opening them.

Wang An proposed ways for Bubble Mary to secure long-term control of Mololoy and Labobo, but Zhao Chen explained why Henglong would not simply sell the copyrights for cash. Wang An then offered new Bubble Mart shares in exchange for the global copyright contracts, leaving Zhao Chen to consult Henglong’s board.

• Wang An asked Zhao Chen to extend the licenses for Mololoy and Labobo from ten years to twenty, then proposed that Bubble Mary buy the copyrights outright.
• Zhao Chen said Henglong’s board and shareholders would not favor selling valuable appreciating assets for cash, and Wang An recognized that Henglong wanted a better offer.
• Wang An proposed issuing new Bubble Mart shares exclusively to Henglong in exchange for the global copyright contracts.
• Zhou Zheng calculated that a 1.5 percent new issuance would raise Henglong’s stake from 26.3 percent to about 27.4 percent.
• Zhao Chen said he would discuss the proposal with the board, then assured Wang An that Henglong would remain Bubble Mary’s partner.

Zhao Chen and Chen Xi assessed Wang An’s proposal for Bubble Mary to exchange shares for Mololoy and Labobo’s copyrights, and Zhao Chen decided to support the deal because Wang An was committed to building the company’s own IP portfolio. At dinner, Wang An explained why he wanted full ownership of the IP, and Zhao Chen reaffirmed his belief in Bubble Mary, leaving Wang An visibly moved.

• Zhang Qingxue warned Zhao Chen about valuation and copyright-contract risks in Wang An’s share-swap proposal.
• Chen Xi concluded that the licensing and premium-purchase offers had been negotiating tactics to make the share swap seem like a compromise.
• Zhao Chen said Wang An’s commitment to owning Bubble Mary’s IP made him worth holding shares in long-term and told Su Wantang to prepare for a board meeting.
• At dinner, Wang An explained that Mololoy and Labobo had ranked highly in blind testing and that owning them would give Bubble Mary its first wholly owned super IP.
• Zhao Chen told Wang An he had invested because he believed Bubble Mary would become China’s designer toy giant, and Wang An was moved by his confidence.

Zhao Chen and Wang An discussed Bubble Mary's emotional appeal and future growth, then reached an understanding over its IP strategy. Wang An agreed to let Zhao Chen decide how to handle the IP and planned Labobo's first-quarter launch in Shan City next year.

• Zhao Chen and Wang An discussed how designer toys sell emotional value rather than plastic figures, and Wang An explained Bubble Mary's lasting connection with customers.
• Wang An described how Bubble Mary's characters could support future growth through licensing, content, and global expansion.
• Zhao Chen encouraged Wang An's ambitious vision, and Wang An agreed to let him decide whether to license the IP or issue additional shares.
• Wang An recognized that Zhao Chen had been checking whether their visions matched and trusted him not to take Mololoy and Labobo away.
• Wang An proposed holding Labobo's first-quarter launch in Shan City next year, and Zhao Chen agreed to welcome him in Chongqing.

Zhao Chen led Henglong Group's board in reviewing Bubble Mary's strong results and debating who should operate the Mololoy and Labobo IPs. The board agreed to license the IPs to Bubble Mary rather than develop them itself, and Zhao Chen raised a further question about operating the IPs themselves.

• Chen Xi presented Bubble Mary's first three quarters of 2018 results and its plans for Mololoy and Labobo.
• Shen Jue praised Zhao Chen's earlier purchase of Mololoy's overseas copyright.
• Zhang Qingxue explained the terms of Henglong's global copyright agreements for Mololoy and Labobo.
• Song Zhongping proposed that Henglong develop the IPs itself, while Xu Yong, Sun Zhengping, and Wu Hongyuan argued that Bubble Mary was better suited to operate them.
• Song Zhongping withdrew his proposal, and Zhao Chen decided Henglong would hand the IPs to Bubble Mary rather than develop them itself.

Henglong’s directors debated Wang An’s offer to acquire Mololoy and Labobo, and Chen Wei proposed licensing the IPs while leading Bubble Mary’s next funding round to increase Henglong’s stake above 30 percent. The directors supported her plan, but Zhang Qingxue questioned whether Wang An would accept it.

• Zhang Qingxue outlined Wang An’s options: a cash acquisition of Henglong’s two IP contracts or a share exchange offering a 1.5 percent stake.
• Shen Jue, Liu Mingyu, and Chen Xi argued that a 1.5 percent stake would undervalue the IPs and that Wang An might accept a larger investment from Henglong.
• Chen Wei proposed granting Bubble Mary a 20-year exclusive license to the Mololoy and Labobo global copyrights while Henglong retained legal ownership.
• Chen Wei suggested Henglong lead Bubble Mary’s next funding round, raising its stake from 26.3 percent to above 30 percent and securing anti-dilution protections.
• Shen Jue, Song Zhongping, Xu Yong, Sun Zhengping, and Wu Hongyuan supported Chen Wei’s plan, but Zhang Qingxue asked whether Wang An would accept it.

Zhang Qingxue argued that Henglong should transfer Mololoy and Labobo’s global copyrights to Bubble Mary in exchange for a 1.5 percent stake, then lead its next funding round under terms that protected Wang An’s control. The board supported the proposal and raised the need to resolve the copyrights’ ownership and transfer requirements before negotiations proceeded.

• Zhang Qingxue warned that Wang An would likely reject a twenty-year license because Henglong would retain ownership and could later change the terms.
• Zhang Qingxue proposed transferring the global copyrights to Bubble Mary for a 1.5 percent stake, with Henglong leading the next funding round and allowing its post-investment stake to exceed thirty percent.
• Zhang Qingxue proposed that Henglong give up voting rights, take two board seats, and receive anti-dilution protection in future funding rounds.
• Song Zhongping and Xu Yong endorsed Zhang Qingxue’s proposal as a way to build trust and secure a long-term stake in Bubble Mary.
• Sun Zhengping warned that Henglong needed to clarify Wang Xin’s and Long Xiangsheng’s copyright arrangements and proposed bringing them together with Henglong.
• Wu Hongyuan assessed the deal as a short-term paper loss that could secure Henglong a controlling position in a high-growth company.

Henglong’s board approved Zhang Qingxue’s plan to trade IP for equity while tying the transfer to Henglong leading Bubble Mary’s next funding round. As Zhang prepared to negotiate with Wang An, Zhao Chen finalized his own trip to the United States with Su Wantang.

• Zhang Qingxue proposed signing the IP transfer agreement and the lead-investor letter of intent simultaneously, with the transfer conditional on Henglong leading Bubble Mary’s next funding round.
• Zhao Chen approved exchanging the IP for 1.5 percent equity, having Henglong lead the next funding round while waiving voting rights, and appointing Zhang Qingxue and Chen Wei to the board; he also required the IP’s chain of title to be cleared.
• Shen Jue praised Henglong’s decision-making process, and Zhao Chen told Su Wantang that Zhang’s plan focused on closing the deal rather than merely maximizing the IP’s value.
• Wang Xin’s Side agreed to discuss transferring the Mololoy copyright, while Long Xiangsheng raised no objection to transferring Labobo’s global license if the procedures were proper.
• Zhao Chen assigned Zhang Qingxue to lead negotiations with Wang An, with Chen Xi supporting her, and required the chain-of-title documents and agreements to be signed simultaneously.
• Zhao Chen decided to travel to the United States with Su Wantang, leaving Zhang Qingxue in China to handle Bubble Mary’s negotiations.

Zhao Chen traveled with Su Wantang to Texas to watch SpaceX’s Starworm tethered test, while wondering whether Musk’s invitation had a purpose beyond the launch. After meeting Lin Shicheng in Houston, they reached Brownsville, where they prepared to visit the launch site the next morning.

• Su Wantang packed Zhao Chen’s clothes and discussed their arrangements for reaching the Starworm test site in Boca Chica.
• Zhao Chen told Su Wantang he feared he would never stop wanting more, and she promised to follow him however far he went.
• Zhao Chen and Su Wantang met Lin Shicheng at Houston’s airport, and he told them the tethered test was scheduled for December fifteenth and that Musk had invited other investors and former NASA officials.
• Lin Shicheng flew Zhao Chen and Su Wantang to Brownsville and drove them toward Boca Chica, where Zhao Chen explained why SpaceX tested rockets in the remote area.
• Lin Shicheng checked them into a Brownsville hotel and told Zhao Chen that Musk’s people would meet them at the launch site at ten the next morning.

Zhao Chen visited SpaceX’s Boca Chica Launch Site and discussed the company’s funding and Starlink plans with Elon Musk. He also assessed Tesla’s improving finances and warned that Q4 delivery figures could fall short of expectations, while arguing that the company’s underlying progress mattered more.

• Zhao Chen arrived at the Launch Site, where Elon Musk was inspecting a Raptor engine ahead of a test.
• Zhao Chen confirmed that Era Vanguard would lead SpaceX’s funding round with $300 million and described Starlink’s potential value.
• Zhao Chen recited Tesla’s Q3 financial results and explained why he considered its profit evidence of a stronger core business.
• Musk shared Tesla’s Q4 targets and said Model 3 production costs were continuing to fall.
• Zhao Chen predicted that Q4 deliveries might miss market expectations, but said Tesla’s margins, cash flow, and Shanghai factory progress mattered more.

Zhao Chen visited SpaceX’s Boca Chica launch site with Elon Musk, then flew to New York to discuss expanding Era Vanguard’s Nvidia position. He directed Lin Shicheng to use Tesla shares as collateral for gradual purchases while managing the risks and waiting for SoftBank’s Nvidia exit to pressure the stock.

• Elon Musk showed Zhao Chen Starworm and explained SpaceX’s low-cost approach to failure and rapid iteration.
• Zhao Chen decided to leave for New York with Su Wantang and Lin Shicheng before returning for Starworm’s launch in three days.
• Lin Shicheng reported that Era Vanguard had invested $3.36 billion to acquire 22 million Nvidia shares, about 3.64 percent of the company.
• Zhao Chen ordered a larger Nvidia position and proposed pledging Era Vanguard’s Tesla shares to fund additional purchases.
• Lin Shicheng warned that a Tesla price drop could trigger collateral calls and forced sales, potentially affecting Era Vanguard’s holdings and SpaceX funding.
• Zhao Chen ordered the Tesla pledge to begin at 25 percent in batches, kept pledged shares below half, and slowed Nvidia buying until SoftBank’s selling pressure passed.

Zhao Chen proposed using pledged Tesla shares and additional leverage to build Era Vanguard’s Nvidia position beyond 10 percent, despite Lin Shicheng’s warnings about legal, financial, and regulatory risks. Zhao Chen acknowledged the dangers but decided to cross the line because he believed Nvidia’s future gains would be extraordinary.

• Zhao Chen proposed pledging Tesla shares and borrowing against them to invest up to nine billion dollars in Nvidia.
• Lin Shicheng warned that the plan could push Era Vanguard’s Nvidia holdings above 10 percent and trigger extensive disclosure and insider-reporting requirements.
• Lin Shicheng explained that short-swing profits could be clawed back and that a sharp Nvidia decline could cause massive losses, financing pressure, and margin calls.
• Su Wantang listened silently as Lin Shicheng laid out the risks and Zhao Chen considered his proposal.
• Zhao Chen said he understood the risks but would cross the 10 percent line because he expected Nvidia’s future gains to exceed even the highest estimate.

Zhao Chen and Lin Shicheng agreed on a staged, leveraged plan for Era Vanguard to exceed ten percent ownership of Nvidia, accepting the regulatory attention and market risk. The chapter ended with Zhao Chen deciding Era Vanguard would step into public view when its required SEC filing revealed its position.

• Zhao Chen told Lin Shicheng he wanted Era Vanguard to become a major Nvidia shareholder and accept the costs of crossing the ten-percent threshold.
• Lin Shicheng set three conditions: stagger purchases, cap leverage at one-to-one, and draft a Schedule 13D that described Era Vanguard as a long-term strategic investor.
• Zhao Chen agreed to the conditions, and Lin Shicheng recorded a plan involving three billion dollars in principal and three billion dollars in leverage.
• Zhao Chen laid out three purchase batches timed around SoftBank's Nvidia share sales, with reserve funds for a further price decline.
• Lin Shicheng warned Zhao Chen that crossing ten percent would require a Schedule 13D filing and make Era Vanguard's holdings public.
• Zhao Chen replied, "Then we surface."

Zhao Chen and Lin Shicheng arranged the first pledge of Era Vanguard’s Tesla shares to finance a $1.2 billion Nvidia purchase as SoftBank prepared to exit. Zhao Chen ordered the buying to begin and proposed acquiring SoftBank’s Nvidia stake directly, leaving Lin Shicheng to consider the idea.

• Lin Shicheng told Zhao Chen they had agreed to pledge about 3.32 million Era Vanguard Tesla shares for $600 million, with plans to add matching leverage.
• Lin Shicheng outlined staggered financing rounds through several banks and a plan to buy Nvidia shares gradually using hundreds of smaller orders.
• Lin Shicheng reported that Masayoshi Son was likely to liquidate SoftBank’s 4.9 percent Nvidia stake before January, potentially deepening the stock’s decline.
• Zhao Chen told Lin Shicheng to put the first $1.2 billion into Nvidia that day and buy shares left behind by SoftBank.
• Zhao Chen asked Lin Shicheng whether Era Vanguard could purchase SoftBank’s Nvidia stake directly, and Lin Shicheng did not answer immediately.

Lin Shicheng explained why Era Vanguard could not privately acquire SoftBank’s Nvidia shares without inviting SEC scrutiny and financial disadvantages for both sides. Zhao Chen chose to keep buying in batches on the public market, while Lin left wondering what Zhao’s confidence in Nvidia was based on.

• Lin Shicheng warned Zhao Chen that a private transfer of SoftBank’s 4.9 percent Nvidia stake would require SEC filings and expose Era Vanguard to scrutiny over its investment intentions.
• Lin Shicheng explained that the transfer could lead the SEC to treat Era Vanguard and SoftBank as a group, potentially counting their holdings together and pushing them above ten percent.
• Lin Shicheng said SoftBank would likely earn more by selling through public-market trades than by negotiating a fixed private-transfer price.
• Zhao Chen agreed to proceed with Era Vanguard’s original plan to accumulate shares gradually while SoftBank sold over two to three weeks.
• At the door, Lin Shicheng asked what Zhao Chen’s judgment of Nvidia was based on, and Zhao replied that he saw a little further ahead than most people.

Zhao Chen continued Era Vanguard’s aggressive Nvidia accumulation while confirming the firm’s planned investment in Starworm. With the next purchases poised to make Era Vanguard Nvidia’s largest institutional shareholder, he told Su Wantang that the position was only a beginning.

• Zhao Chen told Elon Musk that Era Vanguard’s $300 million investment would arrive before the end of the month, and Musk guessed Zhao was secretly buying Nvidia shares.
• Lin Shicheng reported that Era Vanguard had invested its first $1.2 billion tranche, bringing its Nvidia holdings to about 29 million shares, or 4.8 percent.
• Zhao Chen ordered the second tranche deployed during SoftBank’s heaviest selling and set a goal of reaching a ten-percent stake when Masayoshi Son finished liquidating.
• Lin Shicheng said the planned purchases could make Era Vanguard Nvidia’s largest institutional shareholder, with a stake above ten percent and an SEC Schedule 13D filing.
• Zhao Chen told Su Wantang that becoming Nvidia’s largest institutional shareholder was not the finish line, as Era Vanguard planned to keep growing and pursue future opportunities including SpaceX.