Takuya Nakayama looked at his father.
"Are you really willing to let go of power?"
"Why wouldn't I be?" Nakayama Hayao snorted. "Eri's due to give birth in a few months, and we'll have to help with the second child too. That boy Kazuki is being dragged to the TV station every day by that old rascal Nakagawa Jun. If I don't make time, this grandson of mine will end up changing his surname to Nakagawa."
Mentioning his father-in-law, Hayao's competitive spirit flared.
"From now on, I'll just be a figurehead on the Board of Directors—a mascot. If Nakagawa Jun dares to abuse his power as station manager to pull any shady tricks, I'll be in Setagaya every day picking Kazuki up and bringing him back to Haneda."
Takuya couldn't help but laugh at his father's grand retirement plan.
"Alright," Takuya nodded in agreement. "One or two years for the transition should be enough. I'll have the Legal and Human Resources departments work with you to prepare the necessary procedures. However, you'll still need to oversee major strategic decisions at the Board of Directors meetings."
"We'll see if I have the time," Hayao said, standing up and smoothing the hem of his housecoat. "Now, I need to check the courtyard to see if Kazuki's ball has smashed my potted plants."
The old man strode briskly out of the study.
Takuya Nakayama remained seated, staring at the empty doorway.
Sega's power transfer had been settled on a sunny morning, amidst a squabble between two old men over their grandson.
The next day, Takuya returned to Sega Headquarters.
He held a coffee mug in one hand and a few pages fresh from the fax machine in the other.
Though he'd felt relatively alert the previous morning, spending the day with Kazuki and the time difference had left him completely drained.
The jet lag headache still lingered, but the list of names on the paper jolted him awake.
In the United States, Netscape Corporation's IPO process seemed to have been put on fast-forward.
Soon, the phone on his desk rang—it was Frank, as expected.
He always faxed over what he needed to discuss before calling to clarify everything.
"Boss, you absolutely won't believe the traffic situation in Mountain View right now."
Frank's voice sounded hoarse, and the faint wail of sirens and the hubbub of voices could be heard in the background.
"What's happened? Has Silicon Valley's traffic system collapsed?"
"It's pretty much settled. Morgan Stanley has booked out the café at Netscape's office, and Hambrecht & Quist partners are working directly from the hotel lobby. They've assembled an underwriting syndicate of a full 26 investment banks."
Takuya Nakayama flipped through the faxed documents.
Morgan Stanley is leading the charge, with Hambrecht & Quist as the co-lead underwriter.
The rest of the list includes names like Bear Stearns, Merrill Lynch, and DLJ.
This isn't just an IPO; it's like Wall Street is having a corporate retreat.
"26 banks," Takuya Nakayama repeated the number.
"Right. George Fischer threw a mug in Goldman Sachs' office. Last week he was bragging about the commission from Silicon Valley Online, and this week he found out Morgan Stanley kicked him out of the Netscape deal."
Frank chuckled with a hint of schadenfreude over the phone.
"Morgan Stanley is going all out this time. They're offering Netscape a top-tier roadshow package, and Hambrecht & Quist is mobilizing all their tech resources. These guys are crazy. They think Netscape is the next Silicon Valley Online, even more valuable than we are."
Takuya Nakayama leaned back in his chair and spread the faxed documents across his desk.
The logic on Wall Street was simple to understand.
They had lost a round in the online pricing game with Silicon Valley Online, watching helplessly as SVOL surged 84% on its first day.
The pain of missing such an opportunity was more unbearable for investment bank elites than any financial loss.
So, when Netscape, another banner company bearing the "Internet" label, emerged, no one bothered to talk about risk control.
They wanted an entry ticket, even if it meant elbowing their way through the crowd to get one.
"Has Netscape's preliminary pricing been set?" Takuya Nakayama asked.
"Not finalized yet, but Morgan Stanley's whispers are between $12 and $14 per share, with an estimated market cap of around $500 million."
"Too conservative," Takuya Nakayama remarked.
"Conservative?"
"Just watch. Once the official roadshow begins, those 26 investment banks will inflate the price to absurd levels. Netscape's current profit is only $7 million, mostly from software licensing. Microsoft is undoubtedly developing its own browser. When Microsoft starts competing for market share, or even using the future of Windows to pressure Netscape, the company's days will be numbered."
Frank was silent for a few seconds.
"Boss, are you saying Netscape isn't as good as us?"
"From a business logic perspective, Silicon Valley Online has social stickiness and in-game item sales—real cash flow. Netscape has the portal advantage, but in the software world, price is always the killer app. However, Wall Street doesn't care about that right now. They just need a reason, a reason for the secondary market to go crazy buying."
Interestingly, the underwriting syndicate, composed of these 26 investment banks, covered almost all the major fund clients in the United States.
This meant that even before Netscape's stock went public, these giants had already reserved their allocations.
This was a classic "Red Shoe" strategy: using such a massive underwriting syndicate to ensure that on opening day, there would be no sellers—only frenzied buying.
The turbulent winds of the American Internet market were kept at bay behind the glass walls of Sega Headquarters.
The only remaining connections were Silicon Valley Online's steadily appreciating stake and Takuya Nakayama's DND online game plan, which he had tossed to Frank before leaving.
For the past two months, the sole focus of Sega's operations has been the first Los Angeles E3 Exhibition.
Oguchi Hisao pushed open the door to the Executive Managing Director's office.
"The floor plan for the Los Angeles Convention Center has been reviewed by the engineering department. The budget for the temporary ventilation upgrades in Kentia Hall on the basement level is 11% over budget." Oguchi Hisao slid the folder across the desk.
Takuya Nakayama glanced at the figures and quickly signed his name at the bottom with his pen. "Approve it. If the ventilation fails with thousands of people packed into the basement, it'll be chaos. The sales from merchandise will cover the upgrade costs."
Oguchi Hisao nodded and made a note.
"Tom from Sega of North America called this morning. DND licensing negotiations have begun. TSR Corporation's internal management is in disarray, and their bid is lower than expected."
"Exploiting a crisis is standard business practice. Have Tom extend the exclusive licensing period—a buyout would be ideal." Nakayama leaned back in his chair. "Delegate your non-core tasks to free up your time. Starting next week, you'll be taking over some of the cross-departmental coordination work I used to handle."
Oguchi Hisao paused, his pen hovering over the paper. "Sir, that's not how we do things."
"Rules change. Don't disappoint me." Nakayama stood up, patted Oguchi Hisao's shoulder, and draped his suit jacket over his arm. "I need to visit the CSK Group."
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