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*****
"Thirty-one thousand, five hundred and seventy-six shares purchased in October 1996 at an average of exactly nineteen dollars. Adjusted for the February 1998 two-for-one split, you now securely hold sixty-three thousand, one hundred and fifty-two shares. The final closing price on December thirty-first, 1998, was two hundred and forty dollars per share."
"Fifteen million, one hundred and fifty-six thousand, four hundred and eighty dollars," Marvin recited the math instantly.
"Correct." Andrew made a small, nervous checkmark on his own copy of the document. "Now, the options program. Original deployed capital of four hundred thousand dollars, deployed in October 1996. Continuously, aggressively reinvested through twenty-six months across overlapping three-month and six-month call structures. The compounding—"
Andrew paused, briefly, taking a slow breath. It was the pause of a man who practiced this exact sentence in the mirror and was now delivering it. "—the compounding across twenty-six consecutive, highly profitable cycles, safely adjusting for the premium decay and the carry costs on each tenor, has successfully produced a current live options book value of—"
"Just tell me the number, Andrew," Marvin said. His voice was entirely devoid of anticipation.
"The live calls—the leveraged positions currently open, which have January and April expiries—are officially marked at approximately two hundred and forty-one million dollars. That is the current mark-to-market value of the open positions. The realized gains from the closed cycles across the twenty-six months—the actual, liquid cash cycled completely through the program and now either sitting in the current options book or resting safely as the margin base—total approximately four hundred and sixty-eight million dollars."
A silence descended on the office.
The mockingbird outside moved on to a new, screeching sequence. From somewhere further down the canyon road, a car engine started and then slowly receded into the distance.
"And the additional twenty million injection?" Marvin asked, breaking the quiet.
"It is fully included in those figures. The twenty million entered the program in October and November of 1997 across five subsequent cycles. Its compounded value, given *Yahoo!'s* insane 1998 performance, accounts for a highly significant portion of the live options book."
Andrew paused, shaking his head. "The word 'significant' is doing a hell of a lot of work in that sentence. Three hundred and eighty-seven million dollars, to be precise, of the current live book value traces back entirely to that single injection."
Marvin reached out, picked up the summary sheet, and looked at it properly.
**SCARLET CAPITALS — YAHOO! PROGRAM SUMMARY**
**As of December 31, 1998**
* **Equity Position (63,152 shares @ $240):** $15,156,480
* **Live Options Book (January + April expiries, MTM):** $241,000,000
* **Realised Options Gains (closed cycles, net of costs):** $468,000,000
* **Total Program Value (Equity + Live Options + Realised):** $724,156,480
He set the sheet gently back down on the desk, aligning it perfectly with the edge of the wood.
Seven hundred and twenty-four million dollars.
This came from an original deployment of approximately one million dollars back in October 1996—$599,950 in equity and $400,000 in options, totaling $999,950. Plus a subsequent injection of twenty million in late 1997, and a further injection of approximately eighteen million from the Asian crisis program redeployment in mid-1998.
Total capital deployed across the entire program's full history: approximately forty million dollars.
Current total program value: seven hundred and twenty-four million dollars.
"The January expiry," Marvin said, his eyes scanning the numbers. "What is the exact strike price on the live calls?"
"The January calls are struck at two-twenty split-adjusted," Andrew replied. "Current spot is two-forty. The intrinsic value on the January book is a comfortable twenty dollars per share. The total January position, if the stock simply closes at or safely above two-twenty at expiry—which, at current prices and momentum, is effectively certain—settles at approximately eighty-seven million dollars."
"And the April calls?"
"Struck exactly at two-forty. Right at-the-money at the current spot price. The April book acts as the larger of the two positions—approximately a hundred and fifty-four million dollars in mark-to-market value. The thesis relying on the April calls demands *Yahoo!* continue its ascent through the first quarter of 1999. The calls need the stock to move above two-forty on a sustained, daily basis before expiry."
"The stock will climb well above three hundred dollars by April," Marvin said.
He didn't offer a hopeful prediction. He stated concrete information.
Andrew looked at him. Over the last two years, he experienced varying versions of this exact scenario—the unnerving experience of Marvin making casual statements about future market prices with the matter-of-fact confidence of someone reading tomorrow's newspaper.
Andrew hadn't adjusted to the terror of it.
"If that holds true," Andrew said, choosing his words carefully, "the April book settles at approximately—"
"More than double the current mark-to-market," Marvin finished. "Close to three hundred and fifty million on the April position alone."
"Which would bring the total program value, on fully settled positions, well in excess of—"
"Nine hundred million," Marvin said. "Before we even factor in the core equity."
Andrew slowly set down his pen. He took a shaky breath.
"You will hold north of nine hundred million dollars in cash sitting in the *Yahoo!* program alone," Andrew said, his voice barely above a whisper. "By April of 1999."
"If the thesis holds," Marvin allowed a tiny concession.
"Marvin, the thesis held flawlessly for twenty-six consecutive months."
"It will hold for three more," Marvin stated firmly. "And then... I need a different conversation with you."
Andrew frowned. His brow furrowed. "What conversation?"
Marvin looked back out the window. The grey marine layer finally thinned out. The morning light found its way through the clouds. The canyon walls brightened from a dull grey to pale, harsh gold.
He thought deeply about the Nasdaq index currently sitting at 2,300. He thought about the insane, vertical trajectory it rode, and the explosive terminal velocity it would eventually reach. He thought about the infamous date—not the vague month, not the quarter, but the exact *date*—when it would suddenly stop going up.
He thought about what happens to tech companies priced entirely on the euphoric assumption of infinite growth when they suddenly face a furious, panic-stricken market deciding to care about actual revenue and earnings again on one ordinary Tuesday morning in March of the year 2000.
"The conversation about what happens when a thesis officially concludes," Marvin said softly. His eyes reflected the morning sun.
"The exit strategy."
---
The array of entertainment royalty payments arrived at the estate since the autumn of 1997 with the irregular cumulative rhythm of rain in a good monsoon season. Not constant, not predictable on any date, but reliable in aggregate, and always significantly larger than previous accounting suggested.
The finalized accounting ran to eleven pages when Amy compiled it for Marvin's comprehensive year-end review in the first week of January 1999.
Marvin read it cover to cover on the morning of January 8th. He sat with a second glass of milk and applied laser-focused attention. He tracked the underlying numbers in his head, but these final consolidated forms always contained some small element of surprise. It wasn't surprising in the general direction, which he already knew, but in the magnitude, which even his mind could not always perfectly predict to the exact decimal.
The *Kung Fu Panda* book sold approximately seven million, two hundred thousand copies worldwide across its massive first printing, emergency second printing, and two subsequent global printings.
The tidal wave of *Titanic* promotional hype placed Marvin Meyers's name in front of a global audience. Incredibly, it sold consistently, moving around 1,000 copies every single week in bookstores. The publisher raised the retail price from $16.99 to $18.99 for the third and fourth printings. At his negotiated fifteen percent royalty cut, the royalty stream compounded well past the initial, optimistic calculations.
*Total book royalties received through the third installment cheque on December 31st, 1998: **$17,200,000.***
*Ready Player One* saw its sales slow down slightly after the initial rush, but still steadily moved over 5,000 copies every week in the US alone. It sold over eight million, five hundred thousand copies by the end of 1998. The retail price raised from $17.99 to $18.99. At his staggering eighteen percent royalty cut, the revenue stream compounded massively over its lifespan.
*Second installment cheque December 31st, 1998: **$16,900,000.***
*The Parent Trap* finished its incredibly lucrative global theatrical run.
*Theatrical Participation (Final Installments 1998): **$5,655,000.***
*Total film participation received from Disney: **$13,400,000.***
The home video release of the film—on both DVD and VHS—triggered a lucrative participation calculation under a slightly different rate structure Marvin's attorneys and agent negotiated with foresight. The home video royalties through year-end 1998 added a massive further windfall.
*Home Video/Ancillary Royalties (to Dec 31, 1998): **$7,800,000.***
The *Marvin 1* EP did not stop selling.
This terrifying fact about the EP continued to genuinely surprise even the most veteran Columbia executives who licensed it. It wasn't just the initial platinum certification, achievable in two months for a well-promoted debut by a known name. It proved the sustained, unstoppable velocity of the back catalogue. It long since achieved Diamond certification, moving a further 1.2 million units in late 1998 alone, nearly two full years after its initial release. The continued prominence of Marvin's name across the global entertainment landscape and the masterful quality of the debut EP drove this. Genuine listeners kept returning to it and recommending it to others.
*Fourth installment of album royalties through December 31st, 1998: **$22,800,000.***
Finally, the "My Heart Will Go On" revenue arrived in overlapping tranches from multiple global sources. It possessed the labyrinthine complexity appropriate to a song appearing simultaneously on the highest-grossing *Titanic* soundtrack, as a standalone single distributed globally through Cheiron's infrastructure, and as the source of endless mechanical royalty streams from dozens of cover versions recorded in markets from Japan to Brazil. The Wolf Cousins publishing accounting for that single song alone required seven pages of the eleven-page royalty summary to break down.
* *Sync and master use fee from Fox (received October 1997): $4,000,000*
* *Soundtrack album licensing fees (first cycle, through March 1998): $18,400,000*
* *Soundtrack album licensing fees (second cycle, through December 1998): $9,200,000*
* *Album mechanicals: $4,100,000*
* *Single distribution (Cheiron pipeline, global): $9,800,000*
* *Performance royalties (ASCAP, 1997–1998): $3,400,000*
*Total "My Heart Will Go On" receipts through December 31st, 1998: **$48,900,000.***
This report did not include 'Unstoppable,' which performed exceptionally well in sales. The NBA alone contributed $7.5 million for the song as their anthem.
Amy neatly appended a vital note at the bottom of page eleven, written in her precise, elegant administrative handwriting:
*Note: After the full deduction of estimated 1997 and 1998 federal and California state tax liabilities, and the necessary replenishment of the offshore corporate escrow reserves, the total net cash available sitting in the Zenith Trust master account as of January 1, 1999, stands at:*
***$115,890,000.***
Marvin read the handwritten note twice. He calmly turned back to page one of the document and began analyzing the figures again from the top.
One hundred and fifteen million, eight hundred ninety thousand dollars. Sitting idle in the Zenith Trust checking account. Clean. Post-tax. Entirely his to command.
He had no intention of letting that much capital sit idle and rot in a bank.
He picked up his phone and dialed another international number.
"I will move thirty-five million dollars to Scarlet Capital China immediately," Marvin said into the receiver, without preamble when the line connected.
Lily Chang, sitting in a high-rise office in Shanghai, fully expected this call, if not this instruction. The Scarlet Capital China account—the quiet vehicle through which Marvin stealthily built minority positions in the Chinese internet and technology sector since late 1997—purposely served as the thinnest-capitalized of all the Scarlet entities.
The China thesis proved significantly longer-dated than the explosive American *Yahoo!* thesis. The positions required patient, invisible accumulation over years, rather than the highly leveraged, screaming velocity of the American options program.
Another injection of thirty-five million dollars easily gave the Shanghai account sufficient capital to begin building the controlling positions Marvin quietly considered for the better part of a year.
"The transfer can be successfully processed through Zenith by Wednesday," Marvin confirmed.
"Understood, President," Lily replied, her tone professional. "What is the specific allocation directive on this side for the capital?"
Lily knew her visionary boss incredibly well by now. He never moved money without a target painted on the wall.
"I will send a separate instruction file later," Marvin said. He leaned back. "The priority is the core internet infrastructure. I want to buy the young companies eventually becoming the Chinese equivalents of exactly what *Yahoo!* is in the American market today. Portal infrastructure. Search engines. E-commerce logistics. Not the physical technology hardware manufacturers, at least not yet. We want the software and the consumer services layer."
****
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