In 1999, the Seagram Group was riding high. This Canadian liquor giant had just pulled off a massive win, acquiring PolyGram—one of the oldest record labels in the world—and merging it with their Universal Music to form the Universal Music Group. Add in Universal Pictures and a handful of other entertainment companies, and they were well on their way to becoming a media titan.
But Dunn? He was just waiting to see them crash and burn.
Seagram's nonstop acquisitions and reckless expansion had stretched their finances thin. By 2000, their debt was crushing them, forcing a sale to France's Vivendi Group. Vivendi started as a water utility company—yep, just like Seagram with booze—but they too had big dreams of transforming into a media empire through mergers and restructurings. And honestly? They pulled it off. After swallowing Seagram, Vivendi became the world's second-largest media company, right behind AOL Time Warner. Pretty wild, right?
So, how'd that turn out? Spoiler: not great. Vivendi followed Seagram's playbook a little too closely—rapid growth, massive losses—and ended up selling Universal Pictures to General Electric. GE then mashed it together with NBC to create NBCUniversal. Oops.
Dunn didn't care about Seagram or the infamous Vivendi. He's a movie guy, and his eyes were locked on Universal Pictures. Seagram hit a debt crisis in April 2000, got scooped up by Vivendi in June, and by December, Vivendi owned all of Universal Pictures and Universal Music. Dunn saw his chance to swoop in and snag Universal for himself. Why not, right?
Universal Pictures had over 1,000 films in its library, global distribution channels, a full-on studio with soundstages, and a spot as a key player in the MPAA—one of Hollywood's traditional Big Eight. It's a heavyweight in Tinseltown, and Dunn wanted in. Back in the day, he'd dreamed of pulling a Jeffrey Katzenberg, Steven Spielberg, and David Geffen—starting his own company to shake up the Big Six monopoly. But after a few years in the game, plus some insider knowledge, he realized that road was *tough*. Like, brutally tough.
The MPAA's rating system alone could sink any outsider studio. Take Harvey Weinstein—Hollywood's so-called "God" at one point. He ditched Disney, founded Weinstein Company, and still got hammered by ratings. *The King's Speech*? R-rated. Meanwhile, Tom Cruise's creepy *The Mummy* from Universal? PG-13. Go figure.
Dunn's doing great right now—big name, big buzz—but that's only because Dunn Films hasn't rattled the Big Six yet. Plus, he's got 20th Century Fox backing him up. The second he starts snagging Oscars like Harvey, the big dogs will come for him. Time to plan ahead! Seagram's debt mess was his golden ticket to grab Universal Pictures.
Where's the cash coming from? The tech stock crash, of course! Dunn's been parked in New York, skipping the Golden Globes, Oscars, everything—even handing off *Spider-Man*'s post-production to his assistant, Morgan Carey. He's been glued to Yahoo's stock like a hawk.
On December 21st, Yahoo broke $400 a share, hitting $401. Dunn held steady. December 22nd, it opened at $405.75 and peaked at $421.19. Still, he didn't budge. December 23rd, it opened at $417.50, topped out at $426.25. Dunn kept his cool. The next few days, it dipped around $400, but by December 30th, it opened at $421.75 and soared to $448!
"Dunn, it's time to sell!" Scott Swift's eyes were bloodshot, like a starving wolf who hadn't eaten in weeks. 🐺
Dunn frowned, deep in thought. He remembered Yahoo's peak market cap topping $120 billion, but it didn't last long. With 2.5 billion shares, that'd put the stock near $500. And the crash? That was 2000, not late '99. Yahoo still had room to climb! "No, we wait!" he said, clenching his jaw.
"But—"
"No buts. I've got this!"
December 31st, a Friday. Yahoo opened at $420.44, hit $441.50—down a bit from the day before. "Dunn, we can't wait anymore. Sell!" Scott urged. He'd been in stocks for years, cautious as ever. Cashing out when things look good is how you win in this game.
But Dunn? He's got that foresight and a stubborn streak. "I said no!"
"It's the weekend tomorrow. Two days of unpredictability. If something goes wrong, Monday could be a bloodbath! $450 is plenty!"
Scott couldn't fathom where Dunn's confidence came from. The market's a rollercoaster, and with 2.1 million Yahoo shares, a dip like last year could cost Dunn $100 million overnight. But Dunn? He just *knew*.
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*Time* magazine named Einstein the 20th century's greatest figure as the year closed out. Then 2000 rolled in—the 21st century had begun!
The first shareholder meeting of the millennium was a mess for Bill Mechanic. Tom Rothman, president of 20th Century Fox, officially demanded Mechanic take the fall for *Fight Club*'s flop and step down as chairman and CEO. News Corp, Fox's biggest shareholder, stayed quiet, so Mechanic hung on—for now. But Rothman secured a second meeting in two weeks. Everyone knew: that'd be Mechanic's last day at Fox. Poor guy's been wasting away lately.
Meanwhile, young Dunn? He's on fire! January 3rd, 2000, a Monday. Nasdaq reopened, and Yahoo started at $442.92, peaking at $477. The Dow jumped 200 points. Dunn ordered a sale: 300,000 shares at an average of $469. January 4th, it opened at $464.50 and blasted past $500 to $500.13! Scott went nuts, and even Dunn let out a triumphant yell. "This is it—today's the day!"
"Sell it all—everything we've got!" His roar echoed through the Nasdaq VIP room. That day, Yahoo traded over 69 million shares. Dunn unloaded in three waves: 500,000 at $478.60, 1 million at $480, and the last 300,000 at $466.70. In total, his 2.1 million shares netted him $1 billion!
He tossed the $10,000 leftovers to Scott with a check—super generous, since Scott's just a hired hand, not a manager raking in 20% cuts. After his $80 million cost and 15% capital gains tax, Dunn cleared $862 million in profit. It's only January, so taxes can wait—he's got bigger plans for that cash!
"Let's start shorting now!" Dunn was buzzing, maybe a little too hyped.
Scott shook his head, cool as ever. "Shorting with leverage means borrowing stock, selling it now, and buying it back later. But Yahoo's red-hot—who's gonna lend us shares?"
"Huh?" Dunn's no stock expert. He blinked at Scott. "So what now?"
"We wait."
"Wait?"
"Yup. Yahoo's in a weird spike. The price is insane—it'll drop soon." Scott sounded legit, mulling it over. "But Nasdaq's sky-high, Dow's steady, and Yahoo's the tech poster child. No big crash yet."
Dunn smirked. Stockbrokers and their smooth talk—if he didn't know better, he'd buy it. "Just tell me: can we short it or not?"
"We can!"
"When?"
"When it stabilizes—say, $300 to $350. Retail investors and firms will chill out, and normal futures trades will work."
"Cool." Dunn grinned. "How do we do it?"
Scott waved off the details. "One question: how big a leverage do you want? Higher means riskier."
"No risk for me! Uh… 100 times!"
"Tricky." Scott frowned. "Yahoo's got under 2.5 billion shares total, maybe 100 million circulating. We might borrow 10 million at most. Dunn, if you want to rake in more from futures, Yahoo alone can't handle your $1 billion."
Dunn's face tightened, lost in thought.
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