pertwk Chapter 353 Starry Sky is being shorted
Chapter 353 Starry Sky is being shorted
January 25, 2000, 9:00 AM.
Ling Yun sat in his office, staring at his computer screen. The Nasdaq index's intraday chart was updating, showing a further decline.
There was a knock on the door, and Fiona pushed it open. She was holding a folder and looked rather grim. "President Ling."
Ling Yun didn't turn around. "Hmm, what is it? Speak."
Fiona walked over and stood next to him, also looking at the screen. "Yesterday's closing price was 59.3, today's opening price was 51.8, and it's currently at 51.2."
Ling Yun hummed in agreement. "Is there something else?"
Fiona placed the folder on the table. "This is the transaction volume statistics for the past few days. Take a look."
Ling Yun turned around and opened the folder. The first page was a table showing the date, trading volume, and average price. He looked at it for a few seconds, then stopped. "This trading volume is wrong; it's a bit high."
"Hmm." Fiona pointed to one of the lines. "In the past three days, the daily trading volume has tripled, but the price has been falling."
"Is someone secretly selling them?"
"Yes, and the purchases were made in a very scattered manner."
Lingyun turned to the next page, which contained a dense collection of account information, all of which were statistics.
"These are..."
"These are the accounts with the largest sales volume in the past three days," Fiona pointed to several. "This one, this one, and this one are all newly opened accounts, opened just last week."
"Have you found out anything about his background?"
Fiona nodded. She pulled a piece of paper from the folder and placed it on top. "This is what the detectives found out. The funds in these accounts all ultimately point to one company."
Ling Yun picked up the piece of paper, which had a name printed on it: Eagle River Investments.
"What kind of company is this?"
"It's 'Eagle River Investment,' registered in the Cayman Islands, but the legal representative is a shell company; we can't find any records." Fiona paused. "However, the detectives traced the funds and discovered that the company's money came from two different places."
Ling Yun looked at her.
"Goldman Sachs and Morgan Stanley, half and half."
Ling Yun put the paper down. "How many have you sold?"
"The total for these three days has exceeded 5%."
Ling Yun remained silent. Fiona waited a few seconds before speaking again, "There's one more thing. There are rumors circulating in the market that there are internal conflicts within Star Technology's management, which could affect performance. They also say the board of directors is going to be reorganized, and the founder might be ousted."
Ling Yun turned to look at her. "Where did this rumor come from?"
Several financial media outlets are reporting on it. I don't know the source, but their accounts are similar.
Ling Yun leaned back in his chair, adjusting his posture to make himself more comfortable. "They want the stock price to drop further. It's a combination of tactics; they're trying to buy shares from retail investors."
"The lower the stock price, the lower their acquisition cost. Coupled with these rumors, investors panic and sell, allowing them to buy at a low price."
"Mr. Ling, what should we do next?" Fiona stood behind him.
Ling Yun turned around. "What is the total share capital now?"
"Two billion shares. They sold 5%, which is one hundred million shares."
"What was the transaction price?"
"The average should be around 55."
Ling Yun thought for a moment, "Let them sell. If you want to short sell, you have to bear the risks."
Fiona paused for a moment, "Keep letting them sell? Shouldn't we prop up the stock price? Or issue a clarification announcement?"
"No need, there's nothing to worry about."
"But……"
"Hehe, the more they sell, the more passive they become later. Short squeeze operations are not just something Wall Street does; I can do it too."
Fiona looked at him, not understanding.
Ling Yun sat up straight. "Have you calculated it? They shorted the stock, selling 1 million shares, which is a quarter of the circulating shares. They're not trying to make money through short selling, nor are they trying to destroy Xingchen. They're just trying to create panic among retail investors, making them sell quickly so they can accumulate enough shares. If there's no panic selling, the stock price will keep rising as they acquire more shares. How much money would they have to spend to get enough shares?"
Fiona thought for a moment, "If we join forces with other shareholders, we'll need at least 40%. They'll need to acquire more than 10% of the shares, which is half of the outstanding shares. Without panic selling, it will cost a lot more money, and the share price will rise to an unimaginable level..."
"So they're waiting," Ling Yun said. "Waiting for the stock price to fall further, waiting for the rumors to spread, waiting for some minority shareholders on the board to waver and start selling off, thus lowering the stock price and increasing the number of shares in circulation from 2 million to 3 million. Then they can buy back the shares, killing two birds with one stone, making money and increasing their controlled shares at the same time."
Fiona paused for a few seconds, then asked, "What do we do?"
"For now, we don't need to do anything. We just wait for them to continue pushing down the stock price, and then we'll take action when the price is right."
"Aren't we going to do anything now?"
"Hmm." Ling Yun closed the folder. "Let them continue shorting, let them continue spreading rumors, let them think that everything is going according to plan."
Fiona looked at him and waited for him to finish speaking.
"The bait has been thrown in; now we just have to see when the fish bite."
Fiona nodded, put the folder away, and said, "Okay, boss, I'll keep an eye on it."
"Okay. Report any changes immediately."
Fiona turned and walked away.
Ling Yun sat there alone, staring at the screen. The Nasdaq was still falling, down to 51.0.
He picked up the phone and dialed a number. "Li Mo, how's the progress on your end?"
Li Mo's voice came through the phone, "It's finished, currently being tested, and expected to go live next Monday."
hang up the phone.
Ling Yun put his phone on the table and glanced at the screen again; the stock price had already fallen to 50.8.
Suddenly my phone rang, and the name displayed on the screen was Eric.
He frowned, but still answered the phone.
"Boss," Eric's voice came through the receiver, sounding a little more relaxed than a few days ago, "I called to say thank you."
"My wife's syncope hasn't recurred in the last two days. The TCM doctor you recommended," Eric paused, "is simply incredible. The medicine he prescribed, after two days of treatment, along with acupuncture, has been very effective. My wife hasn't had a single syncope in the last two days."
"That's good."
"Back in the US, I saw so many doctors, but they couldn't find anything wrong with me. They just said it was neurological and incurable. But after taking Chinese medicine for two days, I was fine."
Lingyun heard him laugh on the other end.
"I don't understand the principles behind it, but it just worked. You know what I mean by this..."
"As long as it works."
"Yes, yes, as long as it works." Eric paused again, "Ling, I'm not good at saying those things, but thank you so much."
Ling Yun leaned back in his chair. "Between us, there's no need for these things."
There was a two-second silence on the other end of the phone. "Ling, how have you been lately?"
"good."
"I heard about the board of directors..."
"It's alright, they can't cause any trouble for us. By the way, Eric, do you remember the first time we met?"
A few seconds later, Eric's voice came through, "I remember, March 1997, at that lousy company. I hadn't been paid for three months, and almost everyone had left."
"You said you could bring seven people with you."
"Seven people, not one missing. Back then, we had nothing. Just one idea, a bunch of code, and a dozen or so people."
"And that beat-up Ford," Eric laughed. "I used to drive that one, the back seat was piled high with cables, I took it everywhere I went."
Ling Yun smiled too.
"Back then, you were working overtime every day, and your wife would call you every day urging you to come home."
"Yes. Later she stopped urging me, knowing it was pointless."
Both of them remained silent for a few seconds.
"Eric, I have something to tell you. StarCraft is about to release a new version with a major kernel upgrade, doubling its performance. If this version is released, its market share will increase significantly. Microsoft will probably be worried."
"Ling..." Ling Yun heard a noise on his end, like someone closing a door. "Ling, this version can't be released."
Ling Yun paused for a moment. "What did you say?"
"Cannot be sent."
Why?
There was silence on the other end of the phone. One second, two seconds, three seconds.
"Eric?"
"Ling, I..." Eric's voice changed, becoming very soft and trembling, "I..."
"This version has a problem."
"What's the problem?" Ling Yun switched the phone to his other ear.
Eric's voice trembled slightly, as if he had made up his mind. "Last October, Jim Olson from Microsoft came to me. They knew about my wife's illness and said that the best hospitals in the US, the Mayo Clinic and Johns Hopkins, are places that ordinary people can't get into in their entire lives. They said that as long as I cooperated, they could arrange all of this. These resources can't be bought with money. They said that as long as I did things for them, all of this could be resolved."
"Five million more. Cash, in a Swiss bank account."
"Ling, I didn't want that money. It's just... my wife's illness. We've been seeing doctors for two years, but they can't find anything. She's dizzy every day, sometimes three or four times a day. I see her lying on the floor, and I don't know what to do. Appointments are six months away, and even when we go, they can't find anything. I have no choice..."
"Later they provided me with code and asked me to incorporate the code that used their patent into StarCraft's code. They also asked me to provide some intelligence, such as who was on which side of the board and what strategic plans I had recently made."
Ling Yun remained silent for a few seconds.
"What else?"
That's all.
A very soft sound came from the other end of the phone, like someone inhaling.
"Ling, I'm telling you all this today because I feel guilty for betraying your trust. I don't ask for your forgiveness, and I'm willing to accept whatever the outcome may be."
"That version can't be released, right?"
"We can't publish it. They're waiting. As soon as we publish it, they'll sue us, saying we infringed on their patents. Then the stock price will plummet, investors will panic, and they can buy it at a low price and gain control."
"Okay. I understand. Just tell them that the latest version of StarCraft will be released next week."