509: 452 Words Out, Law Follows (Seeking Monthly Pass!) 509: 452 Words Out, Law Follows (Seeking Monthly Pass!) Without a doubt.
The young man beside him was his benefactor.
Ever since he had t him, his career had been booming, and he had even t people like Liao Xiangdong.
But at this very mont, Bai Haoran realized that he might have underestimated the potential, or rather, the ambition of this recent graduate.
He was different from Li Shuru.
He traded stocks.
But like most small investors, his record was dismal; after all, the stock market treated those below the middle class equally.
However, he did have a certain understanding of the stock market rules.
No wonder Jiang Chen wanted to cooperate with securities brokers.
He wasn’t aiming to be a re speculator.
He was actually planning to truly short the stock of K.E!
Most stock traders, after buying stock, just wait for it to rise or fall, much like farrs are at the rcy of the weather.
But the real magnates are different.
Real magnates manipulate situations and guide events to develop in their favor.
Simply put, ordinary investors are resigned to their fate.
But when the magnates trade, their words beco law.
If I buy, it will rise; if I sell, it must fall!
To achieve this with a newly listed small company is not difficult.
But for a mature, stable company with a broad market and nearly three hundred billion in value…
To manipulate its stock price?
That’s tantamount to a fool’s dream!
If he had heard this from soone else, Bai Haoran would definitely have thought they were boasting.
But coming from this young man, he actually believed that the other party might indeed have the capability.
The two sisters were whispering to each other, apparently Li Shuru asking her sister about the stock market.
Liu Hongzhi couldn’t help but raise his hand to adjust his glasses.
From this small action, it was clear that this well-inford Wall Street prodigy was not calm inside.
Managing a 50 million fund for an ordinary household, like his girlfriend’s family, indeed was quite an accomplishnt, sothing to boast about.
But he was well aware that such capital, amidst the glittering Wall Street, the center of the world’s financial system, was hardly worth ntioning.
His normal job was to invest this 50 million and earn returns for the owners behind the money.
Trading stocks was common, but if he wanted to use this money to affect the stock price of a company like K.E.
—
To put it bluntly, it was like an ant shaking a tree; throwing all of the 50 million at it wouldn’t make a splash!
“The brokers I know of that have such power, there’s only Longtong,” Liu Hongzhi said.
He paused, then added, “However, even if Longtong were willing to lend out all of the K.E stocks it holds in custody, it would probably be very difficult to cause a major fluctuation in K.E’s stock price.”
“How many shares do you think it would take to cause a major drop in K.E.
Group’s stock price?” Jiang Chen asked incisively.
Liu Hongzhi fell silent, then uttered a number.
“Twenty million shares.”
Conversations between smart people don’t need many words.
How did Soros succeed in shorting the Thai baht?
To put it simply, he took advantage of the chaos in Thailand’s currency system.
Posing as various entities, he borrowed a massive amount of Thai baht from the Bank of Thailand, then chose the right mont to sell it off in the market.
Anyone with a bit of insight knows that once the currency in circulation exceeds demand, that currency will inevitably depreciate, leading to serious inflation.
That’s exactly what happened in Thailand back then.
Due to Soros’s malicious sell-off and international short-sellers’ cooperation, the Thai baht rapidly depreciated, triggering an avalanche effect and completely collapsing Thailand’s economy.
Even though the Bank of Thailand tried its best to buy back the currency, they eventually ran out of foreign exchange and all efforts were futile; they were powerless to reverse the situation, leading to a financial crisis that still pains the Thai people to this day.
And what about the instigators like Soros?
After enjoying a feast for the eyes, they used the plumting exchange rate of the Thai baht against the US dollar to repay the borrowed baht at a very low price.
Carrying off enormous wealth plundered in the raid, they brushed off their clothes and left, leaving behind a devastated Thailand.
The approach to shorting a country’s currency is the sa as shorting a company’s stock.
If you want a company’s stock price to plumt, the simplest way is twofold.
That is, there is a problem with the enterprise’s own managent.
For K.E, this was highly unlikely to occur, as it had enjoyed smooth sailing and developnt for decades.
The second possibility.
It is like the Thai baht collapse, where soone dumps a large number of K.E shares, which then triggers market panic.
Even a country cannot withstand the herd ntality inherent in human nature, let alone a company.
However, in order to cause market panic, the number of shares that need to be sold must be substantial.
Twenty million shares.
When converted to the closing price of K.E that Liu Hongzhi had just ntioned yesterday.
It adds up.
That would require 3.2 billion Euros.
Which is almost equivalent to 23 billion RMB!
Of course.
If you collaborate with a brokerage, you might not need to fork over as much cash, much like Soros originally borrowed Thai baht from banks in Thailand.
You can also borrow stocks from a brokerage, provided you can pay the interest.
But the key question remains.
Why would a brokerage lend you stocks worth such an enormous sum of money?
And the brokerage might not possess such a quantity of shares to begin with.
“The one you ntioned, Longtong, how many shares of K.E Group does it hold?”
Jiang Chen asked.
“I’m not sure, I’ll have to inquire about that.”
Jiang Chen nodded.
Actually, not long after seeing the news, he had considered this might be the opportunity to complete his second strategic task.
The best way to gain favor is to stand up for soone when they are suffering or subjected to injustice, right?
His initial idea was to directly acquire the K.E Group.
However, it was obvious.
This idea was not realistic.
Why would a well-run, mature brand, globally known enterprise sell to you?
Of course.
He possesses “cash capability.”
The market value of K.E is over 200 billion.
He seems capable of spending two trillion to force the company to sell, but doing so clearly doesn’t fit the logic of any sane person.
He certainly didn’t want to be seen as a lunatic by the entire world and then be taken away for research.
Moreover.
Forcing the acquisition of K.E Group, aside from the unpredictable risks, also seems to give the other party a bargain.
How is that different from soone insulting you and you paying them to apologize?
In the end, he feared it would not improve Pei Yunxi’s regard for him and he might just beco a fool in everyone else’s eyes.
“Okay, then please trouble you to contact Longtong for .”
Liu Hongzhi hesitated to speak, clearly having nurous questions, but in the end, he held back.
“Alright.”
He nodded, his heart tumultuous.
This man.
He was serious.
Which ant that he could co up with at least over three billion Euros!
If he hadn’t seen that nearly hundred-million dollar blood diamond with his own eyes at Qindao, he would have certainly thought his girlfriend’s sister had encountered a scam artist.
Even having seen wealthy individuals on Wall Street, soone of this caliber was still extrely rare.
Lifting his coffee, Liu Hongzhi was filled with mixed emotions.
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