Wolf of Xiangjiang

Chapter 21 [Backhand Short Selling]

Stock investors had a tough weekend, and as the new week approaches, they are once again full of energy.

Lin Zhengjie was like this. More than four months after he was reborn in Hong Kong, he was almost in no mood to wander around, and even the scope of his activities was very small. This is because all his energy is on the 'first pot of gold', and at the same time, he needs to be personally in charge of Rainbow Village as much as possible to avoid a 'run' accident.

In the past few months, Lin Zhengjie has also been living a life of "beating chicken blood" every day.

Wharf stocks continued to perform well in the new week. A large number of retail investors rushed into the market to chase the highs. Some said it could reach HK$50, while others said it could reach HK$80. For a moment, it was like a thermometer falling into a pit of fire.

Originally, a large number of retail investors entering the market meant that institutions were fleeing for profit. But this time, Hong Kong institutions and large investors chose to continue to hold it, waiting for the Chinese-funded boss to officially issue an announcement to challenge British Land.

Tuesday, March 3th.

At Lihuojia Securities Company, Lin Zhengjie was sitting in Ma Yawen's office, giving advice.

By virtue of his status as an outstanding employee and his close relationship with Ma Yawen, he could directly enter Ma Yawen's office. Otherwise, even big customers are usually received in the conference room.

"They ride to work at eight o'clock every day and only earn a few thousand in salary every month. They frugally play stocks and hope to get rich. They have no idea who the real winner is."

"There are still 30 minutes until the market opens. How many retail investors are trying their best to get in? They are all trying to make money for me!"

Ma Yawen looked at Lin Zhengjie, who was full of "wolf mentality", and couldn't help but sigh. Lin Zhengjie already has "tycoon potential" at such a young age. She understood that Lin Zhengjie's success was not due to luck.

First of all, Lin Zhengjie was able to raise so much money not only by relying on high interest rates, but also by gaining the trust of ordinary people.

Secondly, Lin Zhengjie's speculation in Wharf stocks is not just gambling, but a real insight into the value of Wharf and the future trend of the stock market.

In the end, Lin Zhengjie's final sale was the most difficult part - he regarded himself as a chess player, and even the Chinese-funded tycoons and the British-funded giants Jardine Matheson were under his control.

"Can you get 45 Hong Kong dollars per share today?" Ma Yawen asked curiously.

She was a top student in finance and an elite with extensive securities experience, but she actually asked Lin Zhengjie, who had just turned 20, for advice.

Quite simply, Wharf's stock price seems to be controlled by Lin Zhengjie.

"It doesn't matter if the price rises or not. We will sell all the tickets in our hands this morning and be safe. If the price rises to HK$45, we will sell short!" Lin Zhengjie said decisively.

On Monday, 20 Wharf shares were sold at an average price of HK$43.52 per share. Including the 20 shares sold last Friday, a total of 40 shares were sold.

Therefore, today, Lin Zhengjie is no longer under any pressure, and he is even more "arrogant".

Ma Yawen looked at the several articles in his hand and said, "Once these articles of yours are published, they will definitely cause panic on Wharf's stock price!"

Lin Zhengjie didn't hide anything from this woman. He planned to short-sell Wharf, and naturally he also planned to "manipulate public opinion" in the stock market.

"These articles only play a catalytic role. The biggest driving force for the decline is too much profit taking!"

Maya Wen nodded.

That morning, all Wharf shares in Lin Zhengjie's hands were sold out, with an average price of HK$43.62 per share.

He immediately made statistics:
In the first wave of 42.8 shares, his holding cost was HK$13.55 per share, which was eventually sold at an average price of 43.25, with a gross profit of HK$1258 million. After deducting the interest of HK$130 million from the fund-raising and the interest from the capital allocation of HK$28, he finally obtained Net profit was HK$1100 million. Because the principal was only 1100 Hong Kong dollars, it was ignored. The real capital he obtained was million Hong Kong dollars.

In the second wave of 5.66 shares, the holding cost was HK$17.65 per share. The final average price was HK$43.50 and the gross profit was HK$140 million. Ma Yawen needed to pay interest of 25 and capital allocation interest of 5. In the end, Lin Zhengjie made a profit of 110 million. , he still has no principal, so what he gets is 110 million Hong Kong dollars.

In the third wave of 19.22 shares, the holding cost was HK$26.02, and they were all sold for HK$43.60, earning a gross profit of HK$330 million. He needed to pay the interest of HK$30 in capital allocation, and he should have actually received HK$300 million in the end.

After some calculations, Lin Zhengjie used a start-up capital of 2 Hong Kong dollars to earn a full 1510 million Hong Kong dollars, an increase of 755 times in four months.

This should be recorded in the annals of history as a rich man’s fortune!
noon.

After returning to Taifu Development, Lin Zhengjie walked with wind.

There is no way how many tycoons can really calm down when they get their first pot of gold. Moreover, Lin Zhengjie's first pot of gold was so huge.

"Fangtang, how many financial commentators have you contacted?"

He Fangtang said quickly: "In the past few days, there have been three financial commentators who have had dinner with me, and they all often appear in newspapers."

Lin Zhengjie nodded and said, "Okay, I will ask them to do something at any time!"

He Fangtang said: "No problem! As long as you give them money, they will find it easy to write an article!"

It turned out that Lin Zhengjie wanted to use the stock market trick of later generations to spread some bad news, which would later help short Wharf.

Of course, the news he spread was absolutely convincing and true, it was just amplified. Wednesday.

Wharf's stock price reached a new high, first breaking through 45 Hong Kong dollars, and then breaking through 46 Hong Kong dollars, approaching 50 Hong Kong dollars.

Lin Zhengjie received a call from Ma Yawen in the office.

"Okay, you sell 30 shares for me!"

"Didn't you say that the debt will be repaid by the end of this week, so why are you still selling so much?"

"Don't worry, I've calculated that this is all my profit, go ahead and do it boldly!"

“Smelly”

After hanging up the phone with a smile, he had been having a heated relationship with Ma Yawen recently. The two seemed to be partners, but in fact they had exceeded that limit. In particular, Ma Yawen sold short for Lin Zhengjie, which can be said to be quite risky.

At this time, there is no such thing as short selling in Hong Kong. Short selling is just an act that skirts the edge of the law - making a delivery time difference.

Later, Lin Zhengjie called He Fangtang and gave him two envelopes.

"Each envelope is HK$5000 plus a press release. You ask a financial commentator you know to polish the press release and send it out. You will give a deposit of HK$2500 first, and then you will give another HK$2500 after the newspaper is published tomorrow."

He Fangtang took the envelope and said, "Okay, I'll go see them right away."

In fact, without these two articles, Wharf's stock price would have fallen, because the high point was 45 to 46 Hong Kong dollars per share. Once it fails to rise, profit makers will have to flee one after another.

Taking into account the asset value of Wharf, there is no problem in the subsequent stock price running around 35 Hong Kong dollars.

Lin Zhengjie short-sold 30 shares at an average selling price of HK$45. However, he did not have the shares in hand, so he needed to buy shares next Monday to repay.

Thursday.

"HSBC intervenes, Chinese tycoons compromise and stop acquiring Wharf shares": It is said that HSBC's chief executive Shen Bi personally intervened and advised the Chinese tycoons to give up the acquisition of Wharf. The Chinese-funded tycoons assessed the situation and believed that it was inappropriate to establish two powerful enemies, Jardine Matheson and HSBC, at the same time. The company also hopes to receive support from HSBC for its future development. Even if we don’t take a long-term strategy, let’s talk about the present. If HSBC loses face, HSBC will definitely lend money to support Jardine Matheson, and the acquisition of Wharf will be a piece of cake. The Chinese tycoon then agreed to Shen Bi to withdraw his troops and stop making acquisitions. At this time, the Chinese tycoon has acquired nearly 2000 million shares. Will he cash out in the market and make huge profits?
"Chinese-funded tycoon holds 20% of Wharf's equity, but reluctantly chooses to give up the acquisition": It is said that HSBC came forward, and the Chinese-funded tycoon had no choice but to stop. Given that the cost of holding 2000 million shares by a Chinese-funded tycoon is only about HK$25, cashing out from the market will pose a huge challenge to Wharf's share price. If cash is not carried out, as much as to million yuan of funds will need to be occupied for a long time, resulting in poor liquidity.

The next day, two comments by financial experts were published in Sing Tao Daily and Industrial and Commercial Daily. They were immediately seen by some people holding Wharf stocks, causing a certain amount of panic.

This was probably the earliest use of the media to go short in the Hong Kong stock market, and it achieved a huge effect in a short period of time. Especially since Wharf had a large amount of profit taking, they were the most vulnerable people. As soon as there is any disturbance, they will immediately flee.

For a time, Wharf stock formed a stampede, falling sharply from HK$45.5.

Some retail investors who chased the rise were the worst offenders. Stimulated by the words "you will make money if you buy it", they used their hard-earned money to buy Wharf at a high price, and soon suffered huge losses.

Friday.

The floor of the exchange.

A junior nurse in ordinary clothes stood at the front of the crowd, with an anxious look on her face.

"It has fallen again. It has already fallen by 8 yuan. Damn it, Li Jiacheng, how many stocks have he sold!"

She bought it at 43 Hong Kong dollars and heard that it could rise to 80 Hong Kong dollars per share. At first she 'earned' two Hong Kong dollars, and she happily celebrated at home that night. Unexpectedly, she was only happy for one day, and she lost 4 Hong Kong dollars per share.

She heard from the newspaper that the Chinese tycoon was advised by HSBC to cancel the acquisition of Wharf and instead sell its shares.

Therefore, at this time, he focused his hatred on the Chinese-funded tycoons. Although it was not stated clearly in the newspapers, anyone who speculated in the stock market knew that Li Jiacheng was acquiring Wharf.

Someone echoed: "I heard that Li Jiacheng's cost is only about 25 Hong Kong dollars. With this sale, he has to suppress Wharf stock to less than 30 Hong Kong dollars!"

The person next to him said: "He makes a lot of money every time he buys and sells, but it's the retail investors like us who suffer!"

Half an hour after the market opened in the afternoon, Ma Yawen called.

"Zhengjie, Wharf stock has dropped to 36.5 Hong Kong dollars per share!"

"Buy it! We'll close it when it's good. There's a lot of scolding outside. I guess Li Jiacheng will stand up and explain."

"Okay, I'll buy it right away."

After Lin Zhengjie hung up the phone, he didn't expect that the public opinion this time was so fierce. It happened to be the right time and place, causing Wharf to plummet for a short period of time.

Of course, he still smiled. In this round of short selling, he seemed to have made more than 200 million Hong Kong dollars.

(End of this chapter)