What's wrong with me being a rich man?

Chapter 625 Infinite Ferocity Over the Mountain Peak (4k)

The "King of Short Sellers" from mainland China held a press conference to release the prospectus of Silicon Carbon Group.

Yu Xing considered the press conference to be a great success. It not only answered some of the key questions from the Silicon Carbon Group, but also demonstrated Guo Shanfeng's research on the fundamentals of the listed company. In addition, there was the research assistance from international short sellers who had been preparing for a long time. In the end, although there were some minor setbacks, he himself was unharmed.

What more could you ask for?

However, local Hong Kong media outlets were at a loss for how to report on this meeting of the "King of Short Sellers".

A living, breathing king of short selling, the latest short selling demonstration on the spot, the victim causing chaos by making trouble in front of him, oh right, and the European investigation team... How can so many things be organized into a single report?
Among these companies, Silicon Carbon Group seems to have the least presence in the Hong Kong listing process. However, this new energy company has actually broken the record in the Chinese automotive market. This time, it intends to list on the Hong Kong GEM board. Although there are still doubts in the market, once it is successfully listed, its market value of at least HK$100 billion will immediately make it the No.1 on the GEM board.

After all, the highest-valued company on the ChiNext board today, China Credit Holdings Limited, has a market capitalization of only HK$130 billion, while the total market capitalization of the entire ChiNext board is only HK$3100 billion.

Silicon Carbon Group has its own unique characteristics; once it is listed on the Growth Enterprise Market (GEM), it will inevitably be transferred to the main board after one year.

The major Hong Kong media outlets had many considerations and wanted to wait and see how Steinhoff's business would turn out, but the smaller Hong Kong media outlets had no such scruples and even released all sorts of news before the meeting was over.

—A short-selling giant forcefully injected shares into Hong Kong stocks!
—Smoking in the dark alleys! The regulators are frantic and can't handle it!
—From bears to bulls! Hundreds of billions of dollars in short selling have fleeced retail investors in Hong Kong stocks, leaving them panicked and fleeing!

When Yu Xing returned to his suite, he glanced at the news report and found it both amusing and exasperating.

Standing to the side, Cui Zhiyu covered his face, noticing the unusual media style, and couldn't help but ask, "President Yu, what does '淡友' mean? And what does '暗巷' mean?"

"A 'danyou' is roughly equivalent to a short seller," Yu Xing laughed. "Anxiang means 'behind the scenes,' something secretive, like behind-the-scenes manipulation or private dealings. This 'anxiang cao danyou'..."

He shook his head: "That's how the tabloids are here."

Cui Zhiyu understood the meaning and the homophony, and then asked a question he couldn't ask in public before: "President Yu, is there really something wrong with that Steinhoff? This...this is too amazing, isn't it?"

“Financial reports are financial reports. I’ve always said that it’s impossible to make a judgment immediately,” Yu Xing replied patiently. “I can only say that there are indeed anomalies. If given time, we can use on-site investigations to verify where the anomalies came from. This is the objective situation.”

He thought for a moment, then added, "Of course, I have a feeling that George, who excitedly came to report it, is very likely to have the truth. That's my subjective inclination. Add to that the unusual financial reports, and Daniel's short-selling report, and all in all, it's pretty much a 100% chance now."

"Nine times out of ten, the results of this cross-validation will not lead me to short sell. If I were to establish a position, I would still trust the results of my own independent research more."

Cui Zhiyu nodded, then suddenly asked, "President Yu, was George really not someone you hired?"

Yu Xing laughed and said, "Of course not, but if there is a similar situation next time, it is indeed a good choice to find a shill like this. We still need to learn from this experience."

Cui Zhiyu basically believed the boss's answer at this point. As for the remaining distrustful people who were still unwilling to all stand up for him, well, after all, he was a big short seller, and anything was possible.

His face was a little swollen. He took a few steps to relieve the pain, but when he got to the window, he saw the media reporters still lingering outside the hotel. They were like wolves, waiting for him.

Cui Zhiyu sighed, touched his face, and said softly, "President Yu, I miss home. When are we going back to Lingang?"

Before Yu Xing could answer, he suddenly realized something and exclaimed in astonishment, "Wait a minute, it seems like someone pushed me earlier! Who pushed me from behind!"

With a bruised and swollen face, Cui Zhiyu glanced around and saw Zhang Yangxu turn his head away as if feeling guilty. He immediately tried to pinpoint the target: "Zhang Yangxu, did you push me from behind? Why didn't you pounce on him yourself?"

Zhang Yangxu avoided meeting President Cui's eyes, and instead spoke to his boss, feigning ignorance: "President Yu, what does President Cui mean by that?"

"What do you mean?" Yu Xing looked at Cui Zhiyu after the fight and said, "President Cui's words expressed his deep longing for his hometown."

Zhang Yangxu chuckled: "President Cui, I'll go get some liniment. Is this kind of medicine very effective in Hong Kong?"

The secretary had only taken a few steps when the hotel called. It was Bauman and others from Europe who wanted to meet with Yu Xing privately.

“Let Deng Ning handle it,” Yu Xing said without hesitation. “I have no interest in meeting them.”

Zhang Yangxu nodded and hurried to find the top lawyer next door.

Cui Zhiyu rubbed his face, first made a cup of tea for the boss, then made himself a cup of coffee, drinking it while observing the reporters on the street, still somewhat incredulous about what he had seen on this trip.

A moment later, he turned to his boss and asked, "Mr. Yu, can we successfully go public?"

"Who knows?" Yu Xing shook his head. "If we really can't go public, then we'll just have to let things settle down a bit more."

He pointed to the computer screen and said, "However, there's nothing wrong with this report from Oriental Daily. Silicon Carbon Group has been listed on the ChiNext board, but its valuation may still need a 10%-20% discount, as the liquidity of the ChiNext board is not enough."

Cui Zhiyu leaned over to take a look and saw that the report included a section on the valuation of the Silicon Carbon Group.

The ChiNext board is positioned as a preparatory market for companies transferring to the main board. Just look at Huaxia Credit Company, which now has a market capitalization of up to 130 billion yuan. Therefore, Carbon Silicon Group has already adjusted its IPO market capitalization in this round.

After carefully reading through the document, he thought about it for a while and suddenly felt that it would be best to leave the problem to the professionals. He asked the short seller next to him, "Mr. Yu, what kind of impact will this have?"

Yu Xing hesitated slightly: "It's hard to say. The ChiNext market is only so big, and the liquidity is only so much. Having prices but no market is basically a negative factor. In addition, going through the peak will inevitably offend people, and short sellers may come to dump the shares."

Cui Zhiyu considered that the process from IPO application to success would take at least several months, and after hesitating for a while, he asked, "Then what should we do? We can't just watch, can we?"

Yu Xing smiled slightly: "It's really not quite used to switching from short to long positions. We'll do some market value management and see what level those short sellers are really at."

Cui Zhiyu felt as if he could sense a murderous aura.

He doesn't really understand this area, but his boss is a big short seller. He's already aware of the potential problems and has time to prepare, so he shouldn't suffer too much.

Yu Xing read the Oriental Daily News report twice more. The article was relatively comprehensive and objective, and most importantly, it expressed his position that "it is not yet possible to draw a conclusion" regarding Steinhoff Company.

Regarding the potential challenges that Silicon Carbon Group might face when it goes public on the ChiNext board, he and Xiaoying discussed this yesterday. Even with the title of "China's No. 1 New Energy Company" and its market potential, liquidity in the capital market remains a significant issue.

In addition, the lawsuits faced by founders and the reduction of subsidies that can be used as a basis for speculation make it relatively easy to hype up negative factors. The most important factor is still that the market capitalization of the ChiNext board is not large enough, making stock prices relatively easy to manipulate.

However, this can also be exploited. Short squeezes are common in global financial markets, the most famous being the Volkswagen short squeeze, while the Game Station retail investors' group short squeeze was also well-known.

Tesla also experienced a massive short squeeze, with its stock price surging 743% throughout 2020, causing heavy losses for short sellers.

When Silicon Carbon Group had to turn to Hong Kong stocks and target the Growth Enterprise Market for its IPO, Yu Xing considered the potential allure of the peak and also drew inspiration from the bullish strategies employed in this regard.

Yu Xingsheng hates two things the most: first, not being allowed to short sell, and second, others short selling him... However, all of that depends on the outcome of Silicon Carbon Group's IPO.

Yu Xing read the report for a while, then went to the window to look at the media waiting outside. He sighed softly. When you're shorting, it's easy for blood to flow like rivers. Does being a bull mean blood will flow like rivers too?

The head of silicon carbon has to consider the company's future market value, but his public analysis this morning has already woken up many institutions, investors and parties involved.

What does it mean that someone went to the scene to report the "King of Short Sellers"?
What does it mean for the "King of Short Sellers" to put on a live short-selling performance?

What does it mean that Steinhoff has been flagged for multiple anomalies by the short-selling king?

Steinhoff has a market capitalization of 18 billion euros. It was only listed on the Frankfurt Stock Exchange in Germany last December and was the largest offshore listed company in Germany last year. Allianz and Deutsche Bank bought a lot of shares.

Globally, firms like BlackRock, Vanguard, and the South African public fund also hold substantial amounts of stock. If their fraudulent activities are proven, their proprietary trading and asset management departments will suffer huge losses.

As the chairman of Steinhoff, Christoph Wiese responded immediately upon receiving the news.

Wiese vehemently denied any fraud by the company, issuing a strong statement via Twitter and the media: "The big short seller in the East is trying to smear Steinhoff. I will sue him and bankrupt him! He is attempting to manipulate the market! This is a crime!"

Wiese, then 75, was the company's largest shareholder, holding shares worth 48 billion euros.

He declared publicly that he would never compromise and would fight the evil short-selling forces to the end.

However, as the "unconventional" information marked by the King of Short Sellers spread, and another major Wall Street short seller, Daniel, released a short-selling report with more details, Wizer gave a second statement.

"Although Guo Shanfeng has successfully shorted many companies in the past, he is not necessarily right. I hope everyone can analyze carefully instead of believing his conclusions. I can guarantee that Steinhoff will not have any major problems, absolutely no major problems!"

Compared to his furious outburst half an hour earlier, Wiese's attitude had softened slightly.

Daniel, the big short seller, is not the only force that has stepped up to hit Steinhoff's stock price.

The king of short sellers lit the fuse, and the big short seller Daniel intensified his firepower, quickly uncovering more anomalies about Steinhoff.

Sources familiar with the matter revealed that JPMorgan Chase analyst Sean Holmes published a 56-page critical report as early as 2007, questioning the company's profitability and arguing that its financial statements lacked transparency and disclosed information poorly.

Among these issues, the problems of Steinhofer's inflated assets and questionable low tax rates became the focus.

However, such doubts ultimately came to nothing and did not delay its listing in Germany.

Now, with the analysis and short selling by well-known short sellers, the old news has been brought up again, which has undoubtedly increased the market's and institutions' concerns and doubts about Steinhoff.

Wiese has not spoken out publicly since, but the contents of his emergency call with the agency have been leaked.

When questioned by the organization, the chairman replied, "I don't know. I've only chaired four board meetings in the past two years. Should I be aware of everyone else's situation?"

The release of this conversation caused an uproar and immediately triggered huge panic in the capital markets.

At this point, it has become a consensus that Steinhoff committed actual fraud.

In pre-market trading on the German stock market, Steinhoff's buying orders almost disappeared, while a large number of panic sell orders piled up.

Global media and financial professionals are closely watching the company's foreseeable market capitalization explosion.

At 9:00 AM in Germany, Steinhoff's stock price opened 60% lower, immediately triggering a circuit breaker. It continued to be halted for the next half hour, with trading suspended multiple times, resulting in a complete lack of liquidity.

The stock market did not close. Yesterday, Steinhoff's 180 billion euros had already evaporated by 110 billion euros, which in turn caused a sharp drop in the German stock market index.

Meanwhile, the company's CEO, Marcus Just, announced his resignation within ten minutes of the market opening, a move that undoubtedly further confirms the severity of the company's financial fraud.

From a thriving “African IKEA” to a disgraced financial fraud, Steinhoff only took six hours.

In the evening in Hong Kong, Yu Xing, who was visiting for the first time, still wanted to go out and see the scenery and taste the local delicacies.

He led his men downstairs, and as soon as they arrived in the lobby to observe the media's stakeout, they saw a group of people passing by.

Yu Xing glanced at him twice, but to his surprise, the other party quickened his pace and spoke repeatedly.

"Mr. Yu, don't look at me, don't look at me. If the reporters take pictures of me, my company's stock price will be in trouble."

Yu Xing: "?"

He watched in astonishment as the group of people quickly left, without even seeing their faces clearly, and had no idea who they were.

Cui Zhiyu, standing nearby, was itching to go: "President Yu, may I follow them and see which listed company it is?"

Yu Xing glanced at him sideways: "What do you mean?"

Cui Zhiyu thought to himself, "What do you mean? What are you pretending to be, a good person?"
He pointed and said, "President Yu, Zhang Yangxu has already gone over there."

Yu Xing glanced to the side and saw that his secretary had indeed thoughtfully followed him.

He quickly stopped and criticized Zhang Yangxu's inappropriate initiative.

Zhang Yangxu nodded repeatedly, secretly suspecting that his boss might have memorized the faces of the people in question, or even knew their identities. After all, President Yu was the most professional.

Yu Xing took a deep breath and glanced around. To his surprise, even Zhang Yangxu and Cui Zhiyu beside him couldn't help but take two steps back.

He frowned and said, "Why are you backing down? What are you afraid of?"

Cui Zhiyu licked his lips and said sincerely, "President Yu, this is out of awe for the burning of the Euro."

Even though we're all on the same side, crossing the mountain is a bloody affair, and today's ferocity is truly excessive.

(End of this chapter)