Chapter 123 123: Repurchase to Settle Accounts
"Damn, Little Wang, have you finally grown a brain?"
Meng Changkun's eyes widened in surprise, and he was at a loss for words, hardly believing that this move could have come from Little Wang.
"For fuck's sake, Old Meng, mind your language. Are you the one calling him Little Wang?"
Wang Xiaocong glared menacingly and turned his head expectantly towards Lu Liang, "What do you think of my move?"
Lu Liang pondered for a long while, looked at Little Wang, a hint of fatherly pride gleaming in his eyes, "Seems like it might work."
"Damn it, can you stop looking at me with those eyes?" Wang Xiaocong was infuriated.
"Sorry, sorry."
Lu Liang and Meng exchanged a smile, understanding each other without words.
On Monday morning, Lu Liang started his plan by first contacting President Liu of ICBC to secure a foreign exchange loan.
Since he could no longer convert his funds into US Dollars, he had to opt for a loan, but he didn't trust other banks.
Upon learning that Lu Liang only needed 50 million dollars and promised to return it within ten days, President Liu generously approved a loan at a daily interest rate of 100,000th, amounting essentially to zero interest, though collateral was still required.
President Liu was so accommodating, and naturally, Lu Liang wasn't going to make things difficult for him, opting to pledge 400 million RMB.
In the afternoon, Lu Liang approached the JPMorgan office in Modu, depositing 25 million dollars as a margin and using four times leverage.
A combined payment of a daily interest rate of 0.00019, at a stock price of 130.15 dollars per share, he secured 768,000 shares, totalling nearly 99.95 million dollars, with daily interest amounting to 89,900 dollars.
The reason why Lu Liang didn't approach State Street was their tight-lipped nature. If they wished to betray him, his position could have been blown up last Monday night.
However, JPMorgan was different, reputedly resentful towards China, especially as Tesla's stock price at 182 dollars was under their watchful eye.
Even if they had professional integrity, Lu Liang had a backup plan. He had Old Meng bribe an employee at JPMorgan to spread the news of his appearance at the JPMorgan office in Modu that day.
To ensure the news spread, Lu Liang also had President Liu subtly leak some information about transferring 50 million US dollars from the bank today.
"Everything is ready except for the east wind."
Having made all the preparations, Lu Liang set his alarm, closed his eyes in his office, and awaited nightfall.
On the evening of the 10th, at 9:30 PM, US stocks reopened after a two-day break, and Tesla, which had been falling for five business days, finally began its long-awaited rise.
But the momentum of the rise hadn't lasted a minute when Lu Liang placed a single order of 10,000 shares, consecutively smashing five huge orders onto NASDAQ, announcing his arrival.
The previously recovering K-line was immediately suppressed, and the market took a sharp downturn.
At the same time, at JPMorgan headquarters across the ocean:
"How much leverage did that Lu Liang from China use?"
Wilson, JPMorgan's investment chief and a staunch believer in Tesla's potential to succeed Apple as the beacon of a new era, was a white supremacist who believed that a world power should be militarily, culturally, and technologically strong.
Twenty years ago, Bill Gates emerged and led the world into the Internet era with the Microsoft Group.
Five years ago, Jobs, with the nearly artistic iPhone 4, had crushed the then-dominant Nokia.
Wilson always believed that Musk and his Tesla had the capability to lead the next era.
With his backing, JPMorgan had become the second largest shareholder of Tesla, holding 14.85%, second only to Musk.
"25 million dollars, using four times leverage," his assistant replied with a sneer.
As the main force behind shorting the yen in the past, they were well aware of how Lu Liang had made his name.
He was really just a lucky guy who made a few million dollars by following in their wake.
Due to Anshan's inability to challenge Wall Street, they had to amplify his earnings tenfold to use as a shield.
"That's just 100 million dollars, 17.5 million dollars will trigger a margin call once the stock exceeds 153 dollars."
Wilson muttered to himself, instantly discerning Lu Liang's forced liquidation point and his intention to short Tesla.
"He still has nearly 700,000 shares in hand; it won't be so easy for him to face a margin call," the assistant replied.
153 dollars was just the theoretical margin call line; without a chance to sell off the shares, a margin call naturally wouldn't happen.
Wilson pondered, "Let's give up the market tonight, let that Lu Liang wave the flag and shout; we'll just reap the benefits."
"Mr. Wilson, do you know who is shorting Tesla from the inside?" the assistant inquired.
"I've had people looking into it, and we've traced it back to State Street's chips, possibly Blackstone or Muddy Water, hiding and skulking about just like them."
Wilson chuckled, unconcerned about who was involved inside; they had already negotiated a one billion dollar loan with Tesla to help them increase production capacity and fulfill the orders for Model X.
He had plans to make a big profit before that happened—everyone who was short-selling now, from one to all, none would escape.
As soon as Tesla announced the success of the one billion dollars loan, they would immediately take action, bursting all short positions.
Lu Liang was just a joker.
...
Lu Liang from China had arrived,
The news of short-selling Tesla spread quickly.
Only a few knew the truth about short-selling the yen, while most were only aware that months ago, Lu Liang had achieved spectacular results by shorting the yen.
Now, another powerful bearish general had arrived, causing Tesla's stock price to drop further, falling below 125 US dollars.
"Amitabha Buddha, such sin."
Lu Liang couldn't help but click his tongue, silently feeling sorry for the individual investors for a mere three seconds. If the news of his participation hadn't leaked, it meant that the Wall Street institutions intended to digest him quietly.
However, now that the news had come out, it indicated that the institutions planned to let him lead the charge and then wait for the right moment to absorb both him and the individual investors together.
"You guys take your time, I'm walking out with respect first."
Lu Liang's lips slightly lifted, taking advantage of Tesla's falling stock prices to start buying back shares aggressively between 125 and 130 US dollars.
The shares borrowed from JPMorgan hadn't been touched by him at all, not even distributed, planning to return them exactly as they were.
In seven days, a mere 630,000 US dollar interest wasn't much as long as he could buy back smoothly to break even, the expenditure was worthwhile.
The new week brought fiery market trading emotions.
Rumors circulated that Lu Liang, the bearish general from China, had joined, causing uncontrollable falls in Tesla's stock price.
The process of Lu Liang buying back shares was also extremely smooth.
In just two hours, he bought back 280,000 shares at an average price of 126 US dollars, totaling 35.28 million US dollars.
Currently, his account had 115,000 available shares, making a total of 395,000 shares, still 694,000 shares away from the target to break even.
Selling one share and buying ten inevitably led to a rebound in the stock price.
Every time this happened, Lu Liang logged into a small account, pressing down the stock price with a clear selling tactic.
This cycle repeated for six hours.
Only thirty minutes were left until the market closed.
Lu Liang had already bought back 726,000 shares, keeping the cost under 130 US dollars.
Only 363,000 shares were left to reach his goal.
He seemed very patient.
Grinding slowly, little by little, until the market closed today.
The evening of the 11th, Tesla opened with a long-awaited rise of 2.4%, seemingly ending a six-day downward trend.
Before Lu Liang could act, suddenly a force parachuted in, massively selling off chips and taking up the charge.
"The final charge?" Lu Liang's brow furrowed, and he no longer got greedy, quickly ordering a large sell-off.
Fear of heights is an investor's nature, and so is short-selling. Now everyone was worried whether Tesla could resolve its production issues, then experiencing a mad surge in its stock price.
No one dared to attempt a large sell-off at this moment, including individual investors who were on high alert. Suddenly, someone charging in inevitably raised Lu Liang's suspicion of a desperate rally.
Only around thirty thousand more shares to go, and investing over 40 million US dollars more would even the account, but he was too tired to consider so much.
The priority now was to buy back shares to break even.
But this time, the bearish force was fierce, the multitude of chips seeming inexhaustible.
Lu Liang did not bother to disguise, massively buying 364,000 shares, investing more than 45.5 million US dollars, yet still unable to make any impact.
As the break-even was completed, no further funds were invested for rebuying, leaving Tesla completely unsupported.
The stock price fell below 120 US dollars, continuously plummeting, as if falling into a bottomless abyss without any end in sight.
"Are there any more bearish news not released yet?"
Lu Liang couldn't help but wonder if he had made a mistake?
Because in an instant,
Tesla's stock price had already fallen to 115 US dollars.
What do you think?
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