Chapter 801
Stock Price Plunge
"Investigate! Dig three feet into the ground and find out everything! What other mines has that guy surnamed Lu planted in Lianxiang! Also, closely monitor all related accounts and trading seats. I need to know the flow of every single share of Lianxiang stock!" Li Zekai's voice was hoarse, filled with deep-seated hatred and a hint of barely perceptible panic.
Although he now knows that it was that loser from the mainland surnamed Lu who was behind it, he is completely powerless to do anything about it.
And let's not even mention the six-month lock-up period after the shareholding announcement.
Even without this 6-month lock-up period, his truest thoughts and plans would not have led him to choose to sell Lianxiang's shares.
Because he had even bigger plans in mind.
On the surface, his shorting of Lenovo's stock, targeting its former ally Lianxiang, seemed like a money-making scheme. But in reality, he simply wanted to acquire Lianxiang's shares at a lower price so he could get on the board of directors of this mainland technology company and save a large sum of cash.
My father once said that Hong Kong is too small to contain two Li families. If we want to develop and expand the Li family, we have to go out. And the mainland, which is backed by Hong Kong, has the world's largest population and cheap labor force. Sooner or later, it will become the largest consumer market. Whoever can control it, whoever can take the lead over other international capital to seize the mainland market, will at least control one-third of the future global economic discourse power...
To put it bluntly, Li Zekai's move was aimed at securing a share of the profits in the future. No one could guarantee how much he would get, but he had complete faith in his father, Li Ka-shing!
Beijing, Lenovo headquarters.
In stark contrast to the gloomy, stormy atmosphere at the private estate of "Little Superman" on Victoria Peak in Hong Kong, the top-floor conference room of Lenovo's headquarters in Beijing was filled with a sense of relief and satisfaction, as if they had survived a disaster and were finally overjoyed.
Outside the window, the early summer sun shines warmly, while inside, the air conditioner blows a cool breeze.
Lenovo's CEO, Liu Qiangdong, and a group of core executives sat around a long table, all wearing long-lost, heartfelt smiles.
On the table are the latest stock price charts and analysis reports.
"Everyone, take a look at this."
Old Liu's voice carried a hint of barely perceptible emotion as he pointed at the chart. "Think back to a few months ago, when the financial crisis was at its worst, how badly was our stock price driven down? At its lowest point, it fell below 5 yuan! It was on the verge of going down to 4 yuan! At that time, it wouldn't be an exaggeration to say that the building was about to collapse. How many eyes were watching us, waiting to see us fail?"
He looked around at everyone, his tone gradually becoming more impassioned: "Look at us now! Stable at just over 20 yuan, and occasionally even testing the 21 yuan mark! Although we are still far from our peak, look at our peers, look at those brother companies that are still struggling on the floor and being repeatedly battered, Lianxiang is already a bright spot in a sea of red. Shareholders' confidence in us is being restored!"
The voice could be as impassioned as possible, because these could be seen as his political achievements.
what?
Why not compare it to before the financial crisis?
joke!
Since everyone knows it's a financial crisis, an irresistible force sweeping across the entire financial market, what's the point of comparing?
The only comparable competitor is our peers. If we can surpass our peers, then Old Li deserves the greatest credit.
Who disagrees?
The people present looked at each other, and one of the executives smiled and said, "Yes, Mr. Liu, the market is finally starting to take our performance and the potential of the mainland market seriously. We have survived the financial crisis, and we are standing more firmly than many of our peers."
Anyone can flatter, but this time he managed to steal the show.
"So," Old Liu said with a smug and shrewd smile, revealing his long-planned scheme, "I think it's time to give our many shareholders, who have always supported us and weathered the storm with us, a real benefit!"
He picked up a prepared proposal: "I propose a stock split! The plan is to split each existing share into ten shares!"
Upon hearing this, a murmur of agreement and discussion arose in the conference room.
A stock split means that a shareholder who originally held 1 share of Lianxiang stock will have 10 shares after the ex-rights date, and the price per share will be reduced proportionally to about one-tenth of the original price.
"Our goal is very clear."
Old Liu read the explanation verbatim: "First, it will significantly increase the number of shares in circulation on the market, improve stock liquidity, and allow more small and medium-sized investors to participate at a lower price threshold."
Secondly, from a psychological perspective, a price of a few yuan per share is significantly more attractive to retail investors than one of twenty-odd yuan. It makes them feel that the price is "cheap" and "affordable," thus stimulating their buying enthusiasm.
He paused, his eyes sparkling with anticipation for the future: "We believe that after the split, with the influx of more retail investors and the continued recovery of market confidence, Lianxiang's stock price and overall market capitalization are expected to be pushed to a new height!"
As he spoke, he stood up excitedly and said, "Gentlemen, this will lay a more solid foundation and provide more convenient conditions for our future financing plans, whether it is investment in technology research and development or market expansion. What do you all think?"
"Mr. Liu's insight is brilliant!"
"The timing was excellent!"
"I completely agree, it's a win-win situation!"
"If I had known this would happen, I think the company should have started the share buyback program earlier. I'm certain that once the plan is announced, our stock will surge again."
"Yes, yes, with President Liu in charge, our company's stock is definitely going to surge, making the market take notice..."
"Next time we raise funds, I think we might as well shout out the slogan of becoming a 10 billion yuan high-tech enterprise..."
The attending executives all expressed their support.
In their view, the stock price rebounding from single digits to over 20 yuan demonstrates the company's resilience. The stock split is a natural step and an added bonus, which will inevitably be welcomed by the market and further consolidate the gains.
Besides, whether they support Lao Liu's one-man rule or not, the plan will still be approved. They might as well flatter Lao Liu as much as possible to avoid displeasing him and getting rid of them.
And so, with almost no effort from Lao Liu, the meeting quickly reached a consensus, the detailed plan for the split was swiftly finalized and announced to the world.
Throughout the entire Lianxiang community, there was an atmosphere of optimism and anticipation for the future.
The detailed announcement of the split was like a stone thrown into a calm lake, quickly creating ripples in the capital market.
The news reached Lu Yang in Pengcheng immediately.
At that time, Lu Yang was enjoying a rare moment of leisure, flipping through his daughter Xin'er's sketchbook in his study, savoring the tranquility of family life.
The secretary gently placed a briefing on Lenovo's restructuring on his desk.
Lu Yang picked up the briefing, his eyes scanning over key information such as "1 split for 10" and "price after ex-rights is about HK$2.07". His brows furrowed slightly at first, then it was as if a lightning bolt had flashed through his mind, and he froze instantly!
“Break it down... 1 to 10... more than 2 pieces…” he murmured to himself, a hint of confusion flashing in his eyes before being replaced by a bright realization!
A mystery that had troubled him for a long time suddenly became clear at this moment!
"Snapped!"
He slammed the briefing on the table, a complex expression on his face—a mixture of astonishment, relief, and a hint of the irony of fate.
"I see... I finally understand!"
He almost blurted out, "No wonder! No wonder I remember Lianxiang's stock price being so ridiculously low, even just a few cents! I've always wondered why, despite the severity of this financial crisis, Lianxiang's stock price only dropped to around 5 yuan at its lowest point, far from the 'penny stock' level I remembered... So that's where the problem lies!" The "ultra-low price" he remembered stemmed from the stock split that he had overlooked, which occurred right after the financial crisis subsided!
The "more than 2 yuan" after being broken down, in his later memories, after the blurring of time and possible subsequent decline, became the profound impression of "a few cents".
Having figured this out, Lu Yang's thinking immediately became incredibly clear and ruthless.
He picked up the intercom on the table and commanded decisively, "Notify Chen Fan in Hong Kong."
After the call connected, he went straight to the point without any pleasantries: "Chen Fan, have you seen the news about Lianxiang's stock split? The stock price is now over 2 yuan after the ex-rights date."
"Yes, Mr. Lu, I saw it. The market reaction is stable for now," Chen Fan's voice came through the receiver.
Lu Yang's lips curled into a cold, all-knowing smile: "Stable? This is just the calm before the storm, or rather, an illusory bubble. Breaking it down won't change the fundamentals. The problems with Lianxiang are still there. In my opinion, this price is still too high and looks quite risky."
He paused, then issued an unquestionable order: "Haven't we been away from our last shareholding increase for over six months? The lock-up period has long since expired. From now on, immediately begin implementing the plan. List all of our remaining 5% of Lianxiang shares, which were previously locked up in the announcement, for sale gradually, leaving not a single share!"
"Understood, Mr. Lu! Execute immediately!" Chen Fan's voice carried his usual efficiency and a hint of excitement at the impending action.
Lu Yang put down the phone, his gaze fixed on the bustling cityscape of Shenzhen outside the window, his eyes deep and thoughtful.
He felt no hesitation or pity whatsoever.
Is Old Liu having an easy time?
He doesn't care at all.
The fact that Lu Yang did not take advantage of Lianxiang's most difficult time when it was besieged by foreign capital was the last act of "mercy" he showed out of consideration for "fellow countrymen".
As for that Little Superman Li Er Gongzi who was furious and jumping up and down in Hong Kong?
Oh, sorry, the business world is like a battlefield; you have to accept the consequences.
At Lu Yang's command, Chen Fan, who was stationed in the port city, immediately took action.
Century Investment's holdings, equivalent to 5% of Lianxiang's total share capital after the split, began to flow into the secondary market in an orderly and phased manner.
Since this 5% is the percentage after the split, the total share capital increases, and the actual number of shares sold is enormous. The sudden and massive selling pressure is like a boulder thrown into a seemingly calm lake!
The fragile confidence that the market had just built up due to the "low price benefit" brought about by the stock split was instantly shattered!
"A major player is selling off their holdings!"
"We've received word that Century Investment is dumping Lianxiang shares like crazy!"
"Panic selling has emerged; whoever is late to escape will be left holding the bag."
"Even the major shareholders who raised their stake aren't optimistic this time. It seems Lenovo is truly beyond saving..."
"What about the Li family? Didn't the second young master of the Li family, Yingke Electronics, which is owned by that little superman, also raise his bid?"
"Little Superman is in a difficult situation right now. The six-month sales ban period hasn't expired yet. If it does, he'll probably run away by now."
"Holy crap, thanks for reminding me, bro..."
Various messages and panic spread wildly among traders and retail investors.
Lianxiang Technology's stock price plummeted like a kite with a broken string!
On the candlestick chart, a huge, devastating bearish candlestick falls vertically!
2.07… 1.80… 1.50… 1.20… 0.90… 0.70… The speed and ferocity of the decline left all investors stunned and caught off guard!
In just a few trading days, the share price plummeted from around HK$2.07 after the split to around HK$0.39, a drop of up to 81%!
Lenovo headquarters in Beijing.
A furious roar and a loud bang of someone slamming their fist on the table echoed from Lao Liu's office!
"Damn it! Lu Yang! It's him again! What is this kid trying to do?! Is he trying to kill Lianxiang?!"
Old Liu's eyes were bloodshot as he stared at the plummeting stock price curve on the screen, trembling with rage and his blood pressure soaring.
The bright vision and aspirations for the future brought about by the recent demolition were completely extinguished by this bucket of ice water, leaving only endless anger and frustration.
He jumped up and down, cursing at the air, insulting every ancestor of the family.
Oh no, I called my old boss at the Chinese Academy of Sciences again.
This time, he decided to deviate from the market's strategy and instead tell his parents if he was bullied. Even if it didn't cause any real trouble for the other party, he was willing to make the bastard kid feel disgusted.
Victoria Peak, Repulse Bay, Li Zekai's villa.
"Bang—crash!!!"
Another, even louder shattering sound rang out! This time, the victim was a priceless Qing Dynasty imperial kiln blue-and-white porcelain vase.
Li Zekai was like a completely crazed beast, his eyes bloodshot as he stared intently at the dismal stock price displayed on the screen.
"0.39?! 0.39!!! Ah—!!!" He let out a roar that was not human, the immense pain and rage almost tearing him apart!
The huge unrealized losses on the books have turned into a bloody, real loss.
Roughly estimated, PCCW's investment in Lianxiang has caused its market value to evaporate by nearly HK$5 million in just a few days!
Even for him, the second son of the Li family and the head of Yingke, this was absolutely a devastating blow!
This hatred is irreconcilable!
"Lu Yang... I'll make you pay a hundredfold! A thousandfold! If I don't avenge this, I, Li Zekai, swear I'm not a human being!"
The news spread like wildfire, reaching Li Ka-shing's mansion on Deep Water Bay Road.
This Chinese tycoon, known for his foresight and shrewd business acumen, finally showed a slight furrow in his brow as he looked at the reports about his second son's huge losses and the collapse of Lianxiang's stock price. (End of Chapter)