Chapter 643
Defeat
Chapter 643 Defeat (4k)
Xu Xin spent a sleepless night in Shanghai.
She both anticipates what kind of "see you tomorrow" Jia Yueting and LeEco will bring, and feels that this well-known domestic internet brand is probably about to fall and collapse this time.
Although I know that Mr. Yu is not optimistic about LeEco's car manufacturing, as he said, that is only LeEco's non-listed business. Now, can so many businesses and stories really not hold up?
Although Guoshanfeng's previously exposed business scale and related market value were far higher than LeEco's, the fact that such a familiar brand could have such an unexpected situation has indeed caused a great shock.
Xu Xin kept thinking about this, and couldn't help but call Li Song again.
Li Song's voice was clear after answering the phone: "It's past one o'clock, why aren't you asleep yet?"
Xu Xin asked, "You're not asleep either? What are you doing? Why aren't you asleep at this hour?"
Li Song lowered his voice: "I'm studying the materials."
Xu Xin said, "Are you looking at LeEco's news? What did President Yu say? Has he crushed LeEco this time? What does he think of 'See you tomorrow'? They should be going back to Lingang by now."
"Hmm...yes." Li Song looked at the silver-related materials in front of him and lied through his teeth. "I'm just reviewing the LeEco materials. There's probably nothing to say this time. President Yu's flight back is tomorrow afternoon."
Upon hearing this, Xu Xin pressed further, "What do you mean by 'nothing to say'? What exactly happened at the time? What was Sun Hongbin's attitude? Jia Yueting seemed very confident."
Li Song said somewhat impatiently, "Didn't I already tell you? It's just the literal meaning."
"Li Song, so you've latched onto someone powerful now, haven't you!" Xu Xin said angrily. "You think I'm annoying? You're getting all smug now that you've followed Guo Shanfeng, aren't you?"
Li Song realized he had made a big mistake and immediately said softly, "No, it's just that it's so late and you're still not asleep. I don't sleep well to begin with. Oh, don't think that just because I'm in Hong Kong, I can just look at how I flew here myself. President Yu only asked me to come along because of you. He won't say anything else to me. I just did my own research on LeEco and I think President Yu's attitude is still very firm."
He paused, then reminded him, "Mr. Yu isn't Mr. Yu; he's a big short seller. His past convictions were in globally renowned companies like Volkswagen and Renault. LeEco may have a reputation in China, but how does it compare to those? Mr. Yu isn't someone who hasn't seen his share of ups and downs, so I believe him."
Xu Xin's thoughts suddenly snapped out of their reverie, and she sighed, "Yeah, he's that big short seller. Oh well, time to sleep. I'll go to LeEco's press conference tomorrow and see what kind of confidence they have."
After ending the call, she gave herself a self-reminder: familiarity breeds contempt, and closeness breeds disrespect; she must never forget her ability to overcome obstacles.
Li Song put down his phone and muttered, "It's not that I'm impatient, it's that I have something important to do."
The materials he currently has are comparing the suspected manipulation of international silver prices by investment banks. At least three well-known investment banks are involved, and the market has been manipulated for at least eight years.
白银价格在2008年到2011年从8.4美元/盎司疯涨至49.82美元/盎司，又在2011年到2015年从49.82美元跌到13.6美元，再到今年，白银价格又有抬头趋势。
Although Li Song has a financial background, he hadn't really paid attention to this field in the past. In previous years, he focused more on the financial crisis and its aftermath. Now, he's comparing his observations with the news about Guo Shanfeng to verify...
The global annual trading volume of silver is only $300 billion, making it a relatively niche market. The average daily trading volume of COMEX silver futures is around 8 lots. Financial trading far exceeds physical production, and futures prices can dominate spot price trends.
And, most importantly, investment banks use high-frequency trading to create fake orders and generate spoofing trades. This manipulation would have a much smaller impact on assets with high liquidity and more complex participant structures, but the silver market is quite different.
Based on the data from the key time periods, Li Song logically concluded that he was almost certain.
JPMorgan Chase and similar firms would place a large number of fake buy or sell orders in the market to create the illusion of bullish or bearish pressure, manipulate market sentiment, induce other investors to follow suit and drive price changes, and then quickly cancel the fake orders to profit from it.
Fake orders, real inducements, quick order cancellation, real transactions.
However, the time difference between order placement and execution on electronic trading platforms is only a few milliseconds to a few seconds. This means that tens of thousands of fake orders cannot be manipulated manually. Since the financial crisis, high-frequency trading systems, which have been widely introduced, have become tools for this kind of market manipulation.
At the same time, this new way of using high-frequency trading may not have been quickly brought under regulatory control, and there may also be a lack of monitoring by exchanges.
Li Song went through it from beginning to end, and finally looked at his handwritten "JPMorgan Chase", "Deutsche Bank" and "Bank of America" with excitement on his face.
Although there is a lack of regulation for high-frequency trading, the United States has made "spoofing" illegal since the implementation of the Dodd-Frank Act in 2010. Once such long-term market manipulation is exposed, it will face severe penalties.
He now roughly understands President Yu's intention—if he's punished, then he can't be punished...
There are similar precedents in Europe and the United States. The most famous example is when Samsung betrayed nine competitors who manipulated LCD panel prices. In the end, Samsung was completely exempted from criminal charges and fines, while the nine companies were fined a total of more than $11 billion.
Samsung may also face criticism to some extent; Mr. Yu really sacrificed his own interests for the sake of his friends.
Li Song became more and more excited as he thought about it, so he simply downed a cup of coffee and washed his face with cold water, thinking that he would just wait for the "see you tomorrow" press conference announced by LeEco and Jia Yueting.
Like him, many others are closely following LeEco's developments. Many media outlets arrived at LeEco's headquarters early in the morning, waiting to interview Mr. Jia and hear LeEco's explanation for the short sellers' accusations.
Mr. Jia and Mr. Yu, these two are truly in the same industry.
Both have well-known internet backgrounds and aspire to work in the new energy industry. The difference is that Mr. Yu has already achieved great success. From another perspective, isn't this a case of his peers being envious?
The media believe that this press conference will reveal the answer.
By 8:00 AM, LeEco was already trending on Weibo, and people online were clearly waiting for Jia Yueting's response.
At 8:30, some media reporters were invited into the conference room by LeEco executives, and some photos from the scene were also uploaded online.
However, after waiting for twenty minutes, not only did Jia Yueting not appear, but the reporters who had already sat down were also asked to leave the conference hall.
"Mr. Liu, what do you mean by this? Is there still a press conference today?"
"Mr. Liu, where is Mr. Jia?"
"Mr. Liu, are we meeting today? The whole internet is waiting."
A series of questions were met with "no comment" responses. After a period of confusion, the reporters were eventually asked to leave the building. LeEco's stance shifted from holding a press conference to refusing to answer media inquiries.
At 9:15, just before the stock market opened, Jia Yueting still hadn't shown up, and LeEco seemed to be in disarray, with no senior executives coming forward to explain the situation.
At this moment, Sun Hongbin of Sunac hurriedly appeared, becoming the senior executive who briefly responded to reporters. He gave a bombshell: "I don't know. I'm also waiting for President Jia. I haven't seen him yet. I want to hear his response."
A reporter seized the opportunity to ask: "Mr. Sun, you previously said that Mr. Yu doesn't understand LeEco as well as you, and that you understand LeEco better than Mr. Jia. Do you still think so now?"
Sun Hongbin glared at the reporter, waved his hand, and said as he walked away, "Let's not kick a man when he's down. I can only say I'm convinced. There's a reason why President Yu can become a major short seller."
There's a sense of despair in those words.
The reporters watching were keenly aware of the problem; judging from Mr. Sun's words, LeEco's problems might indeed be quite serious.
Sun Hongbin entered the LeEco building and then disappeared without a trace.
LeEco's press conferences have vanished, Jia Yueting's "see you tomorrow" has also gone silent, and LeEco's stock price shows no mercy.
Despite the anticipated delay in the "see you tomorrow" announcement, LeEco's stock quickly set a new record in A-share history upon the market opening, with 570 million sell orders hitting the daily limit down, amounting to 102.6 billion yuan!
LeEco's current market value is 790 billion yuan, and the market value that wants to escape accounts for 13% of that!
The market's panic over LeEco has reached its peak!
—Tomorrow, LeEco will collapse!
—The king of short sellers has proven himself once again!
Where did Jia Yueting go?
How did LeEco turn things around?
Major media outlets watched with near horror as LeEco's stock plummeted to its daily limit, reporting on the collapse of the company after its boastful pronouncements the previous day, and the movements of Jia Yueting.
At 9:50 a.m., the chaos within LeEco was clearly undeniable.
Media outlets have reported on a source's statement: "We can't get in touch with Mr. Jia right now. He did say yesterday that he would be holding a press conference today, but neither his brother nor his wife can reach him by phone. We don't know where he is."
“We don’t know where he is. We don’t know if he has returned from Hong Kong. His colleagues in Hong Kong were separated from him last night and were instructed to return first, but we don’t know his whereabouts now.”
"The company is very worried about his personal safety. We don't know what might happen to him in Hong Kong."
This statement also subtly alludes to Yu Hing in Hong Kong.
Jia Yueting was supposed to go back to the company to hold a press conference, but after making that statement, there has been no further news. Could it be related to the short sellers?
They can't just... run away, can they?
When Yu Xing, who was still in Hong Kong, received a call from a reporter, he laughed and said, "What does this have to do with me? I didn't short LeEco, nor did I restrict anyone's personal freedom. I don't know the situation. What can I say? Never mind, I'll just wish everyone a Happy New Year in advance."
Sohu reporters described Mr. Yu's response as follows: "Mr. Yu gave everyone an early New Year's gift, which was presented in the form of lighting LeEco fireworks. It was very novel and also quite groundbreaking."
LeEco was poised for a charge, but it ended before it even began.
Topics such as "LeEco collapse", "LeEco's epic stock price drop", "Jia Yueting's disappearance", and "Will we see him again tomorrow" have topped the trending searches on different platforms, and the many ambiguous details of the commercial fireworks have kept netizens entertained.
At 1 p.m., the Baixiaosheng Forum, which underwent a technical upgrade, was unblocked, and the extremely enthusiastic users caused the server to crash.
Half an hour later, employees and even executives from major internet companies, disguised as professionals, crowded together to watch the drama unfold and analyze it. At this moment, regardless of competition or factions, everyone wanted to understand how LeEco's situation had suddenly escalated to this point...
With information from an anonymous securities firm employee, LeEco's bigger problems have come to light.
Jia Yueting has pledged a lot of LeEco shares. Its warning line is below 40 yuan, and the liquidation line may be between 30 and 35 yuan. Today, LeEco shares hit the daily limit down and have reached 37.8 yuan.
Given this trend of market panic, the next trading day will inevitably see another limit down, but the price after that limit down will be 34.02 yuan, which will directly enter the liquidation line.
Can Jia Yueting provide additional funding?
Before answering this question, we may need to find Jia Yueting himself.
If LeEco cannot come up with the money, its stock price will plummet without any bottom as the pledged shares are liquidated.
"I'm going crazy. I've realized I'm really going crazy. I actually had a tiny bit of faith in Mr. Jia. Damn it, LeEco is finished."
"Awesome, daring to take on challenges, but only halfway through before disappearing..."
"The bad news is that LeEco may fall into a death spiral as its pledged shares are liquidated. The good news is that Mr. Yu has already killed it before it could fall into a death spiral."
Jia Yueting, who has been the subject of much attention online, by his employees, and by securities firms, finally showed up at 3 p.m.
Jia Yueting posted on Weibo: "I am safe. LeEco does have some financial pressure, but these will be resolved. I have confidence in LeEco and in the future of new energy. I am raising funds overseas and will return to China soon."
Upon seeing the Weibo post, Sun Hongbin immediately tried to call Jia Yueting but couldn't get through.
He had to communicate via Weibo: "Jia, please call me back. The problem needs to be solved, LeEco needs answers, the employees and society need answers, I need answers, and Mr. Yu also needs answers."
The buzz on Weibo reached a new level, drawing the attention of many industry executives who were surprised that Jia Yueting had unexpectedly gone abroad...
No, wait, they've run away!
Yu Xing, who was about to board a plane to return to Shanghai that afternoon, watched these developments with great interest, and finally posted a Weibo message before boarding: "I don't need answers."
He doesn't need answers, and life abroad wouldn't be as comfortable.
With this, the full picture of "See you tomorrow" has finally been drawn: LeEco collapsed, Jia Yueting fled, and shareholders were severely impacted. Further investigation and analysis are still needed regarding related issues.
What's puzzling is just how serious the problems at LeEco are that someone like Jia Yueting would fly abroad overnight.
When Yu Xing and his group finally returned to Shanghai from Hong Kong, the LeEco incident was still being discussed closely online, but a recent comment received almost unanimous approval on major platforms.
—The advice not to compare operations with Mr. Yu and not to challenge his bearish views has become an important guiding principle that the industry needs to follow.
(End of this chapter)