Chapter 646
Burning Money
Chapter 646 Burning Money (4k)
The Spring Festival holiday is still ongoing, and this year, Baixiaosheng Forum has seen an increase in user activity during the holiday, rather than a decrease.
On February 14, CCTV announced the list of "Top Ten Economic Figures of 2015," including Ma Chuan, Wang Jianlin, and Lu Zhengyao. Coincidentally, the following day, CBN (China Business Network) announced the "Best Business Leaders in China" awards, with Wang Chuanfu winning the top prize, Cheng Wei of Didi Chuxing receiving the "New Economy Hero of the Year," Liu Qingfeng of iFlytek receiving the "Innovation Model of the Year," and Liang Jianzhang of Ctrip receiving the "Corporate Citizen of the Year."
Because of the forum's nature, Bai Xiaosheng paid close attention to this aspect, both reposting and summarizing related news and speaking out for Dr. Yu.
After carefully reviewing the list, everyone discovered that Yu Xing was not among the similar awards announced before the Lunar New Year. While Ma Chuan, Li Yanhong, and Pony Ma may not be included in every list, they all have various honors to varying degrees.
However, Yu Xing did not acquire the Lingang double-carbon silicon granules, and considering that many of the event organizers were different institutions in Beijing, the lack of publicity in this regard was quite obvious.
The forum was abuzz with discussion, with many agreeing that domestic state media should be given a new "Best Short Seller Award".
Zhang Chaoyang of Sohu has become increasingly active in the past two years, promoting and hyping up his company's portal website's activities on Weibo. When asked for his opinion on the matter in the comments, he joked: "Mr. Yu has many more lawsuits to come, I wonder how it will turn out. If CCTV wants to award him the title of 'Best Short Seller,' it will only be if Britain actually leaves the EU."
Before the Spring Festival, Guoshanfeng released an annual outlook, which mentioned the impact of the UK's possible Brexit, but this is considered to be an extremely low probability event in the industry.
Zhang Chaoyang felt that, given the current situation, President Yu would likely have to be sidelined in terms of official and public opinion for the next two to three years.
However, no matter how much it was downplayed, when summarizing last year's major business events, China Business News still placed "Guoshanfeng's exposure" at the top, commenting that the identity of the founder of a globally renowned short-selling institution was exposed, which attracted widespread attention worldwide.
Yu Xing, who was in Haiyan, didn't care about these arrangements for so-called personal honors. He welcomed Zhong Zhiling, Lü Haiying, Liu Chiping and others in the small town one after another, and gradually returned to work.
On Monday, February 15th, the stock market reopened. LeEco, which had failed to produce anything substantial during the Spring Festival holiday, once again experienced a crazy opening with a limit-down, with its stock price falling to 34.02 yuan. Some of the pledged shares officially fell to the liquidation line.
LeEco applied for a temporary suspension of trading, but the Shenzhen Stock Exchange did not approve it.
The list of institutions involved in Jia Yueting's pledged shares has been completed, including 10 securities firms, 1 trust company, and 2 banks, such as Guotai Junan Securities, China Development Bank Securities, and Ping An Trust. The pledge ratio is not the 77% previously announced, but a staggering 99.54%.
In other words, Jia Yueting had already pledged all his shares. He had previously claimed that the pledged funds were for the development of LeEco, but it has now been proven that only a small portion of these funds were transferred to LeEco, and the rest disappeared through various related transactions.
As is customary, the institutions have requested Jia Yueting to replenish funds, but this has been ignored, leaving them with no choice but to force liquidation.
However, following the record-breaking 570 million sell orders in the previous trading day, the sell orders at the daily limit down reached a new high of 642 million on this trading day!
It can't be leveled out, it's impossible to level it out!
With LeEco's collapse compounded by the influence of short sellers, everyone now knows that LeEco is dead, and everyone knows that Jia Yueting has fled.
Furthermore, given this seemingly endless downward trend, there will inevitably be a shortfall after institutions liquidate their positions, and this shortfall will also need to be recovered from Jia Yueting. Some securities firms are already requesting the freezing of his personal assets.
Sina, Sohu, Tencent and other well-known websites have compiled and reported on this situation, allowing domestic netizens to see firsthand the aftermath of Guo Shanfeng's short-selling case. In the past, people only focused on the market value evaporation after a company's fraud was exposed, but this time they saw the whole picture.
The only problem is that Jia Yueting is too shrewd. He actually left Hong Kong overnight. It is said that he had already purchased assets abroad. Obviously, he had made two preparations when he was making up the story.
While people outside were talking about LeEco and Jia Yueting, Zhong Zhiling, Lü Haiying, and others who had arrived in Haiyan naturally couldn't avoid discussing this matter during their casual conversation.
Liu Chiping joked, "Mr. Yu, I might see him again next time I'm in Los Angeles. Is there anything you'd like me to pass on?"
Yu Xing shook his head: "His wife and children are all in China, what can I say? Hmm, if you really meet him, just say that I didn't originally plan to raise any questions about LeEco, but he came to me himself, and I couldn't help it."
Liu Chiping asked in surprise, "Really? Is that really true?"
If that's the case, then Jia Yueting has simply ruined his comfortable life himself.
Yu Xing smiled slightly: "Of course it's fake."
Liu Chiping: "..."
As expected, the big short sellers could never be on the side of goodwill; at a time like this, they still want to stab people in the back.
Liu Chiping has many feelings about this matter. He had met Jia Yueting on different occasions in the past. LeEco, as one of the most profitable video websites in China, had also been the subject of some research by Tencent.
At that time, everyone was wondering how LeEco could stand out from the crowd when the industry was so competitive and burning money.
Looking at it now, there's a lot of hype involved. If we remove that hype, LeEco might not have been able to go public.
Liu Chiping's frequent travels between China and abroad have a more profound impact on the short sellers and related public opinion. After much consideration, he gave Mr. Yu a serious reminder before traveling from Haiyan to Shanghai.
"Mr. Yu, Tesla is being shorted overseas, and I've seen some foreign institutions even criticizing Silicon Carbon Group as well."
Tesla has recently been under attack from short sellers, with short positions reaching 34 million shares in February, representing 29.7% of its outstanding shares. This is the highest level since Tesla went public, making it the third most shorted company in the Russell 1000 index.
This unprecedented scale of short selling triggered a fierce battle between bulls and bears.
On the one hand, Tesla's long-standing production capacity issues have not been effectively resolved. On the other hand, it has been impacted by the continued decline in international oil prices, leading some analysts to worry that demand for electric vehicles will shrink. In addition, Tesla's cash flow has also become a problem.
在这样的背景之下，特斯拉的二月股价从月初的196美元一度在前几天跌到143美元，8号的时候单日暴跌 9%，创2014年1月以来的最低，10号的时候创下52周最低收盘价，较2015年年底的240美元已经暴跌40%。
Tesla, which seemed to be in dire straits, has just shown some signs of recovery in the past two days, and today it climbed back above $150, but this is still a significant drop compared to its previous share price.
Citron Research believes Tesla will fall below $100 by the end of the year and is continuously criticizing its three major problems: production capacity, finance, and management. The more famous short seller Chanos has repeatedly reiterated his bearish view at the Reuters Global Investment Summit, believing that Tesla is heading towards a dead end, with excessive leverage and a worrying profit outlook.
It's worth mentioning that while Tesla was being shorted and attacked, a certain Eastern new energy vehicle company that was going through the IPO process was also intentionally or unintentionally criticized.
"Electric vehicles may have a future, but they won't win in the present, and the same goes for range-extended vehicles that are marketed as new energy vehicles." "Last year, the Chinese market saw a surge in new energy vehicles, mainly range-extended vehicles. However, this is an unsustainable industrial path under cash subsidies. The investment and capacity expansion of the Carbon Silicon Group are very aggressive, lacking profit support, and the asset chain is at great risk."
"I don't have a good opinion of Tesla, nor do I have a good opinion of Silicon Carbon Group. In fact, I don't really know much about Silicon Carbon Group. But if even Tesla is like this, what about a car company that launches a hybrid electric vehicle?"
Silicon Carbon Group is still on its roadshow. Because it is listed in Hong Kong, it is mainly targeting global funds and naturally has to face overseas opinions.
This month, as Tesla's stock price continued to fall, the roadshow for Silicon Carbon Group did not receive the expected positive response.
Yu Xing thanked Liu Chiping for the reminder and also helped to supplement the views of more foreign institutions, not only those short-selling investment banks, but also some investment banks that did not recognize the future of Silicon Carbon Group.
"When stock prices go up, it's definitely good. If they really don't go up, we can only focus on the market."
Seeing his boss's composure, Liu Chiping suddenly asked, "Mr. Yu, when you say 'doing marketing,' do you mean the automotive market or the stock market?"
The allegations of market manipulation, which surfaced after the mountain peak was exposed, have become the main charges against Yu Xing.
Yu Xing shook his head repeatedly: "Of course it's the automobile market. I firmly oppose market manipulation."
Liu Chiping had no doubts at first, but now he had no choice but to have them.
Seeing that his boss was aware of the situation, he joked, "Mr. Yu, if all else fails, why don't you join us in making MusVid? The overseas market is vast, and we're not afraid of mysterious funds entering the market. Luxembourg, offshore islands—MusVid isn't afraid of money getting burned!"
Yu Xing just smiled and didn't comment.
Another drawback of the exposure of the peak is that everyone thinks the big short seller has a lot of money. Sometimes the internal meetings of the silicon carbon group need to increase the budget, and there are also frequent calls from outside trying to take advantage of the situation.
The judicial authorities are still investigating and trying to uncover illegal funds, but others don't care about this money or that money; they only think about the big short sellers giving them money.
Yu Xing also spent a little money. Although he refused the event request from Haiyan this Spring Festival, the scholarship for education was increased, and his alma mater also increased its donation. As for more public welfare areas, he doesn't trust the organizations that have approached him. He has considered finding someone to handle it, but it hasn't been put on the specific agenda yet.
Regardless, the major lawsuits and investigations are not yet over, and the use of funds should remain discreet and restrained.
On February 17, following Liu Chiping, Lü Haiying, Zhong Zhiling and others returning to Shanghai, Yu Xing and his family also drove back to Lingang, ending a rather quiet Spring Festival.
Before the work here had even officially started, and before Yu Xing had even taken a tour of the production line, a call came in from an old friend.
"Yu Xing, do you mean we should just keep burning it like this?" Ma Chuan's tone on the phone was harsh and direct.
“Mr. Ma, you are now…” Yu Xing said, dissatisfied, “Can I put it this way, you have no manners at all now. I still call you Mr. Ma, but you call me like this?”
"The king of short sellers has money, right? So TikTok is burning money like this, right? How long do you plan to keep burning money?" Ma Chuan asked sarcastically.
While Yu Xing was busy with the listing of Silicon Carbon Group in Hong Kong, Leyin, Weishi, and Douyin launched a price war before the Lunar New Year, with red envelopes and "collecting blessings" promotions. In terms of form, they did not go beyond the scope of the previous fierce competition between WeChat and Weichat, and truly benefited users.
“Mr. Ma, Douyin was forced to respond,” Yu Xing said. “Weren’t you the ones who started it first? Now you’re asking me when it will stop burning, which is very strange.”
The music started, Weishi followed on the same day, Douyin responded the next day, and the battle continues to this day.
These three companies are burning through cash and their scale is constantly increasing, which is said to put a lot of pressure on Kuaishou.
Ma Chuan was quite arrogant: "Then let's burn it from this Spring Festival to the next Spring Festival and see if we can burn out the king of short sellers' hard-earned money."
In the eyes of the country's top tycoon, the amount of money earned from short selling is also limited. From this point of view, the world's top billionaires naturally have the confidence to make such a comment.
Before Yu Xing could even praise President Ma, he heard the phone call end.
The phone call from Tencent was much milder compared to Alibaba's imposing tone.
Ren Yuxi and Pony Ma called one after the other. The former talked about the competition among the three short video platforms but did not receive a positive response. The latter included the cooperation with Pinduoduo in the communication.
Pinduoduo's business model is an unexpected breakthrough in the past e-commerce landscape.
The better it develops, the more Pony Ma values commercial operations from Lingang, and even his feelings about Liu Chiping's departure have become somewhat indifferent.
Pony Ma talked about Pinduoduo for a long time before finally mentioning the current cash burn.
"Mr. Yu, burning money to compete may help expand the user base of short videos, but it is by no means a virtuous cycle."
Yu Xing sighed: "Pony, you should be talking to Alibaba about this. You are both large listed companies, and we in Lingang are under a lot of pressure. I am on the defensive, and you two are coming on strong. What do you mean by this? Are you telling us to surrender?"
“Alibaba is very generous now; they’ve announced a 100 billion yuan warm-up plan,” Pony Ma said. “They’re at their peak, and we have to thank Mr. Yu for selling WeChat to them back then.”
This is Alibaba's freshly released sound on Music, aiming to become the number one short video platform.
“What’s past is past,” Yu Xing said. “If Alibaba won’t give up, then let’s all keep throwing money around and wait for the higher-ups to intervene in this massive spending spree.”
Pony Ma suddenly laughed and said, "Mr. Yu, have you ever considered selling some of your shares in Silicon Carbon, including your shares in Pinduoduo, just like when you sold WeChat to Alibaba, taking advantage of the volatility in the US stock market to launch a counterattack against Alibaba?"
Upon hearing the suggestion, Yu Xing clarified: "First of all, there was no intention to target Tencent. Secondly, Pony, you need to be mindful of compliance with regulations in your suggestion. Finally, it might also make Alibaba aware of everyone's anti-war sentiment, at least enough to intimidate them once."
(End of this chapter)