Chapter 961 Fierce

Fang Zhuo did not expect that Kong Yu would give him a cruel suggestion.

This Chinese New Year, don’t you have some peaceful festive atmosphere?

In order to deal with the threat of Nokia's patent competition, Fang Zhuo thought outside the box and settled the final decision-making referee if the patent lawsuit could not be resolved. He came up with the idea of ​​bundling customer funds with Yike's stock price.

The ultimate goal is to protect Yike's US mobile phone market, and of course, to take advantage of the short sellers.

But after all, he is not a professional. He is good at finding referees, inside information, bundling interests, making friends, and seeking win-win results. The specific operational details and pre- and post-processing all require professionals.

Kong Yu is very professional.

After receiving the boss's idea, he had only one direction of thinking: how to maximize benefits.

In Europe a while ago, while Kong Yu inspected the financial situation there, he also had close contact with the parties involved in the Volkswagen short squeeze case involving Porsche. He learned from this experience and made further corrections to the trader Yike.

Fang always has to deal with options locking in tradable shares and the command office overturning the ban together.

But Porsche's initial short squeeze did not have the benefits of a desperate comeback like "overturning the ban."

How does Porsche do it?

It has absorbed Volkswagen shares since 2005 and wants to seek control of the German Volkswagen Group. There is a hurdle in the middle. Germany has specially established a "Volkswagen Law" to protect the Volkswagen Group, which clearly stipulates that only 80% of the shares can be obtained to gain control.

However, the German government holds 20.1% of Volkswagen shares, almost cutting off the possibility of changing hands from the source.

Porsche does not believe in evil and spent more than two years suing in the European Court of Justice, accusing the Volkswagen Act of violating the EU's Fair Trading Act. It finally overturned the German law at the end of 2007 and achieved a 75% holding bottom line, which means it no longer needs Consider government shares.

However, as Porsche pushed up Volkswagen's stock price in the process of acquiring shares and fighting lawsuits, a large number of funds smelled an overvalued market value and came to hear the news.

Is the Volkswagen stock price reasonable? unreasonable.

Is Volkswagen’s valuation multiple high? high.

Can you win by short selling? Um……

Porsche has anticipated the fierce short-selling wave and has been well prepared to secretly lock in 31.5% of Volkswagen share call options, plus 42.6% of its publicly held shares, for a total of 74.1% of its disposable equity.

The key to this step is that options are financial derivatives, not spot stock sales. They are sales contracts that agree on a price within a certain time limit, so they are not subject to public disclosure regulations.

In the financial market at this time, Volkswagen's total short orders accounted for 10.4% of the total share capital, but only 100-74.1-20.1=5.8% of the circulating shares on the market remained.

In other words, the short side has a gap of 10.4-5.8=4.6%.

When Porsche chose to announce the news on Sunday, a breathtaking short squeeze occurred the next day.

Volkswagen's share price rose from 200 euros to 1,005 euros in two days, with a market value of more than 300 billion euros, making it the world's most valuable company.

In the end, under the leadership of the Frankfurt Exchange, Porsche delivered 5% of its shares, which alone brought 3 billion euros in cash.

According to statistics, the losses of short sellers in this wave exceeded 20 billion.

Now, based on Kong Yu's observation, speculation, and thinking, Yike has come to a situation similar to that of public stocks.

European and American markets lead 3G smartphones, and China has opened up the 3G market and initially realized its potential. This is a big plus for Yike's stock price.

At the same time, Yike is caught in a patent competition with Nokia, the mobile phone overlord. The latter has sued the ITC to ban sales, which is a big negative.

The game of good and bad gives Yike's stock price room for profit.

The time when this profit margin can really be maximized is before ITC announces the ban.

Once the ban is promulgated, Yike's stock price is bound to plummet. That is the moment for short sellers to gain, but they also face risks.

What if Nokia and Yiko reconcile?

What if Nokia loses the patent lawsuit?

The latter is not considered for the moment. The former is the final result of many patent lawsuits, which often ends with a high compensation for one family.

How to prevent Nokia from settling with Yike and how to obtain ITC's internal opinions as early as possible is crucial from the short side's perspective.

But in Kong Yu's view, it's very simple. No matter what Nokia decides, everyone on Yike's side will be happy if they show confidence and a tough attitude from top to bottom.

As for whether ITC will reveal enough information in advance to create a larger scale of shorts...

Kong Yu felt that the profits here were enough for many people to use their resources, and Mr. Fang was very familiar with that unfair practice.

In this case, regardless of whether the general office will overturn the ban, let's learn from Porsche's option lock to complete a short squeeze.

When this wave of short squeeze ends, Yike still faces the ITC ban and still cannot solve this big disadvantage.

The maximum time for this ban and the overturning power of the General Office to be implemented is 60 days. During this period, better sales performance, true and false huge royalty settlements and other news can be used to push up the stock price again, thus creating profits again. space.

The short sellers in the previous round can take revenge, and the new short sellers can pursue profits.

As for the eventual change from negative to positive, it depends on whether Xiao Ao and the others are willing to lose money.

Anyway, Kong Yu already knew that Xiao Ao had gathered a group of former classmates and friends around him, including senior executives of certain companies, all waiting to help the new boss and share the money.

And what was a reversal from the command office?

It was just billions of legal profits, and it was just assets whose customer funds had doubled again and again. Could it be compared with the disposal of hundreds of billions or trillions of toxic assets?

Geithner and others were ready to get involved in even these, and the ban seemed even more frivolous.

Of course, these assumptions still need a lot of details to be improved.

For example, Xiangjiang Huanyu, which still holds 5.16% of Yike’s shares, is a shareholder who participated in Yike’s A round of financing and bought back the shares after the listing. Its existence cannot completely guarantee the formation of the first wave of run space.

There is a run here, and Xiangjiang Huanyu is asked to deliver stocks or it sees that the profit is too large and directly cashes out, then it will collapse, and it can only... cut the next wave.

Kong Yu even thought that even the shares held by Shenxin Kechuang should not be retained, so as not to cause additional risks.

When he talked about this with Mr. Fang one by one, he found that the boss who had been thinking about it hesitated.

"Mr. Fang, you can't be soft-hearted." Kong Yu immediately advised.

He knew the relationship between the boss and the head of Shenxin Kechuang, but from the perspective of the trader, this risk was unnecessary.

"I trust Brother Wang very much." Fang Zhuo said so.

Kong Yu frowned and advised again: "Mr. Fang, you have to think about the new production line."

Fang Zhuo was silent for a long time.

Forget it, who won't suffer a little grievance in life?

There will always be a chance to make up for it in the future. Shenxin Kechuang still holds shares in Penguin. At the end of this year or next year, Yike will have a head-on battle with Penguin with the development of the Android system.

Fang Zhuo did not speak, and signaled the gasoline man to continue.

Kong Yu understood the boss's decision, and admired in his heart that this was the Mr. Fang he knew. Then, he talked about the legal risks of these two waves of short squeezes.

It will be legal in terms of procedure.

Just like Porsche's short squeeze, even if the German Financial Supervisory Authority intervenes in the investigation, all actions are legal.

However, even so, there will be trouble afterwards.

Kong Yu is very clear about the movements in the financial circle. Now there are several hedge funds preparing to join forces to file a lawsuit in the US court on the grounds of suspected fraud, market manipulation, secret position holding, manipulation of Volkswagen stocks, etc.

Can the lawsuit be successful?

Not very optimistic. Even if it succeeds, it may only make Porsche lose a little money, which is somewhat relieved.

Dongdongdong, Dongdongdong, Dongdongdong.

The knock on the door in the office rang three times, and the guests who had made an appointment were repeatedly postponed.

It was not until nine o'clock in the evening that Kong Yu finished a comprehensive report and sorting.

Even Fang Zhuo couldn't help but sigh: "It seems a bit fierce this time."

Kong Yu did not refute, but a little bit.

"Let's go and have some food." Fang Zhuo has been listening to Mr. Kong's report, and the two of them didn't even have dinner.

"Mr. Fang, you have guests, and Mr. Ni is also an old friend, so you don't have to greet me." Kong Yu stood up and declined, "My family must have left dinner for me."

He had a rare rest time.

In Shanghai, it was particularly quiet, and the fighting and killing in the financial circle seemed to be completely far away.

Kong Yu liked this feeling very much.

Of course, he also liked the feeling of profiteering, and sometimes the bloody smell of fighting and killing would come out of his heart. My name can't be shown in the financial storm, this time it will be okay, right?

Fang Zhuo sent Mr. Kong to the door of the office.

At this time, Kong Yu suddenly turned around and said arrogantly: "Mr. Fang, I can bring the first production line, and naturally I can also bring the second and third."

Arrogant!

This was the first time he was so arrogant in front of his boss!

Fang Zhuo was a little surprised, vaguely remembering the way Kong Yu walked into the office with a gasoline barrel.

At that time, he thought he could do it, and now he really can do it!

Like a fish in water, like a fish in water!

Fang Zhuo patted the gasoline man's arm and said with emotion: "Boss Kong, there are two kinds of ideals in this world. One is that I realize my ideal, and the other is that the ideal is realized through me."

"If I hadn't met you, how could I realize my ideal? My ideal can only be realized through you."

This is the highest praise Kong Yu has heard since he met Boss Fang.

Ni Runfeng over there was already walking quickly in the corridor.

Kong Yu shook Boss Fang's hand, nodded silently, left the president's office of Hang Lung 23, and went downstairs to realize Boss Fang's ideal.

…

"Sit, sit, sit."

"Old Ni, have some tea first."

"Have you eaten? Oh, I'll order you some dinner, you eat first."

Fang Zhuo sent the gasoline man away and welcomed his old friend.

But he still needed to slow down, and also sorted out the report from Kong Yu in his mind.

It happened that Ni Runfeng really didn't have dinner, so he had a simple dinner in the president's office of Yike, which was difficult to be kind but also observed the mood.

When Fang Zhuo sorted out his thoughts and locked Mr. Kong's handwritten draft in the safe, he saw that Lao Ni didn't eat much.

"Lao Ni, you can't eat now."

Ni Runfeng waved his hand: "I drank yesterday, and I got angry today. My throat hurts, as if it was cut by a knife."

Fang Zhuo thought for a while: "I should have ordered you a bowl of noodles earlier, just in time for you to eat knife-cut noodles."

Ni Runfeng: "...You know how to find joy in adversity."

His visit this time was based on an appointment with Mr. Fang yesterday to talk about creating his own mobile phone brand. Now it has officially started and is expected to be launched in the domestic market in the second half of the year.

Now I am taking advantage of the annual meeting of the Yi Ke Department to seek some more opinions.

Fang Zhuo and Lao Ni exchanged a few pleasantries and then got down to business: "The mobile phone supply chain is gradually maturing, and the pace of this gradual process is actually very fast. Last time I heard that you meant to make entry-level Android smartphones."

"There is no problem with this idea, and the positioning is very accurate."

“Entry-level phones focus on cost-effectiveness while ensuring basic quality.”

Fang Zhuo said a few words like this, and then took the initiative to say: "Old Ni, Yike can invest in your mobile phone brand."

Ni Runfeng suddenly heard this sentence, and his heart moved slightly: "Mr. Fang is willing to invest, and I am 100% willing. I know that Hanwang and Meizu are also making Android phones, but I don't seem to have heard that Yike has such cooperation with them."

Fang Zhuo was very open and honest in talking about these things, and revealed a piece of news: "Yike originally had a plan similar to an entry-level phone, but Qualcomm's chips did not go as smoothly as expected. This plan is being re-discussed and may be postponed."

Under this situation, Yike needs a product that occupies the entry-level phone position. Hanwang, Meizu, and Lao Ni are all within Fangzhuo's consideration, but the first two have existing systems, and Lao Ni is easy to shape.

Fang Zhuo and Ni Runfeng are old friends and know each other well. There will be no problems in cooperation. Even his son is still working in Yike, so it is easy to communicate various opinions.

Even if the entry-level product does not achieve the desired results, it will not damage Yike's brand recognition.

The realization of the domestic market is a little faster than expected. Now Yike does not have to rush to launch newly positioned products. It can use the method that Fang Zhuo is talking about to sink the market. After all, the first generation of Mars and the initial launch of 3G were misaligned. It sinks only once.

"Then if Yike launches products with this positioning in the future, what should I do?" Ni Runfeng asked a question.

Fang Zhuo nodded: "Fair competition."

Ni Runfeng thought about this fairness, the fair competition between his godson and his biological son... They are different in stature, and the price alone is two different things...

But then he thought about it, what if Yike invested money and resources in other companies with similar positioning?

The future is a matter of the future, now we must survive first.

Ni Runfeng didn't spend too much time thinking. He stretched out his hand: "Mr. Fang, I trust you. To be honest, I am a little surprised that you are willing to vote today."

Fang Zhuo threatened: "If you are so shocked, then I will vote for someone else."

Ni Runfeng smiled and said, "I'm flattered."

He suddenly remembered what Mr. Fang once talked about about how to deal with a giant joining the same track. Yi Ke now also has the appearance of a giant. This and the feeling of facing this are completely different things.