Chapter 71. Breaking News is Always Welcome (2)

[First, just publish the report, and we can post a proper article before the event ends.]

"An event?"

[In four days, there will be a Purecell Day event in Alabama. I'll send you a press invitation, can you come?]

She barely managed to hold back a cheer.

"Really? Then, I'll check the flight schedules first."

'How much is left in my bank account?'

[The flight and accommodation will be provided by the organizers.]

With that, there was no need to hesitate.

"Sure, sure! I'll come! I'll leave right away!"

* * *

Trish O'Connor, a journalist at The Wall Street Times, published the report and article from Continuum Capital on the website.

Given that it was written by an unknown journalist from an internet news outlet and an unnamed hedge fund, it was surprisingly ignored by everyone.

We moved to a larger room.

The hotel room had transformed into a trading room with multiple computers and laptops lined up.

David joked,

"It's a shame we don't have a Bloomberg terminal."

"We don't need one right now."

After all, we only have one stock to trade.

Now, we need to decide on the investment strategy.

If we expect the stock price to rise, we should buy the stock or invest in call options. If we expect it to fall, we should short sell or invest in put options.

Morris Pearson made calls to various places to research and buy Thomas Motors put options. He bought all the available put options, but the volume wasn't very high.

Since Thomas Motors isn't a major stock in the market and there was no demand, the issuance volume was necessarily low.

We need to buy as many put options as possible and proceed with the rest through short selling.

It's impossible to make more than 100% profit through regular short selling, but there are other ways.

I casually suggested,

"What about CFD trading?"

David looked surprised.

"Are you serious?"

CFD (Contract For Difference) is a differential settlement trade.

Instead of buying or selling stocks directly, you only need to put up a margin, and the financial company will handle the buying or selling for you. The investor then takes the profit or loss from the trade.

With a 10% margin, you can place an order, allowing for a 10x leverage. This can provide even greater leverage than most options.

The problem is if the stock price moves in an unexpected direction.

If you short sell with 10x leverage, a 10% increase in the stock price will wipe out all your investment.

"Surely the person who wrote the report isn't uncertain?"

He gave a bitter smile.

"I am confident that Thomas Motors is a fraudulent company. However, I'm not sure if people will believe it."

"Have confidence."

David Rockheart is considered one of the best investors over the past decade.

In terms of ability, I should be working under him, not the other way around. In fact, I wouldn't even have the opportunity to work under him.

He was branded as a failed investor despite warning the company multiple times. However, he turned his reputation around with a single report.

This is that report.

I looked at David and the employees and said,

"Musicians want to perform well, and athletes want to set good records."

There's no great reason for this.

It's simply part of their job.

"Similarly, investors should aim to make as much profit as possible when an opportunity arises. Do you think such a good opportunity will come again?"

Actually, there will be many more, but I didn't say that.

"I don't mind losing all this money. If we're going to invest, we should do it properly. Let everyone on Wall Street know what Continuum Capital and David Rockheart are about."

David looked at me.

"Are you really sure?"

"Yes, I'm sure. Show everyone what we can do."

He nodded, as if making a decision.

"Understood."

* * *

Fang Shuhuan, the CEO of Huaan Energy.

He started as a salaried employee and rose to the position of CEO, embodying the myth of the salaried worker.

After Huaan Energy separated from the holding company, he led the company with stable organizational management.

In fact, his style was good at maintaining the status quo but not suitable for new initiatives.

However, it wasn't a big issue.

The new industry initiatives were handled by Team Leader Xu Minxiong.

He acted as a mentor.

Team Leader Xu Minxiong would likely become the CEO when Fang Shuhuan retires.

Since it was a predetermined process, there was no complaint. As long as he could continue to earn a salary as the CEO of a subcontractor after retirement, that would be enough.

'Is Xu Minxiong doing well?'

He was currently in the U.S. to sign a business agreement with Thomas Motors. This agreement would be packaged as his achievement and announced to the public.

The PR team had already prepared the press release, which they planned to send to the media after the agreement was signed.

While waiting, he received a call from Xu Minxiong.

"Is everything going well in the U.S.?"

In response, Xu Minxiong urgently said,

[Sell all Thomas Motors stock immediately.]

"......What?"

Huaan Energy is a major shareholder with 4.3% of Thomas Motors stock.

They had already made a 15x profit, but there were discussions about buying more for future collaboration.

'What does it mean to go to sign an agreement and then sell all the stock?'

CEO Fang Shuhuan, not understanding, asked,

"Isn't that a bit strange?"

[Check the materials I sent you and get back to me immediately.]

He hung up and immediately checked his email.

It was a report analyzing Thomas Motors.

Although it was written in English, CEO Fang Shuhuan, who had lived in the U.S. for a long time, could read it without help from his staff.

He read the report carefully.

Thomas Motors had no technology for hydrogen production, transportation, or hydrogen vehicle manufacturing, and everything they had announced was a deception.

CEO Fang Shuhuan called Xu Minxiong back.

"Are you telling me to sell based on this report?"

[Yes.]

"Isn't this kind of report common in the market?"

Thomas Motors was Huaan Energy's most important partner. Therefore, he had read all the reports available in the market.

Those who bought the stock wanted the price to rise, and those who sold wanted it to fall. It was common for such sell reports to appear in the market.

While there were many reports criticizing Thomas Motors' technology, they had little impact on the stock price.

[It's all true.]

"......What?"

[Everything mentioned is true, and I have evidence.]

"Wait a moment. So, the car rolling down the hill......?"

[Yes, I confirmed it myself.]

"......"

CEO Fang Shuhuan was momentarily speechless.

'Really, the car rolled down the hill? Is that even possible?'

It was so far beyond common sense that he couldn't believe it.

After a moment, he regained his composure and asked,

"What does Thomas Motors say about this?"

[There's no need to listen to them. It's all lies. When I tried to inspect the new car they were going to reveal at the event, they wouldn't even let me near the vehicle.]

Huaan Energy's stock price had continued to rise despite the losses in its main business, solar energy.

There were two reasons for this.

First, the value of the Thomas Motors shares they held had increased, and second, there was high expectation for the hydrogen infrastructure business.

However, if it became known that Thomas Motors, their hydrogen infrastructure partner, was a fraud?

The stock price would plummet.

CEO Fang Shuhuan felt the gravity of the situation.

Still, Xu Minxiong was part of the owner's family. Even if there were problems, he could return to the group.

But for a salaried CEO, once fired, it was the end.

"What should we do?"

[First, sell all the stock before the event. Not a single share should be left.]

Selling all Thomas Motors stock would be a declaration of withdrawal from the hydrogen infrastructure business.

The hydrogen infrastructure business was linked to Huaan Solutions and the holding company, Huaan. If this collapsed, the entire group would be in chaos.

"Shouldn't we discuss this with the group companies over time?"

Xu Minxiong said urgently,

[We don't have time. This report has already been publicly released through the media.]

CEO Fang Shuhuan was shocked.

"Really?"

[Yes, fortunately, the evidence is missing.]

"Then, where did you get the evidence?"

[We'll discuss the details later. What's important now is that we might be held responsible. Selling and withdrawing immediately is our only way out. At least we can save some money, right?]

Selling all Thomas Motors stock would bring in about $1.7 billion, or over 1.9 trillion won.

This amount of cash would be enough to defend against a stock price drop.

"What should we tell Huaan Solutions?"

The shares of Thomas Motors were jointly purchased by Huaan Energy and Huaan Solutions. Huaan Solutions also held 4.2%.

Xu Minxiong said as if he had been waiting for this.

[We should inform them. Send an official letter with the public report attached, suggesting they sell. Then, their vice president will report and make a decision, right?]

The vice president of Huaan Solutions was the chairman's eldest son, the most likely candidate to become the next chairman.

'Really, if there is evidence, why not send it? Is it okay not to explain the situation accurately?'

As he thought this, Xu Minxiong asked,

[Whose side are you on, sir?]

"......What?"

[Listen carefully. If this blows up, both of us will be finished. It doesn't matter whose side you were on before, but now you need to be on my side.]

The CEO is also a salaried worker, and the most important thing in a career is survival.

[Someone will have to take responsibility for this. Who do you think it will be?]

The hydrogen energy business is a joint venture between Huaan Energy and Huaan Solutions.

From the public's perspective, they might seem like the same company, but they are distinct entities.

Once the business agreement is terminated, someone will have to take responsibility. When the issue arises, there will be a battle over who is responsible.

However, if Huaan Energy notices and avoids losses while Huaan Solutions incurs losses?

CEO Fang Shuhuan said firmly,

"Understood."