What's wrong with me being a rich man?

Chapter 179 Only Reckless (5k)

King Cobra Research.

At one o'clock in the morning, four executives from the Paulson Advantage Plus Fund stood in their boss' office and saw a name that was hard not to be impressed.

At the very least, this is a poisonous snake that devours sleep!

After reading the research report from this emerging short seller, they had similar feelings in their hearts: bad!
Now, this is a poisonous snake that devours money!
This is worse than before!
Paulson Advantage Plus Fund currently holds approximately 2600 million shares of Sino-Forest, valued at more than US$5 million. Assuming the contents of this research report are true, the final outcome of Sino-Forest can only be delisting, and the relevant responsible persons will also be held accountable for legal liability, and the stocks in its hands are likely to shrink by % to %.

Losses could exceed $3 million...

Who will take this responsibility?

The four people had already turned to the last page of the research report but still did not say a word. However, they had already seen the boss's furious eyes out of the corner of their eyes. This was not difficult to understand; if the loss was $3 million, the boss would have to keep more than $1 million of his own.

However, without looking at his eyes, one could already tell Paulson's mood as soon as he entered the office and saw a watercolor painting that was originally hanging on the wall thrown haphazardly on the ground.

"Perhaps we can talk to this KCR." Vice President Smith finally spoke up and offered a solution other than the report. "I heard that this is an Asian organization."

Another vice president, Aaron, denied this statement without hesitation: "No, it won't be an Asian institution, it must be American or European."

Smith was puzzled: "Why?"

Similarly, Paulson also looked over here.

Aaron turned to the first page of the research report and pointed to "deceit remaineth forever". He said: "The wording in the report is very sophisticated. Remaineth is Old English. Modern English should use remains. This is an ancient expression in religious texts, which makes the sentence more elegant and solemn."

"Deception is everlasting. You see, this tone is more like conveying a truth that exists in the world. However, it is written at the beginning of a short-selling report. Deception is everlasting. Short-selling is judged. It's like this organization is conveying its philosophy!"

"I don't think an Asian organization would have such details. At least, the key figures here are from Europe or the United States."

Aaron talked eloquently, even showing appreciation unconsciously.

Everyone in the office felt that this inference made sense.

Paulson walked slowly and came in front of Aaron.

Aaron responded with a look that was both stoic and innocent, but it quickly turned awkward as his boss' eyes got closer and closer to his own.

Paulson's face approached the vice president's face until he was less than ten centimeters away, and he stopped, spitting out anger: "Did I ask you to come here to study this?"

Aaron remained silent.

Paulson glared at them one by one and said, "Do you think I didn't expect it? There was no response to the emails I replied to!"

He had tentatively replied to the email before his subordinates arrived, but Guo Shanfeng did not respond.

Vice President Smith whispered, "The current situation is very clear. This KCR agency has set a time for short selling and has no intention of communicating. It just wants us to choose how to deal with it. However, this is just a choice that is not a choice."

Paulson walked to the window again and looked down at New York in the dark.

He had thought about this problem when he was alone. Guo Shanfeng sent the report that was about to be made public to himself, a shareholder, in advance, simply to force him to dump the market together and let the other party make more profits.

But one has to take action, otherwise the loss will occur, which is unbearable.

What if you sell in advance?

Paulson had considered this operation, building a short position while selling at a loss earlier than the time when the peak was announced.

The problem is that even if he crosses the mountain peak, it will still be made public, but his action of running away early is too obvious, which undoubtedly tells the world through action that he has obtained inside information.

Although Paulson made huge profits by taking advantage of the financial crisis in the past two years, he was also aware that many people were watching him, and as long as the funds under his management showed such obvious movements, they would definitely be investigated.

Even more, if you sell at a loss ahead of time, the email records can be made public afterwards, and it will be difficult for you to confront them, which will be troublesome again.

Even more... Even if you don't sell your stocks in advance, Guo Shanfeng might make your email records public, which will cause some problems. However, compared to the public profit from "breaking the contract", secretly building a short position can avoid investigation.

After thinking about it over and over again, there is actually only one path that can be taken - secretly participate in short selling, wait for the report to be released by Guo Shanfeng, and then quickly sell at a loss to minimize losses.

At this time, O'Brien, who had been silent, made a suggestion: "Should we talk to Chandler and Davis? We all have enough influence and can move forward and backward together, and KCR is just a small organization."

Paulson looked back at the directors of his own fund in disbelief and finally understood why they had made such a foolish research judgment on Sino-Forest!
Because a stupid leader will inevitably lead to a stupid team!

He tore off a watercolor painting at hand, crumpled it into a ball and threw it at O'Brien, shouting, "Get out!"

O'Brien turned around awkwardly, left the office and closed the door gently.

Two of the twelve watercolors from famous artists were killed, which meant that the boss was in a worse mood than he let on.

Vice President Smith took a breath, discussed other possibilities of the mountain's established direction, and said seriously: "Now that the Sino-Forest matter has come out, KCR must be ready. If we follow the method it has outlined for us... Of course, we can, but we can also use these few days to temporarily suspend Sino-Forest's shares."

Paulson looked at Smith and said, "Go on."

"It's not that there is no way to stop KCR from shorting." Smith said carefully, "As long as the stock is suspended, KCR's research will lose its effect. The stock has no liquidity, and the duration of the suspension..."

“There are a lot of things we can do.”

"The core conclusion of KCR's investigation is that Sino-Forest's assets are fake. What it provided is inflated. What if we fill in the inflated amount?"

"With Chandler and Davis, our combined shareholding exceeds 38%. We can work together to find opportunities for asset restructuring. For example, Weyerhaeuser is not only one of the largest private forest owners in the United States, but also has more than million acres of long-term licensed forestland in Canada."

“The assets of Sino-Forest need to be re-audited, but under the threat of the KCR investigation, Chen Deyuan and his group will inevitably compromise and eventually sell the company. Otherwise, they will face jail time.”

"The suspension of trading buys us time to operate and use our collective resources to restructure our assets. Hopefully, our discount will be repaired with the economic recovery in the future, and we can get new growth."

Smith also mentioned the connection with Chandler and Davis, the two major shareholders, but what he came up with in a short period of time was a framework for solving the problem.

Fight and eliminate at the same time!

Paulson did not immediately express his opinion after hearing this. After thinking for a long time, he asked: "The value of Sino-Forest will be greatly reduced. How can we convince a company like Weyerhaeuser to accept asset restructuring when short sellers may expose the news at any time?"

Smith immediately complimented: "Because we have Paulson."

The asset restructuring in this case will inevitably involve an exchange of interests outside of Sino-Forest, which can become a strong driving force for the development of events.

The boss, Paulson, is now known as the "No. 1 hedge funder on Wall Street." Even Henry Paulson, the former Treasury Secretary, has to stay away from him and calls himself "the other Paulson." This shows how high his reputation is.

As long as the boss is willing to push it, he can mobilize operational resources that the little short seller cannot imagine and make their short-selling attempts come to nothing!

Just talking about the case of Sino-Forest, it is hard to deny that this company committed fraud.

But this is not the only thing that everyone is playing for.

It sets the time and we suspend trading directly!

It points out the truth, and we take the initiative to explode!

First burst the bubble of Sino-Forest, then shift the responsibility to the management, and then promote the restructuring and mergers and acquisitions of assets, and eventually this little short seller who came out of nowhere will be defeated.

The more Smith thought about it, the more he felt that he still had room for maneuver and could have launched a complete counterattack!

In fact, he was becoming a little excited.

Everyone in the office was thinking about the vice president's plan, which sounded very feasible, extending the time and expanding the space.

Paulson obviously listened.

He paced in circles in the office.

After a long time, Paulson waved his hand and said, "You go out, Smith stays."

The two executives left their boss' office quietly without complaint, even though they were also interested parties and had money placed in the fund.

"Please sit down." Paulson pointed to the chair opposite him and said approvingly, "Smith, you have a good idea."

Smith sat down as he was told and became quite excited. He liked this kind of fight from a distance.

Paulson changed the subject: "But it's taking too long. I don't want to wait."

The passion rising in Smith's heart suddenly shrank, like a watercolor painting thrown on the carpet, and was also crumpled into a ball.

Fuck Paulson!!!

He quickly gathered his composure, not letting his abuse of his boss affect his current work, and asked, "Then we have to recover our personal losses."

The loss of the fund is difficult to avoid, and once it is operated it will inevitably attract regulatory attention, so one can only make up for one's own personal losses.

Paulson nodded, then shook his head. "Make preparations for both situations. On the one hand, follow the direction KCR has given us. On the other hand, you can reply to them using another email address and tell them your plan. Reiterate that we have already communicated with Chandler and Davis. As long as there is any suspected short-selling signal, we will immediately suspend trading and carry out asset restructuring and mergers and acquisitions without waiting for the market to react too much."

Smith understood what his boss meant: "Is this a threat to them?"

"It's a newly emerged small institution. What they see is something within our capabilities. So why not stop and think about it?" Paulson said calmly. "As long as they don't launch it on Friday, it means they have temporarily stopped. We can slowly sell it and eventually short Sino-Forest to make a profit."

Not only make up for the losses, but also make a profit!
Paulson said slowly: "If they are willing to stop and wait for us to leave, they can still short Sino-Forest later. If they insist on taking action on Friday, this research will likely become ineffective and their profits will be lost. If you were in his shoes, what would you choose?" As Smith said, he has the ability to push this matter in another direction.

Paulson believes that with his reputation, he can also make Guo Shanfeng recognize such handling ability.

In this way, there is no need to take a long time to digest the assets, the matter can be concluded quickly, and profits can be made from Sino-Forest through third-party channels.

This is the best response!

Smith easily understood this change in his approach. After careful consideration, he mused, "It is not easy to predict KCR's decision."

"Friday is a critical date," Paulson said again, adding, "I'm 90 percent sure they'll stop the operation."

This is also the reason why he asked Smith to contact him via email, in order to discuss subsequent cooperation with Guo Shanfeng, and said that after his funds left the market, they could still share the meat of Sino-Forest together.

With a market value of US$50 billion, Sino-Forest could have made huge profits. Now it is just that Guo Shanfeng has to postpone the time when making money.

This is an easy choice to make right?
Paulson believes in the thinking of his peers.

Smith was still a little worried. If following the opponent's footsteps was completely passive, then following his own method would turn passivity into activeness. But according to the boss's meaning, he was semi-active.

What is semi-active?
That's semi-passive...

Only when the dust settles will we know the nature of this decision.

"We do asset restructuring and mergers and acquisitions, and there is a chance that the client's money will be preserved," Smith tactfully suggested.

"Yes, it's just a chance. What if we can't convince Weyerhaeuser to take over? What if Sino-Forest is a scam with no assets after the audit?" Paulson asked. "We don't have much time. Your idea is good, but there are too many variables in its implementation. As long as KCR is willing to terminate the contract, the clients' money can be completely protected."

Smith had no reason to object; what his boss said made sense.

However, whether this principle can be realized depends on the final result.

Intimidation, gaming.

Smith lowered his head and thought for a while, then decided to half-fuck Paulson and endorsed his decision with practical actions: "Then I will use another email address to notify KCR, warn them, and then express my subsequent short-selling cooperation."

Paulson nodded slightly.

Smith breathed a sigh of relief. This powerful counterattack should make KCR give up temporarily. This small short seller might not be very powerful, so it tried to push its own side to crash the market together.

Since we came here for profit, we should leave for profit.

"Take this notebook back." Paulson pointed to the notebook on the table and said, "But we should still open a short position and see what happens on Friday."

Smith picked up his notebook and said, "Yes, it depends on Friday."

Paulson seemed to relax at this time, smiled for the first time, and emphasized: "I am 90% sure that I will not see this annoying King Cobra Research on Friday."

Smith hopes so too.

He said goodbye to his boss and walked out of the office. As expected, he saw three colleagues still waiting outside.

"How is it?" Aaron, who has a good relationship with Smith, asked at this time.

Smith shook his head and gave no answer.

"Come in." Paulson's voice came from the office.

Aaron and the other two quickly followed the call and walked into the boss' office again.

Smith, holding his notebook and unable to sleep, executed the brilliant intimidation plan from the "No. 1 Hedge Funder" at three o'clock in the morning.

……

Liu Wanying didn't expect that her leisurely life would last less than half a day before disappearing.

At 1:30 in the afternoon, she arrived directly at Bai Xiaosheng's headquarters. After learning that Yu Xing's meeting had not yet ended, she went to the president's office to wait.

Fifteen minutes later, Yu Xing saw the email message in Xiaoying's hand.

An email from a third party, which did not reveal any identity information, simply stated that the three major institutional shareholders of Sino-Forest have already communicated with each other and that if they were to encounter malicious short selling, they might conduct an asset audit and restructuring, and that they had already contacted potential trading companies.

And we do not rule out the possibility of further cooperation.

The wording of the entire email is vague, but the meaning is clear.

Yu Xing read it four or five times, and after confirming that he had understood it correctly, he asked, "Xiaoying, do you think a company like Sino-Forest can be restructured and acquired?"

Liu Wanying is a corporate mergers and acquisitions expert. After receiving the email, she thought about it carefully and gave her opinion seriously: "There is hope. It is difficult for us to know the actual asset scale of Sino-Forest right now. Moreover, corporate mergers and acquisitions are not often driven by market forces."

When she was working on a project before, A acquired B, not because of A’s idea, but because there was someone behind A.

Because Sino-Forest committed fraud and there is a bubble, won’t other companies acquire it?
The answer may be the opposite.

The more this happens, the more the forces behind it will push the merger to take shape. However, the process may be more bumpy and take longer, but in this case, it has nothing to do with getting over the mountain.

The risk of over-the-peak losses is rapidly magnified, and if Sino-Forest's shares are purchased in cash at a significant discount, there is even the possibility of losing the entire option premium.

This was something Liu Wanying never expected.

She sat in the office and read the email again. Suddenly, she felt it was a bit absurd that the turn of events had to do with her old profession...

Yu Xing silently read it again and couldn't help but sigh: "As expected of Paulson, with this status, the game we face is completely different. It must be late at night in the United States, but they have already quickly contacted Chandler and Davis and even formed an offensive and defensive alliance. Well, he is worthy of being the number one in hedge funds."

This extraordinary feedback makes the action of crossing the mountain passive.

Liu Wanying succinctly and accurately described the situations in which funds might be lost.

"If we had not been so greedy before and had not tried to use Paulson's power to crash the market, and had just shorted normally, that would have been fine." It is hard for Yu Xing not to reflect on this.

"Don't blame you. I agreed too." Liu Wanying also reflected and said, "Indeed, you are worthy of being Paulson."

The opponent was on a completely different level from last time, and the response was also completely different.

In just a few hours, the opponent has already shown the framework for a counterattack. Not only does he not want to lose money, but he also wants to take advantage of the situation to make a fortune.

The more I think about it, the more I feel that this number one hedge fund guy is really capable.

Liu Wanying expressed her thoughts, both to inform Boss Yu of the potential situation and to sort out her own thoughts. Finally, she asked, "What should we do now? Should we stop shorting on Thursday?"

“If we stop and Paulson slowly sells out and clears out his positions, will he still burst the bubble and let Sino-Forest restructure?” Yu Xing pondered, “Or will he contact Chen Deyuan and others privately and let Sino-Forest make up for the losses during this period?”

Liu Wanying pondered: "Logically, Paulson should pursue the greatest profit."

Yu Xing nodded and said, "Yes, I'm afraid it's unreasonable. Wasn't our original plan for him based on 'reasonable' from our perspective?"

He continued to point to the content of the email: "I don't trust Paulson. I don't know whether the words above are true or false. Our last calculations and speculations have been proven to be invalid. Do we have to do it again?"

"Paulson is now reminded that all his actions are in a black box, under the surface."

"The longer the time goes, the more he can do. For us to speculate about him in New York from Shanghai is like a blind man touching an elephant."

Yu Xing understood the changes based on the content of the email, and removed himself from the conversation, questioning the authenticity of the email.

Paulson is indeed very powerful and is the number one in hedge funds.

But I have encountered something like what happened with Evergrande myself, so can you expect me to believe what you say?

Liu Wanying heard what Boss Yu meant, took a breath unconsciously, and said hesitantly: "You mean..."

"Plans cannot keep up with changes." Yu Xing said in a deep voice, "What I mean is, just go for it!"

There was thought and struggle in Liu Wanying's eyes.

Yu Xing exhaled slowly: "Go ahead, and die!"

Liu Wanying couldn't help but let out a helpless smile: "You sound so relaxed..."

"It's nothing more than us starting over again. Alibaba still supports us." Yu Xing's eyes were bright. "We still have Bai Xiaosheng. At worst, I can flatter Xu Xin in the future. We still have a car that can be sold. At worst, we can still ride an electric scooter."

Liu Wanying frowned and sighed, "That's Paulson. He has proven himself to be the best hedge fund manager."

Yu Xing nodded and said, "Well, that quality is from the past. We can tell whether the quality is real or fake by testing it now."

Liu Wanying also smashed her left palm with her right fist at this time: "How to verify? Only recklessness?"

Yu Xing stood up and paced, his mind as clear as before, and said in a deep voice: "Now that things have come to this, we can only be reckless!"

(End of this chapter)