Rebirth 76: Industrial Internet Empire

Under Yang Mo's careful planning, Enron Energy set a record for the short-selling limit of Dow Jones listed companies, with a short-selling rate of 98%, and almost all circulating shares were short-sold for two rounds!

4 month 15 day.

The San Jose Mercury News broke the bombshell headline on its front page: Enron Online used lies to build an e-commerce empire.

The article details how Enron Online used the 3% rule to boost the performance of a one-year-old B2B e-commerce platform to US$3300 billion through false transactions.

After falsely increasing operating income and pushing up the stock price through financial fraud, major shareholders cashed out through equity pledges and reductions, and transferred them to overseas related accounts, resulting in a $600 billion deficit for Enron Energy and the loss of thousands of investors. The money is at risk of being wasted...

A stone stirred up a thousand waves.

This article in the San Jose Mercury News was like a detonated nuclear bomb to the already weak stock market!

Enron Energy immediately issued an announcement: Every transaction data of Enron Online is authentic and credible and can withstand any investigation. The company is operating well, and its first-quarter profit increased by more than 14% year-on-year. The San Jose Mercury News reported without any evidence Next, in order to cooperate with the illegal bookmakers in shorting Enron Energy and maliciously spreading rumors and smearing it, Enron Energy will use judicial means to defend its legal rights!

The righteous announcement, the stern lawyer's letter, the threatening phone call...

The San Jose Mercury News showed no intention of backing down and began a series of reports on Enron's online fraud.

As the reports deepened, Enron Energy's official audit firm, Arthur Andersen, began to surface.

As the Federal Securities and Exchange Commission begins to intervene in the investigation, Enron Energy is completely shocked!

The notorious Arthur Andersen Accounting Firm could not escape the disaster. Listed companies on the New York Stock Exchange audited by Arthur Andersen Accounting Firm have become the hardest hit areas. Investors have sold off the so-called "Andersen Group" stocks...

Implicated by Enron Online and Arthur Andersen, WorldCom, also a major client of Andersen, has become one of the companies with the highest attention on the New York Stock Exchange.

.........

Morgan Stanley investment bank headquarters in New York.

The afternoon market has already closed, and James Gorman is still staring at the market with a stern expression...

"Mike, have you noticed? Most of the listed companies that hire Arthur Andersen to audit their financial reports are on Zhiyuan Group's short-selling list!" Gorman said thoughtfully.

"Are you saying that Zhiyuan Group has long known about Enron Energy's financial fraud?" McHarvey asked.

"Mike, go through all the stocks bought and sold in the accounts of Zhiyuan Group and Qianhai Department during this period and see if there is any correlation between them..." Gorman ordered after pondering for a long time.

About half an hour later, McHarvey hurried in with a stack of documents.

"Your Excellency, Mr. President, the Intelligence Department has carefully studied and found that the stocks shorted by the related accounts of Zhiyuan Group and Qianhai Group are divided into four major categories: The first category is the listed companies for which Andersen acts as an agent for financial audit, including Enron Energy, WorldCom, Tongtong The second category is multinational giants with artificially high valuations of technology and Internet stocks, such as Intel, Cisco, Sun, and Yahoo. The third category is represented by Internet start-up companies, which have no performance support and only rely on a concept to satisfy their hunger. The fourth category is the traditional retail department store industry represented by Sears and Brooks Brothers..." McHarvey explained in detail.

Gorman's frown deepened, and after a while he asked again: "What about the stocks they bought? Is there any pattern? Or is it only used temporarily to boost the market?"

"The stocks they bought seemed chaotic, but the Intelligence Department still discovered some patterns, including the following categories: The first category is Internet companies controlled by Zhiyuan and Qianhai, such as Apple, Google, Amazon, Asmail, NVIDIA, ARM, etc., the second category is the military industry sector, including Grumman, General Dynamics, Lockheed Martin, Boeing and Raytheon, the third category is the medical equipment sector mentioned in their announcement, and the fourth category is Egypt Oil giants led by XonMobil, Chevron, and Hess..." McHarvey opened the folder and continued.

"Military industry and oil sector? Is it possible that the Kosovo war is not over yet?" James Gorman murmured to himself.

"I think compared to the military and oil sectors, what deserves more attention is their efforts to transfer positions, reducing their holdings of Cisco, Sun, and Yahoo at all costs, but buying Apple, Google, Amazon, and Asmail , NVIDIA, and ARM, since they claim that the capital chain is tight, why do they repeatedly buy the tradable shares of these listed companies with very high shareholding ratios?" McHarvey said.

"Mike, why do you think it is?" Gorman asked with interest.

"There are two situations when major shareholders repurchase circulating shares: the company's stock is undervalued by the market or falls below its net value for some reason; major shareholders spend real money to protect the market in order to enhance investor confidence; and there is another situation where the company's performance is poor. There are potential major benefits, major shareholders repurchase arbitrage!”

"As Zhiyuan Group is a bookmaker that sells short CFDs, it is impossible for them to enter the market to protect the market. Then there is only one possibility, which is that these listed companies have potentially significant benefits in terms of performance!" McHarvey analyzed clearly.

James Gorman fell into deep thought again...

After a long time, Gorman said solemnly: "Mike, before you figure out their true intentions, follow the lead of the Zhiyuan Group and do a good job of risk hedging in the stock index futures market for all long positions that have been liquidated. Let the intelligence department find out as soon as possible the reason why Zhiyuan Group has increased its holdings of these stocks against the trend!"

...............

In early June, the online pet store issued an announcement: The company was unable to settle payments to suppliers on time due to a broken capital chain, and the company was actively looking for opportunities to restructure its debt...

The Super Bowl primetime commercial is still fresh in my mind, but it has collapsed!

From company creation to IPO listing, it perfectly demonstrates what the Nasdaq myth is?

A start-up company raised US$5000 million, took half a year to IPO, and its market value soared to US$120 billion, and then another year later, it fell into a business crisis...

This is the Nasdaq version: I watched him build a tall building, entertain guests, and then the building collapsed...

Like this, there are many Internet "idea-based" start-up companies with bottomed out cash flow and no ability to generate blood. Nasdaq has many more thunderstorms, which are just the first to topple the dominoes...