Beijing time is January 16, 8:30 pm.
Shan City In the top-floor office of Henglong Building, the lights are still on.
Zhao Chen is sitting at his desk, with the pre-market data of Tesla displayed on the computer screen in front of him--
The stock price has dropped to 312 US Dollar, which is 7.5 US Dollar lower than the previous day's closing price.
Chen Xi and Su Wantang sat on both sides, and none of the three people spoke.
The office was quiet except for the hum of the computer fan.
Since the afternoon, the stock price of Tesla has fallen like a kite with its string broken.
ChainAnalysis' accusations set off ripple effects in global capital markets -
During the Asia period, the Tesla related Derivatives of Tokyo and Hong Kong were sold;
During the Europe period, the Short Selling market in the London market sharply enlarged; now, it is the turn of the North America pre-market.
All the pressure gathered until US Stocks opened a few hours later.
Chen Xi looked at the constantly beating numbers on the screen, and his voice became a little tight:
"It has already fallen to 311 before the market opens. If it falls further, it will break 310."
Zhao Chen leaned back on the chair, his expression unchanged.
His eyes stayed on the sell order depth data on the screen - sell orders were piled up one on top of another, like a wall.
Bills were paid sparsely, and once in a while a sum appeared, it was quickly eaten up.
"Where are the bulls?" he asked.
Chen Xi shook his head:
"There is no movement. The report on Goldman Sachs has just come out, and the rating of Tesla has been adjusted from 'buy' to 'hold'.
Morgan Stanley also issued a report, saying that the source of funds of 'Era Vanguard' is unknown, and customers are advised to be cautious."
Su Wantang added:
"In the afternoon, CNBC interviewed three Hedge Fund managers, two were working on Short Selling Tesla, and one was waiting and watching.
All three said, 'Era Vanguard' may sell under pressure."
Zhao Chen's mouth moved slightly. "They want us to sell."
Chen Xi nodded. "Yes. As long as we sell in the market, the stock price will collapse, and their Short Position will make a lot of money."
Zhao Chen didn't speak immediately.
He looked at the dense sales orders on the screen and was calculating quickly in his mind.
Tesla's pre-market Trading Volume has exceeded two million shares, which is five times the normal level.
Selling orders are surging, Buying Pressure is thin.
The market is like a snow slope that has been stripped of all support and is in free fall.
And everyone is waiting - how will the giant crocodile who harvested Wall Street on Bitcoin react.
Sell? The stock price continues to collapse, Short Sellers is carnival.
Hold on? Market panic intensifies and stock prices fall.
Buy? Buying when everyone is selling is equivalent to catching a flying knife against the trend.
Three options, none of which look good.
Zhao Chen closed his eyes and leaned back on the chair. The office was quiet for about a minute.
Then he opened his eyes and sat up straight.
"Buy."
Chen Xi was stunned for a moment. "Now?"
Zhao Chen nodded. "Start before the market opens. Place a limit order, below 315 US Dollar, take as many orders as there are.
Don't move if it exceeds 315, wait until it falls back below 315 before continuing."
Su Wantang frowned. "The liquidity of pre-market trading is poor. We will be discovered as soon as we enter."
Zhao Chen said, "Just to be discovered."
He stood up, walked to the window, and turned his back to the two people:
"The biggest problem in the market now is not where the money for 'Era Vanguard' comes from.
Everyone is guessing that we are going to run away. As long as we don't run away, or even continue to buy, this guess will be self-defeating."
He turned around and looked at Chen Xi and Su Wantang:
"What they want is a signal. We give it to them."
Chen Xi's fingers were already on the keyboard. But she hesitated and asked a key question:
"Zhao Zong, we are already more than 5% shareholders, continue to buy... is it legal?"
Zhao Chen walked back to the desk and opened a folder. Inside was a legal memorandum prepared in advance by Zhang Qingxue.
"Aunt Zhang sent it this afternoon. Please take a look."
Chen Xi took the folder and scanned it quickly. Su Wantang also came over to take a look.
The memo is clearly written--
According to Section 13(d) and Section 16 of United States Securities Exchange Act of 1934, as well as relevant SEC rules:
First, the reporting subject (passive investor) of Schedule 13G can continue to buy stocks after submitting 13G, and is not subject to the 6-month short-term trading restriction.
Short-term trading restrictions (Section 16(b)) only apply to "insiders" who hold more than 10% of the shares, or company directors and officers.
The shareholding ratio of 5.95% is not within this range.
Second, "Era Vanguard", as a passive investor, did not pursue Control, did not enter Board of Directors, and did not obtain inside information.
Continuing to buy is normal investment behavior and does not violate any federal Securities Law.
Third, the only compliance requirements are:
If the shareholding ratio exceeds 10%, the reporting category needs to be modified from 13G to 13D and more information disclosed.
But below 10%, there is no legal obstacle to continuing to buy.
Chen Xi breathed a sigh of relief after reading it, "In other words, we can continue to buy."
Zhao Chen nodded. "Yes. Moreover, it is the safest time for us to buy now."
Su Wantang asked, "Why?"
Zhao Chen said, "Because everyone thought we would run. Instead of running, we entered the field to take over.
When Market Reaction comes over, Short Sellers will be caught off guard. When the stock price rebounds, not only will our costs not be lost, but we will also make a profit."
He glanced at the time on the screen - Beijing time was 8:45 pm, which was fifteen minutes before the opening of US Stocks.
"Let's get started."
Chen Xi took a deep breath and placed his fingers on the keyboard.
In the pre-market trading system, the stock price of Tesla was hovering around 311.80 US Dollar.
Sell orders came like a flood, but buy orders were pitifully few.
Chen Xi entered the first order: limit order, below 315 US Dollar, 100,000 shares.
System prompts: Transaction can be completed.
She pressed the confirm button.
500,000 shares, average transaction price 311.50 US Dollar.
After taking this amount, the stock price rebounded slightly to 312 US Dollar.
But new sell orders were immediately filled in, pushing the price back down again.
Chen Xi didn't stop.
The second tranche: 300,000 shares, with price limit below 315 US Dollar.
Transaction. Average price 312.20 US Dollar.
The stock price was pushed from 312 to 313, and then fell back again.
The third transaction: 200,000 shares. Transaction, average price 312.80 US Dollar.
Three transactions, 1 million shares.
The pre-market trading volume surged instantly, and the stock price of Tesla was abruptly pulled from 311.80 US Dollar to 313.50 US Dollar.
The market is starting to take notice.
On Bloomberg Terminal, large orders one after another appeared in the transaction records.
The buy orders all come from the same broker channel, with a price limit of 315 US Dollar, and the goods are scanned regardless of cost.
"Someone is buying big."
During CNBC's pre-market live broadcast, the host noticed an abnormality in trading volume:
"Trading Volume has exceeded 4 million shares before the market opens. This amount is abnormal. Who is buying?"
The guest answered, "I don't know. But it's definitely not Short Sellers. Short Sellers is selling."
"Could it be 'Era Vanguard'?"
"It's possible. If it's really them - that would be interesting. Everyone was waiting for them to run away, and they came in instead."