He stood up, walked to the whiteboard, and wrote a few lines on it:
Tesla stock price:
January 5:315.58
January 22:344.80
Increase: 9.3%
Time: 11 trading days
He turned around and looked at Chen Xi and Su Wantang:
"This growth rate is a bit abnormal without major positive news. After reaching new highs, there is a high probability that there will be a correction."
Chen Xi asked, "Then what are you going to do?"
Zhao Chen thought for a while:
"Let's do this - exercise the 3 million shares of Options and convert them into Common Stock.
The remaining 2 million shares of Options will be sold directly and you will be safe."
Su Wantang calculated an account on his notebook:
"3 million shares of Options are exercised, Strike Price 290 US Dollar, plus Premium 31.2 US Dollar, the total cost is 321.2 US Dollar.
Based on the current price of 344.8 US Dollar, the floating profit per share is 23.6 US Dollar, and 3 million shares equals 70.8 million US Dollar.
The remaining 2 million shares of Options were sold directly. Premium has risen from 31.2 US Dollar to almost 48 US Dollar now. The net profit per share is 16.8 US Dollar. The 2 million shares are 33.6 million US Dollar.
The total cashed profit exceeded 100 million US Dollar."
Zhao Chen nodded:
"Yes. After exercising the option, Common Stock's position increased from 9 million shares to 12 million shares, and Options's position was cleared.
In this way, you can lock in part of the profit and maintain the Common Stock position."
He looked at the time. "We'll do it tonight."
But he didn't wait for that "tonight".
Tuesday, January 23rd.
US Stocks Before the market opened, the stock price of Tesla continued to rise.
The market sentiment is extremely excited. CNBC's headline is "Tesla bulls are having a carnival", and Bloomberg Terminal is full of bullish research reports.
After the market opened, Tesla jumped directly higher and broke through 350 US Dollar within half an hour. It continued its efforts in the afternoon and rushed all the way to 360 US Dollar.
360 US Dollar. This is the highest point for Tesla since September 2017.
Chen Xi's fingers were hanging above the keyboard, waiting for Zhao Chen to order the execution of yesterday's plan.
But Zhao Chen didn't speak for a long time.
He looked at the number on the screen and suddenly felt a trace of hesitation in his heart.
360 US Dollar. If you sell Options today, what if the stock price rises to 370 tomorrow? What if it rises to 400?
He knows that Tesla will break through 1000 US Dollar in the future, or even higher.
But he doesn't know what the intermediate process will be like - he doesn't know when the correction will be, he doesn't know how deep the correction will be, and he doesn't know how long it will last.
"Zhao Zong?" Chen Xi reminded softly.
Zhao Chen was about to say "execute" when the number on the screen suddenly jumped.
359.50 US Dollar. Then 359.20 US Dollar. 358.80 US Dollar.
Selling orders suddenly poured out.
It's not just one or two retail investors, it's batches of institutional selling orders, pressed down layer upon layer.
Chen Xi's voice changed. "Someone is smashing the market."
Zhao Chen stood up suddenly and moved closer to the screen.
The selling force became stronger and stronger, and the stock price seemed to be pushed down by an invisible hand.
358 US Dollar.
357 US Dollar.
355 US Dollar.
At three o'clock sharp, a report appeared on Bloomberg Terminal.
Title: "Tesla: Production hell is not over yet"
The issuing agency is Citron Research--Wall Street, one of the most famous Short Selling agencies.
The content of the report is like a scalpel, accurately cutting Tesla's most vulnerable wounds.
"After two months of field research, we concluded:
Tesla Model 3's production capacity problem is far more serious than the market expected."
The report lists detailed data:
"The current average daily production capacity of Fremont Factory's assembly line is only 800 vehicles, which is far lower than the company's previous commitment of 1,500 vehicles.
The battery pack supply bottleneck has not yet been resolved, and Panasonic confirmed that Gigafactory's 2170 Battery Capacity Ramp-Up speed is not as fast as expected.
More importantly, internal documents obtained by us show that the rework rate of Model 3 is as high as 40%, which means that a large number of vehicles require secondary rework before delivery."
On the last page of the report, the target price is given: 200 US Dollar.
"We believe that Tesla's cash flow will be exhausted in the second quarter of 2018.
By then, the company will have to raise capital again.
With the current Cash Reserves of 3.2 billion US Dollar and the cash burn rate of 1 billion US Dollar per quarter, Tesla cannot survive the summer of 2018.
We reiterate our sell rating on Tesla with a target price of 200 US Dollar."
The moment the report was released, Tesla's stock price seemed to have been stripped of all support.
360 US Dollar.355 US Dollar.350 US Dollar.
Within fifteen minutes, the drop exceeded 10 US Dollar. Trading Volume surged, and selling orders came in like a tide.
Chen Xi's hands were shaking. "Zhao Zong, do you want to answer?"
Zhao Chen did not answer.
He stared at the rapidly jumping numbers on the screen, his mind racing at high speed.
He knew the report. No, to be precise, he "remembered" the report.
In January 2018, Citron released a famous Short Selling report, which dropped Tesla from 360 US Dollar to below 300 US Dollar.
Elon Musk later scolded Citron on Twitter for three days, but the stock price still fell.
But he forgot the specific time.
He only knows that Tesla will eventually rise to 1000 US Dollar and 2000 US Dollar, but he does not know how many times he will experience such a roller coaster in the middle.
This is the blind spot of the reborn - he knows the destination, but does not know every pit on the road.
Elon Musk's response came quickly.
At 3:15 in the afternoon, Elon Musk sent three messages: Twitter:
"Citron's report is full of incorrect information.
Model 3's Capacity Ramp-Up is on schedule. We will achieve our weekly production target of 5,000 units in Q2."
"Those Short Selling Tesla people are betting that Tesla will fail.
But they forget that Tesla has been criticized since the first day it was established."
"Short Sellers's losses will peak when Q2 Financial Report is released. At that time, we will see who is swimming naked."
But Twitter doesn't work.
The stock price continues to fall.
The market does not believe what Elon Musk says, it only believes in data and cash flow.
At 3:30, the stock price of Tesla dropped to 342 US Dollar.
Zhao Chen sat on the chair and said nothing.
Chen Xi couldn't help it. "Zhao Zong, our Options..."
Zhao Chen Close your eyes and lean back on the chair.
He remembered.
Tesla in 2018 was the darkest moment in the history of the entire company.
Model 3 Capacity Ramp-Up failed, cash flow dried up, Short Sellers went crazy Short Selling, SEC intervened in investigation, and executives resigned in batches--
All the bad news will come in the coming months.
The stock price will fall from 360 US Dollar to below 260 US Dollar.
Then, when everyone was desperate, Model 3 production capacity miraculously climbed up.
The stock price began to rebound, but the process was extremely slow, and it did not return to 360 US Dollar until the end of 2018.
In other words, if he does nothing now, his position will still be back above the cost line by the end of the year.
But in the intervening ten months, he will experience floating losses, floating losses, and floating losses again.
If he did something...