"If controlled according to the upper limit of 9.9%, the total holding limit of Era Vanguard on Nvidia is about 60 million shares.
Calculated based on the current stock price range, the total position is approximately 9 billion US Dollar. This size..."
He didn't finish his words because Zhao Chen raised a hand to signal him to pause.
"Lawyer Lin, ninety-nine percent is an afterthought."
Zhao Chen's voice is not high, but every word is like water drawn from a deep well of deep thought, deep and cool,
"Before I get to that line, I have a more radical idea."
Lin Shicheng's finger stopped on top of the notebook and did not fall down.
Zhao Chen leaned back on the chair, looked through the porthole, and landed on New York an invisible point deep in the night sky.
The lights in the cabin cast half-dark shadows on his face, making his expression look even more elusive than usual.
"The equity pledge of Tesla, based on 50% of Pledge Ratio, can get about three billion US Dollar.
I don't plan to just buy these three billion."
Lin Shicheng's pupils shrank slightly.
"I will use these three billion as principal and double or triple the leverage."
Zhao Chen's voice was as calm as if he was talking about something that had already happened.
"Three billion principal, three billion to six billion financing, a total of nine billion US Dollar, all bought Nvidia."
His eyes turned back from the porthole and fell on Lin Shicheng's face.
"Added to Era Vanguard's existing position of 3.36 billion, the total position is more than 10 billion US Dollar.
Based on Nvidia's market value of 90 billion, the shareholding ratio is approximately between 10% and 12%."
The cabin was quiet for five seconds.
The roar of the engine suddenly became very clear, as if the entire plane was expressing Lin Shicheng's shock at the moment.
Su Wantang was sitting on the other side of the aisle, the tea cup in his hand stopped in mid-air, his eyes fell on the profile of Zhao Chen, he didn't speak, but his fingers tightened slightly.
"Zhao Zong." Lin Shicheng's voice was very low, so low that it was almost drowned out by the sound of the engine, "Do you know what you are talking about?"
"I know."
"The total position is more than 10 billion US Dollar, Double Leverage is superimposed on equity pledge, and the shareholding ratio exceeds 10%."
Lin Shicheng spat out word after word, as if he was reading a verdict.
"This is not radical, this is betting Era Vanguard's entire net worth."
Zhao Chen did not answer the call.
Lin Shicheng took a deep breath, turned the notebook to a blank page, picked up the pen, and drew a line on the paper.
"Zhao Zong, I have said this before.
But I now suspect that you may not fully understand its weight."
The tip of his pen tapped the line heavily, "I repeat, you don't have to listen, but I must say it."
He raised his first finger.
"Schedule 13D. If it exceeds 10%, it must be submitted within five working days.
13D is different from 13G. For 13G, you only need to report an approximate amount, while for 13D, you need to report everything--
All of your related parties, all of your funding sources, all of your shareholding purposes, whether you intend to acquire or reorganize the company, and any agreements or tacit understandings between you and any other shareholders.
Each entry must be written clearly, and each entry will become a permanent record in the Wall Street public database."
second finger.
"Section 16 Insider identity. If it exceeds ten percent, you are legally at the same level as Huang Renxun himself.
The initial declaration of Form 3 is within ten calendar days. Each transaction declaration of Form 4 is within two working days.
If you buy a thousand shares, Wall Street will know within two days. If you sell a thousand shares, Wall Street will know within two days.
Every move made by Era Vanguard on Nvidia will become a real-time live broadcast."
The third finger.
"Section 16(b) Short-term trading profits belong to the public.
After exceeding 10%, any profits from buying and selling within six months, regardless of whether you used inside information or not, will be returned to Nvidia Company.
This is a strict liability clause and leaves no room for defense.
If you are forced to reduce your holdings of Nvidia because Tesla needs a margin call, even if you sell at a loss,
The SEC will also match the lowest buying price with the highest selling price, calculate a 'theoretical profit' that you have not earned at all, and then ask you to spit out the money."
The fourth finger.
"Higher violation costs. Last year, the SEC concentrated enforcement, and twenty-three entities and individuals were fined, with a total amount of more than 3.8 million US Dollar.
Alphabet was fined 750,000, and Goldman Sachs was fined 300,000. If Era Vanguard is targeted, the fine will be more, not less."
He put down his hands and stared directly at Zhao Chen's face.
"Zhao Zong, I haven't talked about the fifth point yet."
Zhao Chen tilted his head slightly.
"The fifth point is that in extreme cases, the total position of 1.2 billion US Dollar is Double Leverage.
Every time Nvidia's stock price falls by ten percent, Era Vanguard's net assets evaporate to more than one billion US Dollar.
If Nvidia falls from one hundred and fifty US Dollar to one hundred and twenty US Dollar--
A 20% drop, which is entirely possible after the announcement of SoftBank's liquidation news - the floating loss of Era Vanguard is close to more than 2 billion US Dollar."
Lin Shicheng's voice suddenly dropped even lower, as if he was telling a secret that no one else could hear.
"The floating losses of more than 2 billion US Dollar, coupled with the Principal and Interest pressure of 6 billion US Dollar financing, plus the replenishment line of Tesla's equity pledge.
If three pressures come on at the same time, Era Vanguard's cash flow will be drained out within a week.
At that time, you are not buying Nvidia at the bottom, you are sending ammunition to Hedge Fund of Wall Street.
They will come around like sharks smelling blood and tear Era Vanguard's chips into pieces one by one."
The cabin fell into silence again.
Su Wantang's tea cup has been put down.
Her eyes never left Zhao Chen's profile, but her lips were pursed tightly and she didn't say a word.
She knew this was not the time for her to speak.
Zhao Chen was silent for a long time.
It got to Lin Shicheng and I thought he wouldn't answer.
"Lawyer Lin."
Zhao Chen finally spoke, his voice was much softer than before, but the weight of each word did not decrease.
"I have listened to every one of these five points you mentioned."
He stretched out his hand, picked up the pen from the table in front of Lin Shicheng, and drew a vague line in his palm.
"But I still have to cross this line."
Lin Shicheng's lips moved but no sound came out.
"There is only one reason."
Zhao Chen put down the pen and looked at Lin Shicheng.
"Nvidia's future increase will be much greater than the maximum you can imagine now."
His voice was as calm as stating a physical law.