Seeing that Zhao Chen stopped talking, Lin Shicheng put the tablet into Briefcase and prepared to leave.
When he raised his head, he found that Zhao Chen's eyes were still on his face.
It's not the kind of anxiety that comes after being hit by bad news, but the kind of calmness that comes after going through all the worst-case scenarios and then calmly looking for countermeasures.
"Lawyer Lin, if we take the initiative to add cash in advance before 225, how will the warning line and Liquidation Threshold be corrected?"
Lin Shicheng's fingers paused on the sofa for a moment. He has been a lawyer for twenty years and knows the weight of this issue very well--
The question is not "Will the position be liquidated?", but the question is "How can the position be liquidated?"
He pulled the tablet out of Briefcase again, and quickly moved his fingers across the screen.
Pulling up the summary table of the pledge contract terms of the four investment banks, dense numbers and formulas lined up on the screen.
"Zhao Zong, last time it was indeed not triggered to formally cover the position--
At that time, the lowest stock price was only 258 US Dollar. The four investment banks issued Inquiry Letter, not the official Margin Call Notice.
We have not actually covered the position so far, so the pledge terms are still in their initial state."
He enlarged the form,
"The initial pledge was 16.6 million shares, the stock price at the time of pledge was approximately 360 US Dollar, and the initial pledge market value was approximately 5.98 billion US Dollar.
The four companies raised a total of 3 billion US Dollar. Calculating the early warning line at 125%, the early warning market value is 3.75 billion US Dollar, and the corresponding early warning stock price is about 225 US Dollar.
Calculating Liquidation Threshold based on 115%, the closing market value is 3.45 billion US Dollar, and the corresponding closing stock price is about 207 US Dollar. Rounding up is 207."
His finger slid on the touch pad and called up the calculation of supplementary pledge Model.
"If we cover the position in advance at the position of 225 and use cash to supplement the pledge - the cash pledge will directly reduce the financing principal.
Suppose we add 300 million US Dollar in cash, and the financing principal drops from 3 billion to 2.7 billion.
The number of pledged shares remains unchanged at 16.6 million. The new warning market value is 2.7 billion times 125%, which is equal to 3.375 billion US Dollar.
The new closing market value is 2.7 billion times 115%, which is equal to 3.105 billion US Dollar."
He typed the last line of calculations on the screen.
"Dividing the new warning market value of 3.375 billion US Dollar by 16.6 million shares, the warning stock price is about 203 US Dollar.
Divide the new closing market value of 3.105 billion US Dollar by 16.6 million shares, and the closing price is about 187 US Dollar."
Lin Shicheng turns the screen to Zhao Chen.
"In other words, if we rush to provide 300 million US Dollar in cash,
The warning line will be lowered from the current 226 US Dollar to 203 US Dollar, and Liquidation Threshold will be lowered from 207 US Dollar to 187 US Dollar.
From 225 to 203, there are 22 US Dollar safety pads; from 203 to 187, there are 16 US Dollar.
Compared with the current Liquidation Line of 207, the safety margin will be significantly thicker after replenishing cash--
Short Sellers needs to drop more than 20% from 225 to really reach Liquidation Threshold. Zhao Zong of 187. This plan is feasible."
Zhao Chen leaned on the back of the sofa and slowly turned his fingers around the rim of the cup.
"It's feasible, but not now. Covering positions now is equivalent to exposing our defensive position in advance.
Let Short Sellers hit it first, and then start hitting it near 225.
They thought we would be forced to cover our positions at 225, so we would cover them at 225 - but it was not passive cover, but active cover.
After finishing, Liquidation Threshold dropped directly to below 187. Every US Dollar they hit further was betting with their own money that Tesla would fall below 187.
Whether they can smash it or not at this location depends on how much ammunition they have."
Short Sellers This time he was not as indecisive as last time.
Next, in less than two trading days, Tesla's stock price was hit by Short Sellers to around 225 US Dollar.
Selling orders poured down like an avalanche, and every integer barrier was easily penetrated.
In intraday trading on April 26, the stock price hit the lowest level of 224.5 US Dollar, which was only half a position away from the 225 US Dollar margin line calculated by Lin Shicheng.
In the afternoon of the same day, Risk Control System from four investment banks triggered Margin Call Notice almost simultaneously--
The wording is no longer the polite tone of Inquiry Letter, but requires that the margin gap be filled before the opening of the next trading day, otherwise the Forced Liquidation procedure will be entered.
Lin Shicheng was in the New York office of Era Vanguard when he received the notice.
He read the four additional notices from beginning to end, and then dialed Zhao Chen.
"Zhao Zong, four companies came at the same time. The total gap is about 300 million US Dollar. According to the plan we made before, how can we make up for it?"
"Fix." Zhao Chen's voice came from the other end of the phone, with only one word.
Lin Shicheng completed the transfer of 300 million US Dollar cash pledge within half an hour.
The four investment banks each adjusted their pledge terms after receiving the funds to cover their positions--
The financing balance dropped from 3 billion US Dollar to 2.7 billion US Dollar,
The warning line moved down from 226 US Dollar to 203 US Dollar, and Liquidation Threshold moved down from 207 US Dollar to 187 US Dollar.
The pledge account of Era Vanguard has returned to the safe zone.
However Wall Street has no secrets.
The news of Era Vanguard's additional pledge was spread by PB Departments of several securities firms before the close of the day.
This is not an official announcement, it is a private communication from Trading Desk--
When confirming the arrival of the funds, a colleague from the pledge management department of a certain securities firm asked, "How much available funds will Era Vanguard have in the future?" The person who answered the phone casually replied, "Probably not much."
This sentence spread throughout Midtown Manhattan's Hedge Fund circle within three hours.
But Short Sellers was not depressed.
Not at all.
In the Explorers Club, White-Haired Old Man put the pledge change notice he had just received on the coffee table, picked up the Whisky cup and took a sip, without any fluctuation in the expression on his face.
"Three hundred million US Dollar. No more, no less, just enough to push Liquidation Threshold to 187.
Lin Shicheng This old lawyer is indeed very accurate in settling accounts."
He put the cup down, crossed his fingers,
"But after the 300 million is added, their cash is basically at the bottom.
Apple returned the money from liquidation, Add Position Nvidia used almost 500 million principal, and now it is 300 million.
After piecing everything together, there is estimated to be more than 100 million available in the account.
More than 400 million US Dollar Cash Reserves have been basically completed.
The most valuable thing in their hands is 5.4% of SpaceX's equity, which according to the latest valuation is about 1.65 billion US Dollar. This part is not pledged."
"They will definitely use SpaceX's staking channel."
The bald man leaned against the fireplace, tapping his fingers lightly on the mantelpiece.
"Of course they can go. But they can't get through."
White-Haired Old Man There was a very faint arc at the corner of the mouth,
"SpaceX is a private company, and equity pledges and transfers must be approved by Board of Directors.
The pledge procedure itself is much longer than that of Listed Company equity - it requires Due Diligence, Board of Directors resolution, and a legal opinion from a lawyer.
We can't stop Board of Directors, but we can make this process go slow enough.
As long as the staking process is delayed for a few more trading days, we will have a few more trading days to continue smashing Tesla.
There is no need to completely block it, just slow it down. Capital will not give Era Vanguard time to escape from the tiger's mouth."
"Market sentiment is very favorable to us right now.
Tesla reported a loss of 700 million in the first quarter, and its delivery volume was lower than expected. The SEC's contempt of court investigation against Elon Musk is still ongoing.
Both 230 and 225 have been broken down.
The bull's defensive order did not form effective resistance before 200 US Dollar.
As long as we break through 187 before SpaceX's pledged funds arrive, Era Vanguard's pledge will be Forced Liquidation."
He picked up the wine glass and scanned the faces of the people present one by one.
"Once forced liquidation is triggered, the brokerage firm will directly sell the 16.6 million shares of Tesla on Secondary Market.
If 16.6 million shares hit the market, the stock price of Tesla will instantly collapse to below 150.
At that time, it is not a question of Era Vanguard - it is a question of whether Tesla will be pushed to the brink of bankruptcy by the largest single-day decline since privatization."