Zhao Chen completed the layout, but after entering June, Tesla's Short Sellers has been put on fire.
If the market cannot be smashed, closing the position will push up the stock price. Now we are really riding a tiger and it is difficult to get off.
The worst thing is that people's hearts are broken--
In the last week of May, several small-sized Hedge Fund with light positions were the first to defect and quietly closed their Short Sellers positions.
But the ones that can run are those with light positions, and the really big Short Sellers cannot run away at all.
On Monday, June 3, CNBC's midday live show invited two heavyweight guests--
One is a senior analyst who has been following Tesla for a long time, and the other is the former head of Goldman Sachs's trading department.
The host directly raised the question in the opening remarks:
"In the past two weeks, Tesla's stock price has rebounded from 178 US Dollar to over 230 US Dollar. Small institutions in the Short Sellers camp have begun to close their positions and leave.
My question is - how long can the big Short Sellerss last?"
The former Goldman Sachs trading director's answer was unsparing:
"It won't last long. Their problem is no longer whether the bearish logic is correct, but the liquidity dilemma.
Short Position of Tesla has always been at the top of the NASDAQ rankings. Muddy Waters and Short Position of Citron are so large that they cannot leave the market in an orderly manner.
Any closing order of more than 100,000 shares will be instantly captured by the market, and then Follow-up Orders will push the stock price higher.
Small institutions can escape because their positions are light and can be cleared in one or two transactions.
Large institutions cannot escape because they themselves are the market."
A senior analyst added:
"We have done some calculation - from 300 US Dollar to 178 US Dollar, the floating profit of Short Sellers is indeed very considerable.
But the rebound from 178 to 230, the rebound of more than 50 US Dollar has pushed the late entry Short Sellers into the floating loss range.
As for those Short Sellers who entered the market early, their floating profits are also shrinking at a rate of several percentage points every week.
What's even more fatal is that they no longer trust each other internally.
Whoever closes the position first will take advantage, and whoever closes the position later will pay the bill - this game structure itself will disintegrate Short-Seller Alliance from the inside."
At the same time, a flash message popped up on Bloomberg Terminal, with a short and deadly title--
"Era Vanguard has not submitted Schedule 13D Amendment Filing for two consecutive weeks, and the pace of accumulation is suspended."
This news was forwarded repeatedly in the Short Sellers trading group, and the caption contained a sense of luck after the disaster - "They stopped."
Beside the fireplace in the Explorers Club, White-Haired Old Man read this news three times, then slowly put down his phone and glanced at the people present.
There are two fewer people than last time - the two partners with lighter positions had quietly closed most of their Short Sellers positions last week and didn't even come to the meeting today.
"They stopped."
The gray-haired man repeated the title of the newsletter. There was no celebration in his tone, only a coldness after recalculating the accounts.
"But the reason for stopping is not because they have no money. It's because they have obtained enough chips on both lines.
Tesla 26 million shares, Nvidia more than 90 million shares. He doesn't Add Position, it's not that he can't add, it's that he doesn't want to add any more."
On June 8, Muddy Waters founder Carson Bullock took the lead in an exclusive interview with CNBC.
He was sitting in front of the camera, and on the bookshelf behind him was a hardcover collection of Muddy Waters's previous Short Selling reports.
His tone was sharper than when he issued the Short Selling statement a few months ago:
"Era Vanguard's huge Buying Pressure on May 9 attracted the attention of the entire market.
We traced the source of the funds and found that it was directly related to a series of offshore high-interest loans.
And some Fund Path bypassed traditional banking regulatory transparency requirements. The SEC should launch a formal investigation into this."
In the afternoon of the same day, Citron's Andrew Left followed closely and posted continuously on Twitter:
"Era Vanguard is suspected of making false declarations.
An offshore fund that claims to 'non-interference in operations and does not seek Control' has increased its holdings in Tesla to nearly 15% in just a few weeks.
At the same time, they continue to buy Nvidia - these two companies together have caused several fluctuations in the market value of Ten-Billion-US-Dollar.
And we were left in the dark about the true source and compliance of the funds driving this deal."
CNBC had this line of title on that night's program - "Era Vanguard: Hero or Vulnerability?".
The host invited a former SEC Enforcement Division official as a commentator, who spoke frankly on the show:
"The SEC will definitely investigate. Not because there is much substantive evidence in the whistleblower letter, but because the size of Era Vanguard's position is so large that regulators cannot ignore it.
If you hold more than 10% of a company's shares, you are legally Insider.
If you hold more than 10% of the shares of two US Dollar-level companies at the same time,
And use the equity of one company to pledge blood for the other company's Capital Chain--
This cross-position structure itself is a systemic risk.
The SEC will investigate. It's not a question of whether we want to investigate, it's a matter of necessity."
Chen Xi and Su Wantang haven't replied to New York yet.
Zhao Chen is sitting alone in the Living Room of Suite. On the Bloomberg Terminal in front of him are the real-time comments of CNBC and the endless discussion on Twitter.
Lin Shicheng sat across from him. After disassembling the SEC's inquiry letter one by one, he closed the folder.
"Zhao Zong, SEC requires two additional materials.
The core is to straighten out the complete chain of the money in May - Hong Kong pledge documents, Hong Kong Stock Exchange registration, and cross-border transfer certificates.
This gives us the opportunity to publicly clarify all sources of funding in a formal response."
His fingers paused on the edge of the folder,
"Muddy Waters and Citron cannot produce the bills and can only rely on pressure from public opinion.
But public opinion cannot decide fines. The sooner we make the materials transparent and impeccable, the sooner they will lose the leverage to use supervision as a shield."
Zhao Chen leaned on the back of the sofa and muted the TV and computer.
After the room became quiet, he escaped from the hustle and bustle of the outside world.
"Whether it's Muddy Waters or Citron, they are at the end of their rope and can only think of ways to cause trouble for us.
You don't have to follow their lead, prepare your response materials carefully, and nail down the facts word for word - the rest is left to them to question each other."
It would be abnormal for the SEC not to investigate such a large-scale purchase of two Listed Company companies with great influence on the times.
Zhao Chen has long been mentally prepared for this.
However, he didn't expect Short Sellers to be so impatient.
It seems that the other party is destined to be unable to close the position smoothly.