July 14, 2019, Sunday.
Manhattan Explorers Club from the lower city.
New York in July is as sultry as a steamer upside down on the Hudson River,
The Antarctica explorer in the frame is still looking down at the room with that slightly mocking look--
Compared with when he was trapped on the ice floe for four months, no one here has the right to complain about anything.
White-Haired Old Man arrived first.
He arrived nearly half an hour earlier than the appointed time, wearing the same dark blue linen coat.
In my hand, I held the Whisky cup that had been used for many years. There were only two melting ice cubes in the cup and no wine.
He placed the cup on the mantelpiece and loosened his tie as if he was angry with himself.
Then he sat down on the leather chair and looked through last week's closing data of Bloomberg Terminal:
Tesla closed near 303 US Dollar,
Since the Short Sellers collapse at the end of May, the stock price has almost climbed slowly along a gentle upward channel that he watched helplessly but was unable to stop.
Every slight intraday correction was supported by the more determined Buying Pressure.
Nvidia also nearly doubled in this year.
People arrived one after another.
The bald man sitting to the left of the fireplace--
His fund was one of the first institutions to increase investment in Tesla Short Position along with Muddy Waters in May--
The stop losses on several medium positions recently have been very ugly.
As soon as he came in, he turned his phone over and placed it on the coffee table with the screen facing down, as if he was afraid that someone would see the content on it.
The third regular customer hesitated before walking in. The scale of assets he managed was not very large.
Previously, I followed Short Selling at the latest, but I could do more flips faster than anyone else--
In the last two trading days, I even started to tentatively buy Call Options from Tesla.
White-Haired Old Man noticed that no one was sitting on the chair by the window.
That's a special seat for the guy with the loudest voice in the Short-Selling Alliance in May,
He liked to put his whiskey glass on the windowsill and take a sip after every dollar dropped.
This dear friend didn't come last week, and he didn't come last week either.
"Where's the person in that position?" The bald man raised his chin in the direction of the empty chair.
White-Haired Old Man didn't answer. He just picked up the Whisky cup from the mantelpiece, looked at the bottom of the cup, and put it back again.
The other few people didn't ask any questions, they all knew the answer -
That man had cut off most of Tesla Short Position last week.
The losses were enough to make him lose interest in any Short Selling for the remaining months of the year.
There were two fewer people than last time.
White-Haired Old Man glanced at the remaining empty seats in the room, picked up Remote Control and turned off the TV screen above the fireplace--
The CNBC midday show was playing silently there.
In the frame just before the screen flashed off, Carson Bullock was saying, "Their compliance awareness exceeded my expectations."
The subtitle bar stays on the keyword "Muddy Waters admits to underestimating Era Vanguard".
"SEC will not investigate anymore." He threw Remote Control on the coffee table.
"Bullock admitted it on CNBC, and Left secretly closed the position without saying a word.
When we sit here today, we are not discussing how to continue Short Selling Tesla—but whether it is still necessary."
There was silence in the room for a long time.
The younger analyst sitting next to the bald man spoke first,
He pulled up the summary table of the transaction data of the past few trading days on his mobile phone, and turned to the figures of several large positions closed.
"We won't mention our own back orders.
Judging from the seats we can cross-confirm so far, at least a dozen of the most determined Short Sellers main players have completely withdrawn from the battlefield since June.
Less than half of the allies who entered the war together in May are still holding on."
White-Haired Old Man didn't answer this sentence, just put the printout on the coffee table,
I tapped it twice with my fingers, as if knocking on a closed door.
He took out the transaction summary form written by himself from his pocket--
More than half a year ago, when Tesla moved from 300 US Dollar to 200 US Dollar, he always updated on time.
Every time I fill in a new piece of data, I feel like I am one step closer to Era Vanguard being liquidated.
But now the data has not been updated for several weeks, and the ink marks are still from a few months ago.
"Let me read this last material."
He paused, unfolded the paper, and spoke in a low voice but loud enough for everyone in the room to hear clearly.
"We have been eyeing Era Vanguard since Nvidia Financial Report plummeted in November last year,
At that time, its 13D declaration was just an inconspicuous announcement on the Wall Street terminal.
In December, during the liquidation window period of SoftBank, we found out that they used leverage.
It is suspected that they reaped huge profits through Bitcoin at a high level, but no one has any evidence.
In January, when they submitted HSR Filing and made it clear that they wanted to continue Add Position, we gathered here and reached an agreement for the first time -
I want to crucify this fund on Tesla and Pledged Shares.
It broke through 300 in February, saw repeatedly between 250 and 260 in March, and the stock price of Tesla fell below 200 in April."
He turned over the paper and continued reading, as if he were reading a court record that had lost its legal validity but still needed to be signed.
"In May Muddy Waters and Citron both disclosed Short Selling, and at the same time we communicated with the Wall Street Journal,
Exposed most of the staking vulnerabilities and leverage structure of Era Vanguard,
The stock price fell to 180 that week, only one step away from their Liquidation Threshold.
But the next day, they used all the money from the clearance of Apple to replenish the pledge deposit, and then made room to continue to increase their holdings on Nvidia.
Then in mid-May, they began to simultaneously scan Tesla and Nvidia.
Two fronts ignited simultaneously, and every table in our place realized that--
They used the last batch of cash to force us from a single line Short Squeeze into a two-line fight."
He turned to the last few lines.
"On May 28th, Muddy Waters reported that Era Vanguard had problems with the source of funds, and Citron added that they made false declarations.
In June, the SEC launched a formal investigation, and everyone believed that the burden of proof was on Era Vanguard.
But the result you see now is:
Era Vanguard took the initiative to submit all transaction certificates to the SEC.
From the initial purchase of Bitcoin a few years ago to the most recent cross-border transfer, every account page is locked to a verifiable block hash and bank watermark.
Muddy Waters withdrew its doubts, Citron quietly settled all Short Positions, and the SEC officially closed the case and dismissed the report.
As of last week's close, the stock prices of Tesla and Nvidia were stable at around 300 US Dollar and their highs in the past year respectively."
He put the piece of paper on the coffee table.
"Now we sit here.
From November last year to July this year, this room went from full to half empty.
Every empty chair is a fund that has signed a loss sheet."
His fingers traced the empty spaces one by one, pausing for a moment each time, as if he was mentally looking at the absent person.
The rest of the people instinctively looked at the remaining indentations on the leather chairs--
The dents in some chair cushions still have the folds from when the last owner stood up, and the last uncleaned cigar ashes in the crystal ashtray have long since cooled down.
The long-dried Whisky cup on the windowsill left a dark mark of invisible sugar stains on the bottom.
He was silent for a while and finally spoke:
"We were not defeated by Era Vanguard. We were defeated by our own arrogance.
From the beginning, we didn't believe that a young man in China who was just in his early twenties could make a huge difference in Wall Street.
By the time we believed it, it was already too late."
He picked up the Whisky cup and found that it was empty, so he put it down again.
The bald man leaned back on the chair and looked at the chandelier on the ceiling, and suddenly whispered--
When he checked the Era Vanguard position, what he cared about most was not the batch of Bitcoin, but another thing:
"Have you noticed that they have not reduced their holdings of Nvidia so far?"
This sentence caused a deeper silence in the room.
Everyone who has experienced Short Selling knows the concept of keeping a position unchanged when the market is at its most panicked.
And the whole room didn't do it.
"He's right - at least on this matter AI Computing Power, we were all wrong.
And that makes me feel more uncomfortable than losing money."
White-Haired Old Man Close the last transaction summary table,
"This deal is over."