September 12, New York.
Zhao Chen arrived at Kennedy Airport in the afternoon local time.
Su Wantang and Shen Zhiyi followed behind. No one said anything while the three of them were waiting for the suitcase in front of the luggage carousel.
Su Wantang picked up Zhao Chen's coat from the conveyor belt, shook out the wrinkles, and put it on his arm.
Shen Zhiyi dragged his suitcase and walked ahead. He glanced back at Zhao Chen, with a very faint arc at the corner of his mouth.
Lin Shicheng arranged a car and drove directly from the airport to the office of Midtown Manhattan Era Vanguard.
When the car passed through Queens and entered Manhattan, Zhao Chen leaned on the seat and looked out the window.
September in New York is cooler than that in Shan City. The sky is a clean and distant blue, while Hudson River glows with gray-blue light in the afternoon sun.
The last time he came to New York was at the beginning of the year, when he was hunted by the Short-Selling Alliance about Tesla Pledged Shares. At that time, he looked out the window and saw snow and lights in the middle of the night.
This time I looked out the window and it was autumn and daytime.
The office is on the upper floor of an inconspicuous office building Midtown Manhattan, and the spire of Empire State Building can be seen outside the window.
Lin Shicheng is already waiting inside, with three folders and a cup of cold black coffee spread out on the table.
He was wearing a dark blue shirt with one button loose at the collar. It looked like he had been here since last night.
Zhao Chen sat down at the conference table, Su Wantang put Zisha Pot in his hand, and went to the tea room in the corner to boil water.
Shen Zhiyi sat a little further away and opened the laptop.
On the screen is the final version of the Henglong Legal Department handover list.
But she was not looking at the screen, her eyes fell on the three folders in front of Lin Shicheng.
Lin Shicheng opened the first folder without exchanging pleasantries.
"Zhao Zong, the situation of GME is more specific than the last screening report I sent you. Let's talk about our own position building progress first."
He turned the folder to the first page, and there was a brief list on it.
"As of yesterday's close, the GME Common Stock position held by Era Vanguard through multi-layer Offshore SPV accounts for approximately 1.2% of the total equity.
The average price of all positions is between RMB 5.8 and RMB 6.2 US Dollar, and the comprehensive cost is about RMB 6 US Dollar.
For Options, we hold Out-of-the-Money Call Options that expires in June and July of 2021.
Strike Price is concentrated in the fifteen to twenty-five US Dollar range, and the total cost of Premium is about 12 million US Dollar.
The pace of opening a position is very slow, and each order is controlled within 3% of the daily average Trading Volume.
Scattered across six to eight channels, no transaction will trigger an abnormal signal from transaction monitoring."
Zhao Chen flipped through the position details and asked, "Why is it so slow?"
"Two reasons.
First, GME's daily average Trading Volume is too small, Circulating Supply is just that little.
If we are a little faster, the stock price will be pushed up by ourselves.
Once the stock price changes, the Short Selling institution will immediately start to investigate the source of Buying Pressure. The structure of Offshore SPV cannot withstand scrutiny in front of Wall Street veterans. Second--"
Lin Shicheng Turn the folder to the next page,
"Ryan Cohen's holdings have surfaced.
He bought 9 million shares in August at an average price of 8.43 US Dollar, holding a shareholding ratio of about 13%.
His buying cost was higher than ours, and he opened the position publicly.
If we speed up the pace after his position is disclosed, the market will suspect that there is a second force chasing his market."
Zhao Chen tapped his finger lightly on the table.
Ryan Cohen, founder of Chewy, bought 9 million shares in August at an average price of 8.43 US Dollar.
Became the largest individual shareholder of GME and is promoting the company's transformation to Video Game E-Commerce.
This is a person whose costs are higher than his own, but whose public identity is more appealing.
Zhao Chen remembered what Boca Chica Launch Site, Elon Musk said while squatting under Raptor engine a long time ago--
"Find the breakpoint closest to you and solder it."
Ryan Cohen is the breakpoint in the structure of GME.
He was not found by Zhao Chen, he appeared on his own, but his appearance made the entire lead of Short Squeeze clear.
"What about market sentiment?"
Lin Shicheng opened the second folder, and on the screen was a trend chart of WallStreetBets Forum.
"Retail investor sentiment is heating up. On Reddit's WallStreetBets section, the discussion of GME has continued to rise since the end of August.
There is a key figure - a financial analyst whose forum ID is DFV, whose real name is Keith Gill, Boston.
He started posting screenshots of his GME holdings on WSB in June 2019. The cost of opening the position was about 53,000 US Dollar, and he bought Call Options.
His style on the forum is very special. He does not call for orders, but analyzes GME's balance sheet, the size of the second-hand game market, and the structural flaws of the Short Selling ratio item by item.
He calls GME a 'unique cigarette butt' - using Graham's theory of picking up cigarette butts to prove that this stock is seriously undervalued by the market."
Zhao Chen picked up the tea cup and took a sip.
DFV, of course he knew the name.
A long time ago, this name would appear in every report on Financial Media around the world, and was called "the leading brother in the retail investor war against Wall Street."
But at this moment, in front of Zhao Chen, he is just an analyst who posted on WallStreetBets Forum. He started building a position in June 2019 at a cost of 53,000 US Dollar.
I have been using public data to do Fundamentals analysis.
Zhao Chen doesn't need to predict his future - he only needs to see one thing,
DFV started to open a position in June 19, and Ryan Cohen started to open a position in August 2000.
The Short Selling ratio of GME is over 90%.
Put these three things together and the structure is clear.
"How did retail investors react to DFV's post?"
Lin Shicheng Turn to the next page of the trend chart.
"Follow. His frequency of posting positions on WSB has accelerated since September, and he posts screenshots almost every trading day.
After each distribution, GME's intraday Trading Volume and Options Open Interest will jump slightly.
At present, some people on the forum have begun to follow his positions with a 'YOLO' mentality, but the scale is still small.
The real tipping point has not yet arrived."
"What's the tipping point?"
"Citron. At present, Short Sellers has not made a public statement, but GME's Short Selling ratio has reached more than 90%, and Short Sellers's cost line is concentrated below ten US Dollar.
If the stock price rises above ten US Dollar due to a certain catalyst, Short Sellers will begin to be forced to make margin calls.
If an institution of this level Citron Short Selling publishes a bearish report publicly, the emotions of retail investors will be completely ignited--
They will regard Citron's short selling as Wall Street's contempt for retail investors, and then use their own Buying Pressure to fight against it."
Zhao Chen Close the folder and lean on the back of the chair.
The Empire State Building outside the window glows with warm golden light in the afternoon sun, and the skyline of Manhattan spreads out outside the window.
Su Wantang poured boiling water into Zisha Pot, and the aroma of tea slowly spread in the quiet office.
Shen Zhiyi closed the laptop and looked from Lin Shicheng to Zhao Chen's face - she was waiting for him to make a judgment.
"Keep the speed of opening positions at the status quo, don't speed up."
Zhao Chen Put the tea cup on the table,
"Ryan Cohen and DFV have told the story for us.
We don't need to tell the story, we just need to keep the chips in our pockets while they tell the story.
The position of Common Stock is stuck below 5%, and the position of Options continues to be bullish with virtual value.
Strike Price Don't pull it too high, control it between fifteen and twenty-five US Dollar."
Lin Shicheng jotted down the key points in his notebook and paused for a moment.
"If Zhao Zong, Citron publishes a bearish report publicly, the stock price may fall in the short term. Our Options position will have a floating loss."
"Floating losses are not a problem."
Zhao Chen picked up Zisha Pot and poured himself a cup of tea. The circle of tea stains on the inside of the lid glowed warmly under the light.
"Citron's bearish report is the lead. The tougher they are, the angrier retail investors will be.
DFV posted so many Fundamentals analyzes on the forum, and what they were waiting for was for a Wall Street organization to jump out and say, "You are wrong."
Citron will jump out. They always do."
Shen Zhiyi spoke at this time.
She reopened her laptop, and on the screen was an SEC public document she had just pulled up.
"GME will release Q3 Report at the end of November.
According to past practice, if Q3 Report continues to suffer losses, Short Sellers will take the opportunity to increase Short Selling's efforts.
But if Ryan Cohen promotes the Board of Directors restructuring around Financial Report, it may give the market a new catalyst.
I suggest that before the release of Financial Report, adjust the Options position to a contract with a longer expiry date to avoid the impact of short-term fluctuations on Premium."
Zhao Chen glanced at her and nodded.
"Do as you say. Lawyer Lin, Zhiyi will cooperate with you to adjust the term structure of the Options contract.
In addition, you have full control over GME and I will not interfere with the specific transaction execution.
I only look at the position summary and position opening progress."