Chapter Summaries

Zhao Chen watched Tesla fail to break through $300 as coordinated selling kept the stock under pressure, then began buying shares on Tuesday without stopping its decline. After coverage questioned whether the mystery buyer was strong or merely catching a falling knife, Zhao Chen wondered what the market was waiting for.

• Bloomberg and CNBC discussed possible identities for Tesla's mystery buyer as the stock opened higher on Monday.
• Zhao Chen told Zhang Qingxue to place limit orders below $295, but institutional selling repeatedly pushed Tesla back from $292 and it closed at $289; Era Vanguard bought no shares that day.
• Zhang Qingxue told Zhao Chen that options activity showed someone buying Tesla calls, and Zhao Chen said the shift was neutral because buyers were not yet taking large positions in common stock.
• On Tuesday, Zhao Chen directed Zhang Qingxue to buy Tesla below $282, and they acquired 500,000 shares at an average of $281, but Tesla still closed down at $282.
• After The Wall Street Journal questioned the mystery buyer's strength, Zhao Chen considered why his purchases were not changing the market and asked what investors were waiting for.

After Citron Research issued a bearish report on Tesla, Zhao Chen bought 1.2 million shares as the stock plunged, raising his holdings to 14.6 million shares. The market closed sharply lower, but a reporter’s account of Zhao Chen’s buying sparked speculation about the identity of the determined investor.

• Citron Research released a report claiming Tesla’s production problems were worse than expected and lowered its price target to $200.
• Zhao Chen told Zhang Qingxue to wait for the selling to weaken before buying Tesla shares.
• Zhang Qingxue bought 600,000 shares during the morning session as Tesla fell from $270 to $263.
• Zhao Chen directed Zhang Qingxue to buy another 600,000 shares during the afternoon while Tesla dropped further.
• Zhao Chen’s purchases brought his total holdings to 14.6 million shares, or 8.69%, while Tesla closed at $258.
• A CNBC reporter posted that one buyer had accumulated more than a million shares, prompting online speculation about the buyer’s identity.

Zhao Chen completed his planned Tesla purchases, bringing Era Vanguard’s holdings to 9.88% while keeping them below the 10% disclosure threshold. After calculating the portfolio’s roughly $700 million unrealized loss, he decided to leave the remaining funds in Treasuries and wait for a clearer opportunity.

• Zhao Chen instructed Zhang Qingxue to buy 2 million Tesla shares without letting his stake exceed 9.9%.
• Zhang Qingxue purchased the shares as Tesla fell, bringing Zhao Chen’s total holdings to 16.6 million shares, or 9.88%.
• Zhang Qingxue and Su Wantang calculated that the Tesla position had a weighted average cost of about $292.80 per share and an unrealized loss of roughly $700 million, including options.
• Zhang Qingxue told Zhao Chen that about $2.1 billion remained in Treasuries, and he chose to keep it there until a market opportunity became clearer.
• Zhao Chen told Zhang Qingxue to make no further purchases after the market opened the next day.

Zhao Chen watched Tesla shares rebound after Elon Musk defended the company and promised to buy more stock if prices kept falling. Lin Shicheng then told Zhao that Musk wanted to meet him, and Zhao arranged to see him the next afternoon.

• Tesla shares fell to $242 as short sellers pressed their advantage while Zhao Chen stayed away from the market.
• Elon Musk posted three tweets defending Tesla, promising production of 5,000 vehicles a week before June and saying he might personally buy more shares.
• Tesla shares rebounded and closed at $253, and Zhang Qingxue and Zhao Chen discussed the effect of Musk’s statements.
• Lin Shicheng told Zhao Chen that Musk had requested a meeting through Goldman Sachs intermediary Michael Chen.
• Zhao Chen agreed to meet Elon Musk at two o’clock the next afternoon and asked Lin Shicheng to arrange a quiet venue.

Zhao Chen met Elon Musk and reassured him that his nearly 9.88 percent stake in Tesla was a financial investment, not an attempt to control the company. He impressed Musk with his detailed analysis of Tesla’s production challenges and manufacturing strategy, leaving Musk more relaxed and willing to talk with him.

• Lin Shicheng welcomed Zhao Chen to the private club and told him Elon Musk would arrive alone.
• Musk asked Zhao Chen what he wanted from Tesla, and Zhao said he would hold his shares without seeking influence or a board seat.
• Zhao explained that Tesla’s Model 3 production bottleneck lay in battery-pack manufacturing and the overly automated Gigafactory ramp-up.
• Zhao argued that Tesla’s vertical integration and improving production scale would make its gross margins stronger than the market expected.
• Zhao described Tesla’s strategy as building a low-cost manufacturing system, and Musk relaxed as he listened.

Zhao Chen won Elon Musk’s attention by showing that he understood Tesla and SpaceX as long-term engineering projects rather than investments focused on profit. The conversation left Musk impressed by Zhao Chen’s grasp of Starship and first-principles thinking.

• Zhao Chen explained that he believed Tesla would succeed because Musk aimed to make electric cars affordable for everyone.
• Zhao Chen told Musk that he understood his long-term goals for Tesla and SpaceX, and Musk asked whether he was interested in rockets.
• Musk described Starship’s plan to carry heavy payloads to Mars and help establish human colonies there.
• Zhao Chen outlined Starship’s design, its potential launch costs, and how reusable rockets could make a Mars city an engineering problem.
• Musk said Zhao Chen was the first investor he had met who treated his ambitions as engineering problems and said he needed someone who understood his work.
• Zhao Chen praised Musk’s first-principles approach and explained how breaking down the costs of batteries and rockets showed they could be made cheaper.

Zhao Chen negotiated with Elon Musk to invest more heavily in SpaceX, offering to buy shares from existing shareholders at a premium after learning Musk could only allocate him up to $100 million. Musk considered the proposal and identified early investors who might sell, leaving Zhao Chen waiting to learn whether Musk would connect them.

• Zhao Chen discussed Musk's first-principles approach and told him he had followed his interviews and work.
• Musk offered Zhao Chen up to $100 million in SpaceX shares in the funding round at a $21.5 billion valuation, and Zhao Chen agreed to invest $100 million.
• Zhao Chen asked for a larger allocation at a $25 billion valuation, but Musk said the round's allocations were already settled.
• Zhao Chen proposed buying shares from existing SpaceX shareholders at a premium, offering up to twice the current valuation and promising not to seek control or interfere in management.
• Musk said Fidelity and Google were unlikely to sell, but some early investors might exit, and he weighed whether to connect Zhao Chen with them.

Zhao Chen secured Elon Musk’s help to invest in SpaceX and began arranging a purchase of new and existing shares. He postponed his return home and explored extending his US stay through a formal business invitation from SpaceX.

• Zhao Chen promised Musk he would not transfer SpaceX shares before its public offering or sell them to hostile investors, and Musk agreed to connect him with early shareholders willing to sell.
• Musk offered Zhao Chen a $100 million allocation of new SpaceX shares and a list of existing shareholders, while requiring Zhao to sell any shares he later wanted to offload to Musk or his designee.
• Zhao Chen told Zhang Qingxue to prepare funds for buying SpaceX shares, potentially at up to twice their current valuation.
• Zhao Chen told Lin Shicheng he needed to postpone his return home and extend his stay in the United States because SpaceX’s financing was underway.
• Lin Shicheng advised Zhao Chen to seek a formal SpaceX business invitation letter to support an extension of his stay or a later reentry.

Zhao Chen had Lin Shicheng file an amendment confirming Era Vanguard’s 9.88% Tesla stake, making the fund’s identity as the mystery buyer public. After Elon Musk welcomed the investment, Zhao Chen launched Era Vanguard’s official Twitter account and pledged to hold its shares long term.

• Zhao Chen asked Lin Shicheng to arrange a SpaceX invitation letter and prepare a 13G amendment disclosing Era Vanguard’s 9.88% Tesla stake.
• Lin Shicheng filed the amendment with the SEC at 2:17 a.m. on March 18, reporting 16.6 million shares and a passive investment purpose.
• Financial outlets and investors reported that Era Vanguard had raised its stake from 5.36% to 9.88%, confirming it was Tesla’s mystery buyer.
• Zhang Qingxue told Zhao Chen that the news had drawn major attention and that some short sellers were reportedly closing their positions.
• Elon Musk welcomed Era Vanguard on Twitter, and Zhao Chen created an official account and pledged that the fund would hold Tesla shares for the long term.

Zhao Chen left New York before his visa expired, planning to return once Lin Shicheng secured the SpaceX invitation letter and share allocation. After arriving in Shan City, he arranged meetings to handle Henglong and Bubble Mary business before returning to New York.

• Lin Shicheng told Zhao Chen that his visa expired that day and the SpaceX invitation letter would not be ready until Monday, so Zhao Chen decided to return home and come back in a few days.
• Zhao Chen instructed Lin Shicheng to secure his allocation of $100 million in new SpaceX shares and begin contacting existing shareholders.
• Zhao Chen, Su Wantang, and Zhang Qingxue flew from New York and arrived at Chongqing's Jiangbei Airport on the evening of March 19.
• Zhao Chen arranged a meeting for the next morning with Chen Xi, Chen Qiming, Song Zhongping, and others to handle business matters.
• Zhao Chen returned to his villa and messaged Lin Shicheng to continue moving forward with SpaceX and send the invitation letter when it was ready.

Zhao Chen returned to Henglong and reviewed progress on Haoyu Construction’s debt reduction and Henglong’s acquisition of a 26.3% stake in Bubble Mary. He scheduled a board meeting to retroactively approve the acquisition and nominate Zhang Qingxue and Chen Wei to represent Henglong on Bubble Mary’s board.

• Zhao Chen met with Henglong’s executives and asked Chen Wei to report on Haoyu Construction’s progress, including 500 million in debt repaid and plans to develop land in Banan District.
• Chen Xi reported that Henglong had acquired 26.3% of Bubble Mary for a total of 360 million RMB, while Zhang Qingxue confirmed that voting rights had been waived for the existing shares.
• Song Zhongping pointed out that the Bubble Mary acquisition exceeded the board’s authorization, and Zhao Chen scheduled a board meeting for Thursday to seek retroactive approval.
• Zhao Chen instructed Liu Mingyu to notify the directors and set an agenda that included approval of the acquisition and nominations of Zhang Qingxue as a director and Chen Wei as an observer.
• Zhao Chen asked Chen Qiming to document every payment for the acquisition by Wednesday and said he would take responsibility for the decisions that exceeded board authorization.

Zhao Chen’s team backed his decision to acquire a 26.3% stake in Bubble Mary despite procedural flaws, and he prepared to take responsibility at the board meeting. A call with Cheng Jiaxun introduced Zhao Chen to Shunxin Agriculture’s expanding hog business, prompting him to investigate what he remembered about the company.

• Song Zhongping, Chen Wei, Su Wantang, and Zhang Qingxue supported Zhao Chen’s Bubble Mary deal, while Chen Xi silently acknowledged its results.
• Zhao Chen told Chen Xi that he had bypassed board authorization because the opportunity to buy the shares would not last, and he promised Su Wantang to explain the decision honestly at Thursday’s board meeting.
• Zhang Qingxue told Zhao Chen that SpaceX had sent him an invitation and that two existing shareholders were willing to talk in New York.
• Zhao Chen called Cheng Jiaxun, who reported that Yunnan Agriculture planned to market about 1.2 million hogs and that its work with Henglong was progressing smoothly.
• Cheng Jiaxun described Shunxin Agriculture’s growing hog business, breeding and processing operations, and financial resources from Niba Mountain Erguotou.
• Zhao Chen reflected on his knowledge of Shunxin Agriculture and decided to confirm whether his memories of the company were accurate.

Zhao Chen had Chen Xi investigate Shunxin Agriculture and learned that its Erguotou business was gaining market share while a management reshuffle and proposed reforms could reshape the company. He asked Chen Xi to prepare a complete report after Thursday’s board meeting, leaving Shunxin Agriculture as a likely investment target.

• Zhao Chen asked Chen Xi to investigate Shunxin Agriculture after hearing it was expanding into hog farming and considering its baijiu business potentially undervalued.
• Chen Xi reported that Shunxin Agriculture had reshuffled its management and submitted a proposal for a state-owned capital operating company that could grant it greater autonomy and enable employee share ownership and mixed-ownership reform.
• Chen Xi presented research showing Niba Mountain Erguotou’s expected first-quarter revenue growth of 35% to 40%, high advance receipts, and expanding national distribution.
• Chen Xi explained that Niba Mountain was gaining ground in the low-end baijiu market, with strong growth in the Yangtze River Delta and other emerging markets.
• Zhao Chen concluded that the market had not fully recognized Shunxin Agriculture’s position as a low-end baijiu leader and told Chen Xi to prepare a complete report after Thursday’s board meeting.

Zhao Chen returned to Zhengfa University and spent the day with Shen Zhiyi, telling her about his Tesla investment and meeting with Elon Musk. As he prepared to leave for the United States again, Shen Zhiyi reflected on how his confidence and practical work had changed.

• Zhao Chen met Shen Zhiyi on campus and told her he had become Tesla's second-largest shareholder with a 9.88% stake.
• Shen Zhiyi praised Zhao Chen's growing success, and he told her he believed Elon Musk could send people to Mars through first-principles engineering.
• Zhao Chen told Shen Zhiyi he would return to the United States in a few days to handle SpaceX matters and attend a board meeting.
• Zhao Chen and Shen Zhiyi ate hot pot, then went to her apartment and talked about Musk's projects.
• Shen Zhiyi told Zhao Chen he was like Musk in doing concrete work rather than merely talking, and Zhao Chen put his arm around her.

At Henglong Group’s board meeting, Zhao Chen presented strong early results from its investments in Yunnan Agriculture and Bubble Mary, arguing that the funding and business choices were sound. The board then turned to retroactively authorizing Bubble Mary’s share acquisition, which exceeded the original valuation and spending limits, and Liu Mingyu asked Zhao Chen to explain.

• Liu Mingyu opened Henglong Group’s second temporary board meeting and announced its agenda, with Zhao Chen having moved the operational reports ahead of the procedural discussion.
• Chen Xi reported that Yunnan Agriculture had doubled its breeding-age sow inventory and projected 2018 hog sales of more than 1.8 million.
• Chen Xi reported that Bubble Mary’s first-quarter sales were projected to reach 75–80 million and that it was forecast to make its first-ever first-quarter profit.
• Zhang Qingxue said Bubble Mary’s forecast had been reviewed by Henglong’s finance department and matched actual figures from the first two months.
• Zhao Chen defended Henglong’s investments, praised Bubble Mary founder Wang An, and said Henglong held a 26.3% stake acquired for 360 million.
• Liu Mingyu presented the acquisition details, which exceeded the original authorization, and asked Zhao Chen to explain the situation.

Zhao Chen defended Henglong’s 360 million yuan investment in Bubble Mary, and the directors proceeded to vote on ratifying the acquisition. The meeting then turned to Shunxin Agriculture, where Chen Xi presented the company’s business segments and a management reshuffle that could lead to greater autonomy.

• Zhao Chen argued that Henglong had needed to act quickly to acquire a 26.3% stake in Bubble Mary before Wang An might close the investment window.
• Sun Zhengping questioned why Zhao Chen had not invested personally, and Zhang Qingxue explained that doing so could create related-party and reputational risks.
• Song Zhongping and Chen Wei accepted Zhang Qingxue’s explanation, while Shen Jue silently signaled her understanding to Zhao Chen.
• Liu Mingyu called for a vote to ratify Henglong’s Bubble Mary acquisition terms and its total 360 million yuan investment.
• Chen Xi introduced Shunxin Agriculture as the parent company of Niba Mountain Erguotou and described its baijiu, pork, and real estate businesses.
• Chen Xi reported that Shunxin Agriculture’s leadership reshuffle and proposed state-owned capital restructuring could grant the company greater investment and acquisition autonomy.

Chen Xi presented the case for investing in Shunxin Agriculture, highlighting Niba Mountain Erguotou’s growth, market position, and advance payments. Zhao Chen proposed buying up to 4.99% on the secondary market for about 517 million RMB, and Sun Zhengping approved the investment target.

• Chen Xi reported that Niba Mountain Erguotou’s revenue was expected to grow 35% to 40% in the first quarter, with 2018 revenue forecast near 9.2 billion yuan.
• Chen Xi described Niba Mountain’s expanding market share, the fragmented 200-billion-yuan low-end baijiu market, and Shunxin Agriculture’s 3.7 billion yuan in advance payments.
• Chen Xi explained that Shunxin Agriculture had about 570 million shares outstanding, a share price near 18.2 yuan, and a controlling shareholder with 48.85%.
• Zhao Chen proposed buying Shunxin Agriculture shares directly on the secondary market while keeping the stake below 5% to avoid disclosure requirements.
• Chen Xi calculated that a 4.99% stake would cost about 517 million RMB, and Sun Zhengping said he approved of the investment target.

Zhao Chen arranged a leveraged, gradual purchase of Shunxin Agriculture shares and left Shan City with Zhang Qingxue for New York to negotiate with SpaceX shareholders. He left Chen Xi and Su Wantang overseeing Henglong’s affairs while he focused on securing a place aboard Starship.

• Zhao Chen instructed Chen Xi to build a 5% stake in Shunxin Agriculture gradually, using brokerage financing with strict leverage and collateral limits.
• Chen Xi began buying Shunxin Agriculture shares on Friday, acquiring 2 million shares at an average price of 17.98 yuan without noticeably affecting trading.
• Zhao Chen reviewed Henglong’s ongoing business matters on Saturday and assigned Su Wantang to oversee Chen Xi’s margin purchases.
• Zhao Chen left for the United States with Zhang Qingxue on Sunday night, while Su Wantang and Chen Xi saw them off at Jiangbei Airport.
• Zhang Qingxue told Zhao Chen that Lawyer Lin had arranged meetings with two SpaceX shareholders for the following Wednesday and Thursday.

Zhao Chen arrived in New York to finalize Era Vanguard’s participation in SpaceX’s funding round, then met Elon Musk to discuss autonomous driving. Zhao argued that Tesla’s camera-based approach could scale through lower costs and a vast fleet of data, leaving Musk impressed by his understanding.

• Zhao Chen and Zhang Qingxue arrived at JFK and went to their hotel, where Zhao reviewed Tesla’s rising stock price and planned to meet Elon Musk.
• Zhao Chen met Elon Musk in Lower Manhattan and confirmed Era Vanguard could invest 100 million US dollars at a 21.5-billion-dollar valuation.
• Elon Musk asked Zhao Chen for his views on autonomous driving’s technical approach and commercialization timeline.
• Zhao Chen contrasted Waymo’s LiDAR and high-definition-map approach with Tesla’s camera-based strategy and argued that LiDAR’s cost made mass adoption difficult.
• Zhao Chen said Tesla could equip its cars with cameras in advance and build a fleet whose billions of miles of data would outpace Waymo’s millions, impressing Elon Musk.

Zhao Chen and Elon Musk discussed Tesla’s camera-based approach to autonomous driving, its computing needs, and the time needed to commercialize the technology. Musk confirmed the US$100 million financing, and Zhao prepared to meet Tesla’s existing shareholders.

• Zhao Chen told Elon Musk that computer vision could make lidar unnecessary, and Musk recalled leaving Mobileye to build Tesla’s Autopilot system in-house.
• Zhao Chen explained Tesla’s need for more computing power and described how its FSD Chip and Dojo Supercomputer could create a competitive advantage through hardware and data.
• Zhao Chen estimated that all-scenario L4 driving would take more than five years, while highway autonomy, automatic parking, and summon features could work well within two or three years.
• Musk said he valued Zhao Chen’s understanding of Tesla’s technology, welcomed him to SpaceX, and thanked him for believing in Tesla.
• Zhao Chen messaged Zhang Qingxue that Musk had confirmed US$100 million in financing, and she said meetings with existing shareholders were arranged for Wednesday and Thursday.