Chapter Summaries

Zhao Chen reviewed Era Vanguard’s loss on its Apple investment and ordered the shares sold in batches, not to cut losses but to raise funds for a planned increase in Nvidia. Chen Xi agreed to complete the exit within the thirty-day HSR waiting period, leaving time for Apple’s recovering price to improve the sale.

• Chen Xi reported that Era Vanguard’s 5.7 million Apple shares had an unrealized loss of about $133 million after dividends.
• Zhao Chen said the loss was small compared with the profit from Tesla and ordered the Apple holdings sold in batches starting the next day.
• Chen Xi questioned selling Apple at a loss, citing its valuation, the recovery from $142, and Berkshire’s decision to hold.
• Lin Shicheng explained that Zhao Chen planned to raise Era Vanguard’s Nvidia stake from 10.8 percent to 15–20 percent and would need HSR clearance before buying more shares.
• Zhao Chen clarified that Chen Xi had thirty days to sell Apple while seeking a better price, and Chen Xi agreed to complete the exit during that period.

Zhao Chen and his team planned to sell Era Vanguard’s Apple shares to fund an increase in its Nvidia stake while keeping its funding sources clear for regulatory review. Their available cash and potential SpaceX-backed financing still fell short of the roughly $3.5 billion needed to raise the Nvidia stake above fifteen percent.

• Zhao Chen explained to Su Wantang why selling Apple shares would provide cleaner, more substantial funding than pledging them, especially with Era Vanguard’s Tesla shares already pledged.
• Zhang Qingxue warned that additional pledges could increase leverage and prompt closer scrutiny from banks and regulators.
• Zhao Chen instructed the team to sell Apple after its price recovered above $175, and Chen Xi agreed to prepare a gradual divestment plan within three days.
• Chen Xi summarized Era Vanguard’s holdings and finances, estimating that selling Apple and using remaining emergency funds would provide about $970 million to $1.02 billion in cash.
• Chen Xi estimated that SpaceX-backed financing could add $800 million to $1 billion, but Zhao Chen saw that the total would still leave a funding gap for reaching a fifteen-percent Nvidia stake.

Wall Street adversaries learned that Era Vanguard had filed to increase its Nvidia stake and realized its shares were locked during the HSR review. They identified its fully pledged Tesla shares as a vulnerability and began preparing a short attack, leaving Era Vanguard at risk of margin calls.

• After the HSR filing leaked, Zhao Chen’s former Bitcoin adversaries concluded Era Vanguard planned to keep buying Nvidia.
• The group learned that Era Vanguard had pledged all 16.6 million of its Tesla shares as collateral for loans used to buy Nvidia.
• The traders decided to short Tesla to drive down the collateral’s value and force Era Vanguard into margin calls.
• On January 18, the Federal Register published a notice naming Times Pioneer Capital and Nvidia Corporation, confirming Era Vanguard’s plans to Wall Street.
• With Tesla deliveries below expectations and its share price weakening, the adversaries built positions in deeply out-of-the-money Tesla put options.

Elon Musk’s layoff announcement triggered a massive selloff in Tesla, as hedge funds drove its share price down and threatened the value of Era Vanguard’s pledged shares. Zhao Chen judged the collateral remained safe for now and ordered Era Vanguard to accelerate selling its Apple position as Tesla closed near its daily low.

• Elon Musk announced Tesla would lay off about 7% of its workforce and warned that fourth-quarter profits might fall below third-quarter profits.
• At least six hedge funds sold Tesla shares heavily, sending the stock below $300 and threatening the collateral securing Era Vanguard’s financing.
• Tesla fell to about $295, and its market capitalization dropped below General Motors’.
• Lin Shicheng warned Zhao Chen that a further decline could trigger margin calls that Era Vanguard could not meet with its available cash.
• Zhao Chen declined to contact the banks and ordered Lin Shicheng to speed up the liquidation of Era Vanguard’s Apple position.
• Tesla closed at $302, down nearly 13% for the day.

Wall Street hedge funds targeted Tesla to pressure Era Vanguard’s pledged shares and force it to sell Nvidia, while Zhao Chen and his team managed the margin risk. Tesla found support around $300 as short sellers paused, and Zhao reassured a doubtful Elon Musk that Wall Street was manufacturing panic rather than judging Tesla’s true value.

• Hedge funds concentrated their short-selling attack on Tesla, aiming to trigger margin calls that would force Era Vanguard to sell assets.
• Zhao Chen learned that Musk had already decided on layoffs and expected weaker fourth-quarter profits, then ordered Era Vanguard to accelerate its Apple liquidation and meet any margin calls.
• Tesla repeatedly bounced near $300 as bargain hunters and institutional buyers absorbed the short sellers’ orders.
• The hedge funds stopped pressing the stock below $300, closed some profitable shorts, and placed new put options while Tesla traded sideways on shrinking volume.
• Musk told Zhao Chen that layoffs, weaker deliveries, and slowing Model 3 orders had made him question whether to accelerate Model Y development.
• Zhao Chen compared Tesla’s situation to Nvidia’s prior selloff and told Musk that Wall Street was using price swings to create panic and force leveraged investors to surrender their shares.

Zhao Chen encouraged Elon Musk after Tesla’s layoffs and warned him that short sellers might drive the stock below $300. He then watched Nvidia’s disappointing guidance hammer chip stocks and Era Vanguard’s investment, while Tesla’s short sellers stayed quiet; as Zhao considered returning to China for the Lunar New Year, he went back to hold a meeting with Shen Jue.

• Zhao Chen reassured Elon Musk that Tesla’s layoffs reflected a focus on lowering Model 3 costs, not a failure, and urged him not to panic if short sellers pushed the stock below $300.
• Ten days after Tesla’s layoffs, Nvidia cut its revenue guidance, and its share price plunged 14%, dragging down other chip stocks.
• Era Vanguard’s 65 million Nvidia shares fell below their average cost, leaving the fund with more than $420 million in unrealized losses, but Zhao Chen stayed calm.
• Zhao Chen noticed Tesla’s short sellers had gone quiet and suspected they were either gathering ammunition or recovering from earlier selling.
• As the Lunar New Year approached, Zhao Chen considered returning to China and went back to attend a brief meeting after Shen Jue requested his presence.

After the Spring Festival, the SEC’s action against Elon Musk sent Tesla shares tumbling, but heavy buying near $250 halted the decline. Zhao Chen and his team judged that bulls and bears had reached a temporary stalemate and decided to wait for Tesla’s first-quarter delivery figures and financial report before acting.

• Zhao Chen spent New Year’s Eve with Zhang Qingxue and Chen Xi before returning to New York after the sixth day of the new year.
• The SEC asked a federal judge to sanction Elon Musk for posting Tesla’s projected 2019 production figure without prior approval, and Tesla shares fell sharply.
• Bears drove Tesla below $270 and down to $250, where large buy orders repeatedly absorbed their attacks.
• Chen Xi explained that buyers and short sellers were running short of the resources needed to push Tesla much farther in either direction.
• Lin Shicheng reported that Era Vanguard had completed its Apple liquidation and recommended holding its position until Tesla’s first-quarter results clarified the market’s direction.
• Zhao Chen listened as Lin Shicheng identified Tesla’s deliveries and financial report as the events likely to break the stalemate.

After Tesla’s recovery eased Era Vanguard’s margin pressure, Zhao Chen restarted Nvidia purchases while preserving a large cash reserve. The shorts at the Explorers Club paused their Tesla offensive, and the chapter ended with Su Wantang explaining that Era Vanguard’s remaining cash was meant to deter another attack.

• Lin Shicheng reported that Tesla’s rebound had restored a safe cushion above the pledged position’s liquidation threshold.
• Zhao Chen ordered Era Vanguard to buy $1 billion of Nvidia in staggered trades while keeping more than $400 million in reserve.
• The Explorers Club’s trading models detected Era Vanguard’s Nvidia accumulation, and its members concluded that further shorting Tesla would not weaken the company while it had cash to cover margin calls.
• The Explorers Club decided to pause new put options and active Tesla selling until Tesla’s first-quarter delivery figures offered direction.
• Chen Xi warned Zhao Chen that public Nvidia filings could reveal the purchases and asked whether the shorts were waiting for Era Vanguard to use its cash.
• Su Wantang said the remaining $400 million-plus was being held as a deterrent against another attack on Tesla.

Zhao Chen reviewed Henglong Group’s first-quarter report, which showed 3.747 billion yuan in unrealized gains from its five A-share holdings and a major shift toward investment assets. Zhang Qingxue also reported rapid growth at Bubble Mary, whose prospective funding round could sharply increase the value of Henglong’s stake.

• Chen Xi gave Zhao Chen Henglong Group’s draft first-quarter report, showing gains across all five A-share holdings, led by Wuliangye’s 1.505 billion yuan unrealized gain.
• Chen Xi reported that the five stocks gained about 3.747 billion yuan in total and that Henglong’s net assets had risen to around 18 billion yuan.
• Su Wantang noted that Henglong had shifted away from relying on real estate, with the investment sector now accounting for more than eighty percent of net assets.
• Zhang Qingxue reported that Bubble Mary’s Labobo blind boxes were selling quickly and that first-quarter revenue and net profit were expected to grow by more than two hundred and three hundred percent, respectively.
• Zhang Qingxue said Wang An was preparing another funding round that could value Henglong’s 31.2 percent stake in Bubble Mary at more than 1.5 billion yuan.

Zhao Chen prepared for the market to reassess Henglong's investments as Bubble Mary's valuation rose and Henglong released strong annual and first-quarter results. Henglong's share price surged to a record HK$69.5, and the market began valuing it as an investment holding company rather than a property company.

• Zhang Qingxue and Chen Xi explained that Bubble Mary's rising valuation had increased Henglong's 31.2 percent stake to as much as 1.55 billion, and Zhao Chen focused on the market impact of upcoming reports.
• Zhang Qingxue confirmed that Henglong had preemptive subscription rights in future Bubble Mary funding rounds, protecting its ownership stake from dilution.
• On April 18, Henglong released its annual and first-quarter reports, revealing over 18 billion yuan in net assets and approximately 3.747 billion yuan in unrealized gains from five A-share holdings.
• Investors drove Henglong's share price above HK$60 before the report, then bought heavily after trading opened, pushing it to an intraday high of HK$69.5.
• Liu Mingyu told Zhao Chen that the Hong Kong Stock Exchange required a disclosure about unusual trading and that brokerage reports had raised their target prices as the market repriced Henglong as an investment holding company.

Zhao Chen arranged company announcements and discussed upcoming shareholders’ meetings before Shen Zhiyi joined him in New York to gain legal experience and keep him company. At Era Vanguard’s office, Shen Zhiyi saw that Times Pioneer Capital’s net assets approached US$10 billion.

• Zhao Chen asked Chen Xi to issue a stock price fluctuation announcement and discussed Yunnan Agriculture’s April 22 shareholders’ meeting with her.
• Chen Xi reported Cheng Jiaxun’s optimism about Yunnan Agriculture’s business and his confidence in Henglong as a shareholder.
• Zhang Qingxue told Zhao Chen that Wang An wanted Henglong’s views on Bubble Mary’s valuation and the timing of its next funding round, and Zhao Chen said Henglong would support Wang An’s judgment.
• Su Wantang invited Shen Zhiyi to New York to gain practical legal experience with Lawyer Lin and keep Zhao Chen company, and Shen Zhiyi flew from Shanghai to meet him.
• Zhao Chen took Shen Zhiyi to dinner with Elon Musk and then to Era Vanguard’s New York office, where she saw a report showing Times Pioneer Capital’s net assets nearing US$10 billion.

Zhao Chen learned that Tesla’s weak earnings and Era Vanguard’s reduced cash reserves could invite a coordinated short attack that might push the stock toward forced liquidation. After returning to New York, he assessed the collateral risks and prepared for the possibility that Tesla would fall below the brokerages’ thresholds.

• Shen Zhiyi saw the enormous value of Zhao Chen’s Nvidia stake recorded in an offshore fund.
• Lin Shicheng reported Tesla’s first-quarter losses and falling deliveries to Zhao Chen, who told him to make no trades and prepare to add collateral.
• Zhao Chen and Shen Zhiyi spent the evening in Las Vegas at a Cirque du Soleil show before flying back to New York the next day.
• Lin Shicheng told Zhao Chen that Tesla had fallen to about $248 in premarket trading and outlined margin-call and forced-liquidation thresholds of roughly $225 and $207.
• Zhao Chen warned that short sellers could target $207, while Lin Shicheng noted that their newly disclosed Nvidia purchase left Era Vanguard with less cash to defend its Tesla position.

Zhao Chen waited until Tesla neared $225 before adding $300 million in collateral, lowering Era Vanguard’s liquidation threshold to $187. The shorts learned Era Vanguard might have little cash left and planned to delay a pledge of its SpaceX shares while driving Tesla below the new threshold.

• Lin Shicheng calculated that adding $300 million at $225 would lower Era Vanguard’s warning threshold to $203 and liquidation threshold to $187, and Zhao Chen decided to wait until the stock approached $225.
• Short sellers drove Tesla down to $224.50 on April 26, triggering simultaneous margin calls from Era Vanguard’s four investment banks.
• Zhao Chen ordered Lin Shicheng to transfer $300 million, and the banks reduced Era Vanguard’s financing to $2.7 billion and its liquidation threshold to $187.
• News of Era Vanguard’s cash top-up spread among Wall Street trading desks, along with speculation that the fund had little cash remaining.
• At the Explorers Club, the gray-haired old man and the bald man discussed delaying Era Vanguard’s attempt to pledge its SpaceX shares while pushing Tesla below $187.

The Wall Street Journal, Bloomberg, and Reuters exposed Era Vanguard’s leveraged Nvidia position and its dependence on Tesla shares pledged as collateral, drawing hedge funds’ attention to the fund’s precarious finances. Muddy Waters Capital publicly announced a Tesla short, arguing that Tesla’s fundamentals and Era Vanguard’s leverage could drive the stock sharply lower.

• The Wall Street Journal reported that Era Vanguard held more than ten percent of Nvidia using leveraged financing backed by 16.6 million pledged Tesla shares, with Tesla nearing the banks’ forced-liquidation threshold.
• The report detailed Era Vanguard’s limited cash, its locked-in Nvidia stake, and the uncertainty of using its SpaceX shares as collateral.
• Bloomberg and Reuters published follow-up reports highlighting the collateral risk and regulatory scrutiny of Era Vanguard’s filings.
• Hedge funds learned the details of Era Vanguard’s holdings and funding shortfall from the reports and judged the risk-reward of targeting Tesla attractive.
• Muddy Waters Capital, through founder Carson Block, announced a Tesla short based on falling deliveries, a deteriorating balance sheet, and Elon Musk’s escalating SEC dispute.

Muddy Waters and major media outlets exposed Era Vanguard’s leveraged Tesla position, while Tesla’s stock plunged amid coordinated short attacks and spreading panic. Chen Xi and Zhang Qingxue prepared to finish their work in China so they could support Zhao Zong if the crisis in New York worsened.

• Muddy Waters announced a short position targeting Era Vanguard, and Tesla fell below its $225 margin-call threshold.
• Chen Xi read reports on Era Vanguard’s holdings and pledge terms, then told Zhang Qingxue that the disclosures suggested insiders at multiple investment banks had supplied information.
• Zhang Qingxue urged Chen Xi to wrap up work at Yunnan Agriculture Group and prepare Henglong’s backup, while Chen Xi reported gains in Fenjiu and Henglong shares.
• Tesla dropped below $220 the next day as heavy selling and unconfirmed bearish reports about its factories, orders, staffing, and battery supply fueled panic.

After Citron Research announced that it had turned bearish on Tesla, Zhao Chen asked Lin Shicheng to explain how Citron differed from Muddy Waters. The chapter left Era Vanguard facing pressure from both detailed short-selling investigations and fast-spreading media-driven speculation.

• Citron Research published a report citing Tesla's falling deliveries, cash burn, and unreliable guidance as reasons for its new short position.
• Zhao Chen called Lin Shicheng to ask how much influence Citron had on Wall Street.
• Lin Shicheng explained that Muddy Waters built evidence-heavy reports, while Citron relied on public information, media attention, and rapidly changing calls.
• Lin Shicheng described Citron's past shifts between bearish and bullish views on Tesla and explained why Andrew Left's calls drew less lasting confidence.
• Zhao Chen understood that Muddy Waters and Citron posed combined professional and public-opinion threats to Era Vanguard.

Tesla’s share price neared $200 as Muddy Waters and Citron intensified their attacks, but buyers defended that level through the close. Elon Musk then issued a series of tweets disputing claims about Era Vanguard’s margin position, Tesla’s demand and production, and the short sellers’ reports, leaving the conflict openly contested.

• Tesla’s share price plunged toward $200, where large buy orders repeatedly blocked the decline and helped it close near $204.
• Elon Musk said rumors that Era Vanguard faced an imminent margin wipeout were false and that its additional margin was posted and its collateral secure.
• Musk argued that subsidy changes had already been absorbed by pricing and that growing reservations in Europe and China contradicted claims of peak demand.
• Musk disputed Muddy Waters’ interpretation of Tesla’s deliveries and production, and criticized Citron for reversing its outlook on Tesla.
• Musk said the Fremont Factory’s brief production-line adjustment was routine maintenance, not a shutdown caused by supply problems.
• Musk pointed to Tesla’s planned Shanghai factory and warned short sellers to consider what kind of company they were betting against.

Tesla rebounded above $210 after reports of progress at its Shanghai Gigafactory, but Morgan Stanley’s $10 worst-case scenario renewed pressure on the stock and alarmed Shen Zhiyi over Era Vanguard’s pledged shares. Zhao Chen defended the outlook to her, then declined Lin Shicheng’s call because he needed to speak with Musk.

• Tesla shares rose from about $206 to close at $212 after reports that construction at its Shanghai Gigafactory was ahead of schedule.
• Lin Shicheng and Zhao Chen reviewed Musk’s rebuttals to short sellers’ claims about demand, Citron’s credibility, and Fremont production pauses.
• Tesla shares later fell below $200 after Morgan Stanley analyst Adam Jonas cut his worst-case estimate to $10, and Musk accused the bank of helping short sellers.
• Shen Zhiyi worried that Era Vanguard’s pledged Tesla shares could become worthless if the extreme scenario came true, and Zhao Chen explained that Morgan Stanley still held a $230 price target.
• Zhao Chen declined Lin Shicheng’s call so he could speak with Musk.

Zhao Chen and Musk agreed to defend Tesla as Era Vanguard faced mounting liquidation pressure. After Zhao Chen committed Era Vanguard’s last $125 million in cash as collateral, he moved to prepare a pledge of its SpaceX equity, while Wall Street learned the firm had nearly exhausted its working capital.

• Zhao Chen spoke with Musk, and they agreed to meet at Cape Canaveral and put a floor under Tesla.
• Zhao Chen ordered Lin Shicheng to pledge all $125 million of Era Vanguard’s remaining cash as collateral, leaving the firm with warning and liquidation prices of about $194 and $178 per share.
• Lin Shicheng warned that SpaceX’s rules required board approval before its private shares could be pledged, and the process could take days.
• Zhao Chen told Lin Shicheng to prepare the SpaceX pledge documents and said he would seek Musk’s help with the board.
• Wall Street brokers pieced together news of Era Vanguard’s three collateral top-ups, and short sellers celebrated its dwindling cash reserves.

Zhao Chen met Elon Musk at Cape Canaveral and asked to increase Era Vanguard’s Tesla holdings after Musk refused to let him pledge SpaceX shares. Musk ultimately agreed, leaving Zhao Chen free to prepare a counterattack against the short sellers.

• Zhao Chen proposed pledging his SpaceX shares, but Musk explained that the board would reject the pledge.
• Zhao Chen offered instead to increase Era Vanguard’s Tesla stake without seeking a board seat or interfering in company decisions.
• Musk warned that exceeding 9.9% could threaten his trust in Zhao Chen and asked whether Era Vanguard still had money to invest.
• Zhao Chen said he had stayed with Tesla through its decline and declared himself his own ammunition.
• Musk agreed to let Zhao Chen buy more Tesla shares on the secondary market.