Who Was the Hunter?

March 11, Tuesday.

Amid Wall Street's financial news, another piece of bad news broke: Credit Suisse Group, one of Bear Stearns' key partners, had ordered its traders not to conduct any transactions involving Bear Stearns.

In fact, this was a malicious distortion of the truth.

The story had started when numerous hedge funds went to Credit Suisse's brokerage division and asked it to accept their Bear Stearns trade contracts.

Credit Suisse then sent an email to its stock and securities traders, requiring that all transactions involving Bear Stearns, as well as other unusual business, receive approval from the credit risk manager.

But by the time the directive reached traders at other firms, it had been completely twisted, dealing Bear Stearns a severe blow.

The impact was immediately reflected in the stock market, where its share price plunged.

Yesterday, Huang Xiuyuan had shorted the stock with $84 million using two-times leverage, naturally making a handsome profit.

Bear Stearns' share price plunged another 13% by today's close, earning him around $21 million and bringing his available funds to $105 million.

But at the close, he gave up on further shorting and decided to wait and see. Even though he had spread his cash flow of over $100 million across dozens of accounts to attract less attention, those Wall Street hounds had extraordinarily sensitive noses.

New York.

Goldman Sachs headquarters.

In the president's office, a round-faced, balding old man was meticulously reviewing documents.

A knock sounded at the door.

"Come in."

A middle-aged white man walked in. "President Lloyd, the plan was a great success. A few small fish slipped in, though."

The balding old man didn't look up. He asked calmly, "How much?"

"About 800 million to a billion. Roughly half is offshore money, spread across various accounts. It's probably a few small-time speculators."

The balding old man stopped writing with his pen. "Is that so?"

"Should we adjust tomorrow's arrangements?" the middle-aged white man asked cautiously.

"Has it been confirmed?"

"Yes. Schwartz will issue a clarifying statement on CNBC tomorrow."

The balding old man narrowed his eyes. "Then there's no need to interrupt it. We'll put out another story in the afternoon. You handle the rest."

"Okay."

The sun was setting over New York, while Shanmei, across the ocean, was still in broad daylight.

After staying up all night trading, Huang Xiuyuan rested through the morning. He headed to the headquarters office in the afternoon, and when he passed Building One, he made a point of checking on the laboratory's progress.

The original factory building already had good infrastructure, so the lab was coming together much faster than expected. The construction might take less than seventy-five days.

After checking on the lab, he went to the second-floor office in Building Two. Lin Baijie shared the same office with him, though his own office was on the inside.

As soon as Huang Xiuyuan walked in, Lin Baijie hurried to his feet and briefed him on recent developments. "Mr. Huang, Fuguo ordered ten gas-fired generator units from Shengdong. The contract copy came through by fax this morning."

Huang Xiuyuan took the documents and skimmed them. The total purchase price was 8.5 million for ten 500-kilowatt gas-fired generator units, plus a set of spare parts and repair tools. Shengdong had promised a three-year warranty.

"No problem. Go ahead with this contract."

"Mr. Huang, the company is running a little short on funds," Lin Baijie reminded him.

"How much working capital do we have left?"

Lin Baijie pulled out a financial statement. "Aside from the money for the earlier contracts, we spent 36 million on land a few days ago and 6.8 million on transport vehicles. We may need around 30 million for the first phase of the factory buildings at Guizhuling Industrial Park, which we're still bidding for, and about 10 million for the waste-processing equipment, plus 8.5 million for the gas-fired generators we just ordered."

By the time he finished, Lin Baijie was getting nervous. Those projects alone had eaten up 90 million, and Suiren Company's working capital had dwindled to just over eight million.

Huang Xiuyuan remained calm. "We still have more than eight million, so there's no problem. I'll inject more capital into the company before the end of the month. Go ahead and do what you need to do."

Though the chairman had given his assurance, Lin Baijie wouldn't be able to sleep easy until the funds actually arrived.

"Oh, there's one more thing."

"What is it, Mr. Huang?" Lin Baijie took out a pen and notebook.

Huang Xiuyuan gave him a direct instruction. "Our company may still be small, but we can start arranging subsidiaries. Spin off the waste-collection business into its own subsidiary. We can also set up a subsidiary for gas sales."

"No problem. I'll have them registered before the end of the month."

The two discussed some other business, then Huang Xiuyuan went to the Software Laboratory to talk with Lu Xuedong about the company website and the industrial software platform they were refining.

Several programmers and engineers working on the improvements raised some issues with him. By the time they finished, it was already past seven in the evening.

Huang Weichang drove him home.

After he showered and ate, it was almost morning in the USA.

In the wake of the rumors, Bear Stearns' stock had taken a beating. The company's executives felt they had to issue another statement to clarify the situation regarding Credit Suisse Group.

March 12, 9:42 a.m. Eastern Time.

CNBC aired an interview with Schwartz. "Some people may have speculated that the company was in trouble because Bear Stearns is a major player in the mortgage business. But those rumors are entirely unfounded..."

The program then began airing good news about Bear Stearns, such as its ample cash reserves and strong first-quarter earnings.

As he watched the live broadcast, Huang Xiuyuan narrowed his eyes. This was different from what he remembered.

If he recalled correctly, when Schwartz got to the part about the company's ample cash reserves and strong first-quarter earnings, a news bulletin would interrupt him.

Interestingly, the bulletin CNBC had cut to was the scandal involving New York governor Eliot, who resigned after being caught soliciting prostitutes.

But this time, there was no "accidental interruption." It seemed there was a lot more going on behind the scenes.

He glanced at the stock quotes on another laptop. Bear Stearns had opened down around 6.3%, but as soon as the news aired, buying went wild, and within about five minutes the stock had turned green (U.S. stocks rose in green and fell in red).

Huang Xiuyuan moved quickly, using his own cash to buy shares.

Over the next hour or so, Bear Stearns' share price soared. The bears fought desperately to push it down, but they couldn't turn things around.

From an opening decline of 6.3%, Bear Stearns had surged to a gain of 10.2% by around 10:55 a.m.

The madness still wasn't over. At around 12:37 p.m., Bear Stearns' share price had climbed back to its yearly high of $71.24, a staggering 28.3% surge—a real roller coaster.

At that point, Huang Xiuyuan quickly sold all his long positions. Because he'd had to act in a hurry, he'd invested only a little over 60 million, but still made a profit of 17.34 million.

His main reason for selling was that, given the broader subprime mortgage crisis, Bear Stearns was bound to blow up sooner or later.

And those Wall Street sharks were surely planning to wipe out the competition. Once Bear Stearns passed $70, more people began selling their long positions, while purchases of short positions steadily increased.

That opening roller coaster had probably wiped out plenty of heavily leveraged bears.

If another piece of news suddenly broke and triggered another plunge, those speculators would be slaughtered.

Thank you all for your support, and thanks to the readers "Hao Gei Ren Dao Le" and "Danchun De Fugui" for the tips (ω｀)