Reinventing the Millennium.

Chapter 777 Shorting Lehman (5K)

In August and a half, Yike, a listed company, held a press conference at Hang Lung Building in Shanghai.

On this day, not only several mainstream media and almost all influential financial media in the Mainland, but also Internet news media such as Sina, Netease, Sohu, Penguin, two Hong Kong media, and two American media all came to the scene.

It was just a corporate press conference, but the event was unprecedented.

After all, this is the first stock of a mainland company to be shorted in the U.S. stock market, which has a record-breaking historical significance. Regardless of the result or not, it will probably be mentioned when talking about "short selling" in the future.

Moreover, Lehman Brothers issued two short-selling reports in a row, and it would be fine to change to someone else, but its short-selling targets are well-known in certain circles in China.

Yike's electronic products still have quality assurance in the mainland, but Chinese consumers do not have a hard demand for iMusic, and they have a variety of choices in terms of hardware products.

For everyone, Yike's more label is Fang Zhuo, the richest man in the mainland.

When Lehman shorted Yike, it was also shorting Fang Zhuo.

At 08:30 in the morning, the conference hall on the 21st floor of Hang Lung Building was already overcrowded.

At this time, it can be seen that there is a difference between intimacy and estrangement.

In the best position in the first row, apart from the big newspapers, there is only one online media, Sina.

In addition, many people at the scene also acted as front-line experience officers of Zhihu in addition to their identities as reporters. This is more convenient to sit in the back. Some journalists sitting next to each other can’t help but see each other’s Zhihu pages browsing on each other’s notebooks. They looked at each other and smiled, feeling very close.

——What do you think of Yike being shorted by Lehman Brothers?

——If you were the chairman of Yike, how would you deal with this matter?
To this day, Zhihu still adopts the invitation system, but the speed of fission is somewhat unexpectedly fast, which gradually makes such a question-and-answer community famous on the Huaxia Internet.

And precisely because the user groups formed in this way have certain status and capabilities in all walks of life, one of the things they often do is to give advice.

Last time, the famous Rhubarb boss title incident was because he broke the defense after being pointed out in various ways. This time, the person who was pointed out became President Fang. It is considered by many to be retribution.

Generally speaking, answers such as "more detailed data", "rational communication with Lehman", "scientific short-selling methods", and "if there is any change, if there is no improvement, then more encouragement" have become the mainstream answers to the question.

At nine o'clock, Fang Zhuo walked into the conference hall with a smile on his face, and the atmosphere was suddenly quiet, followed by the "click" of the flash.

"It's time, and it looks like everyone is here. The weather has been really hot in the past few days. Thank you for your hard work."

Fang Zhuo waved his hand, held the posture for two seconds with great experience, and gave everyone the material to take pictures.

Anyway, it will definitely be photographed, and of course it will leave a better side for everyone.

He only chattered a little, and then immediately got to the point: "I was surprised that Lehman shorted Yike. Many friends also called with both surprise and concern. I still have to say thank you here today."

"But from the perspective of the company and the market, I think the current share price of Yike has proved everyone's views on Yike and Lehman."

"Compared to the day of the short-selling report, Yike's stock price has fallen by 3% today."

Fang Zhuo pursed his lips, and said solemnly: "I think this drop is somewhat disrespectful to Lehman. Considering how much public opinion has paid attention to this matter, I'm also a little sorry for everyone's enthusiasm."

He shrugged and smiled helplessly: "The market has proved that the global sales volume of the entire music player has increased from 120 million → 500 million → 2500 million → this year's expected 4100 million. Such an increase is recognized by everyone, not just relying on thunder Mann can be wiped out with a paper report, so it is strange for me to sit here today, sales and stock prices are here, what else do I need to respond to?"

Fang Zhuo talked eloquently and looked around: "But since there is such a press conference, let's talk according to Lehman's logic first."

Following this sentence, the main points of Lehman's short report were released on the projection screen.

The first is the performance of the Chinese market, the second is the fierce competition with competitors, and the third is the bleak prospects for new mobile phone businesses.

Fang Zhuo held up an index finger and said simply: "The performance of the Huaxia market cannot be attributed to Yike, a company. The sales volume of the products I mentioned just now did not include the domestic market. The performance of the stock price is based on the global market." of continuous growth.”

He pondered for a while: "Because the friend company Apple has been spreading news about the mobile phone project, the second and third items are put together."

"Eco has never been afraid of fierce competition. If he was afraid of this at the beginning, how could he have the courage to challenge Sony?"

"Instead, it was the fierce competition that transformed Iko, and I've always been proud of that."

"However, there are many factors related to the success or failure of the project. My judgment is different from that of Lehman. In Lehman's eyes, the market shares and positions of Nokia, Blackberry, Samsung, Sony Ericsson and other mobile phones are in my judgment. field intelligent innovation."

Fang Zhuo got up suddenly when he said this, and invited the three middle-aged people sitting next to him in the first row.

Some reporters at the scene knew these three people, and without waiting for Mr. Fang's introduction, they informed their counterparts of the identity of the deputy general managers of China Mobile, China Telecom and China Unicom.

Fang Zhuo introduced the identities of the three guests one by one in an environment of quiet discussion on the spot.

Then he said: "To make a mobile phone, Yike is definitely not fooling investors with a new business. We are actively working with excellent partners to promote the progress of the mobile phone business. Today, I just take this opportunity to announce something .”

Fang Zhuo explained Google's unannounced but upcoming decision: "The three operators, China Mobile, China Telecom, and China Unicom, will form an Open Mobile Phone Alliance with Google, China Mobile, Bingxin, and Android. Committed to the development of a smartphone system named 'Android', which will significantly reduce the development and promotion costs of mobile devices and services."

There was some commotion in the conference hall, why did it suddenly turn here?

Open Handset Alliance?Three domestic operators?
If you only talk about Yike and Google, it still sounds unreliable.

However, the three major domestic operators have come together. This supportive gesture at least proves that Yike or Mr. Fang has strong resource support in China. Similarly, the operators may not just support one Unreliable stuff.

However, everyone is still a little confused, the smartphone system?Is the current mobile phone system not smart enough?Where to put Saipan?
After Fang Zhuo made the announcement, he handed over the microphone to the senior management of domestic operators to talk about this cooperation with Google.

This is a recent advancement.

At the same time, just as Apple has changed its publicity strategy after assessing the situation, it has gradually revealed information about mobile phones. Although Yike still has many problems to solve, it does not prevent it from releasing good news.

According to Fang Zhuo's plan, it really doesn't work, the prototype can be released next year, the sales interval will be longer, and a brand image must be established first.

The narrations of the deputy general managers of the three operators were rather boring, and they were mostly about cooperation. They came here as a friendly support, and some of them were not business-side considerations, but personal relationships with Mr. Fang.

When Fang Zhuo saw that the three had finished speaking, he was still puzzled, knowing that it would not be something that he would be able to explain clearly in a while.

He took the microphone again and talked about the factors that are easy to understand: "China Mobile, China Unicom, and China Telecom are excellent partners. Yike has excellent market experience. Did I just mention Bingxin? Bingxin is negotiating with Qualcomm. In addition, Yike has obtained Sony's patent authorization for mobile phones."

"What I want to say is that Lehman thinks that Yike's prospects for making mobile phones are bleak, but we are gathering excellent partners and trying to build a system of competition, rather than a local battle between companies."

"I don't know if Lehman has done enough research, or rather, I'm not sure if Lehman has the ability to judge the merits of this competition."

"But I am very confident. Just like a few years ago, I believed that music players combined with the Internet are the choice of the next era. Now, I also believe that a sufficiently open system and a sufficiently intelligent mobile phone are inevitable in a larger era. .”

"China Mobile, China Unicom, China Telecom, Yike, Bingxin, Google, Android, Sony, and more potential partners such as Texas Instruments. Is this an industry trend that Lehman can judge?"

"How many... How many first-class practitioners does Lehman have?"

"What qualifications does it have to issue such a report opinion?"

Fang Zhuo showed a contemptuous smile.

The Sina reporter in the first row immediately pressed the shutter, causing other reporters to subconsciously follow suit.

A few seconds later, Fang Zhuo stopped taking pictures, took a sip of water, and continued: "Lehman Brothers has the identity of a Wall Street investment bank, and it is the first time for a mainland company to experience short selling. I can understand everyone's surprise and concern. Actually, The financial performance of our Yike Company is included in the financial reports that are regularly announced, and the prospect of the mobile phone project will also be released in a timely manner in the days to come."

He paused: "Let's talk about Lehman's short-selling action. Such behavior is not uncommon in the US financial market. Yike neither suspended trading nor fell by [-]% or [-]%. I think Lehman should have Realizing their misjudgment, they should stop immediately, which is the practice of mature companies.”

"But I have serious doubts about whether Lehman is a mature and responsible investment bank."

Fang Zhuo said lightly: "Lehman Brothers has never had any communication with Yike. I don't know if its short-selling behavior is related to the dispute between me and Lehman President Fuld."

"There are also reporters from Bloomberg and Wall Street today. I hope you can truthfully report my views."

"I still maintain that Lehman Brothers was acting irrationally in the financial markets."

Mr. Fang spoke at a fast pace today, telling all kinds of information one by one, hardly leaving much time for the reporter to think, but when everyone heard Mr. Fang started to criticize, they still involuntarily raised their spirits.

Just now Mr. Fang said that Lehman is not qualified to judge mobile phone projects, but now when we talk about the financial market, how can Mr. Fang judge the business of an old investment bank?
Fang Zhuo looked at everyone's eyes, and was very happy to finally reach his favorite part.

He snapped his fingers, and the secretary immediately switched the projection to the prepared PPT.

1. The performance of US housing prices since June this year.

2. The CDO contract of Lehman Brothers.

3,_________.

Of the three projected points, only two have clear titles.

Fang Zhuo did not explain the third point, but talked about the housing price of the first point: "If you want to talk about Lehman, you have to start with the US housing price. Simply put, after the Fed's continuous interest rate hikes, I think the US housing price has ushered in a new era. Inflection point."

The PPT is updated in a timely manner, and the data to be said is played out.

"Everyone look at the screen. Standard & Poor's knows it. Its Case-Shiller house price index is a pointer to measure changes in U.S. house prices. Since the second half of the year, housing prices in 20 of the 18 largest cities have increased compared with the previous quarter. have all declined.”

“Another nine of these big city homes are already cheaper than they were at the beginning of the year.”

"Do you guys know what this means?"

"In the past six years, the average increase in U.S. home prices has exceeded 6 percent."

"The situation in the second half of this year, there is no doubt that its house prices have ushered in a worrying inflection point."

After Fang Zhuo finished speaking, he released data other than the S&P to support his point of view.

Today's press conference is held in the East, in China, in Shanghai, not in New York or the United States, and he doesn't think his words can change the hard-won U.S. real estate and subprime debt markets. It's better to talk about the situation in foreign countries. in a good mood.

When some data is released, the argument on the inflection point of housing prices is over.

Fang Zhuo began to talk about the second point: "CDO is a collateralized debt obligation. You should not be very familiar with this, because our financial market hardly involves this aspect, but its performance is very important."

Most of the reporters in the conference hall were at a loss.

What are CDOs?What's the point of being here?
It can't be blamed for their behavior.

The domestic market cannot keep up with the prosperity of financial innovation in the United States. At the end of 2005 last year, China Development Bank launched the first debt asset securitization project. That was the first small step in trying CDO. Most practitioners did not listen However, I don't care about the situation in the American market thousands of miles away.

What really made CDO famous was the financial crisis not long after.

Fang Zhuo briefly introduced the key points: "CDO is to package a certain number of subprime loans together. For example, select 1000 subprime loans in different cities, package them into a combination, and divide them into several levels. The highest level is called priority."

“The definition of this priority is that it has the highest default immunity. For example, the first 10% defaults in this portfolio do not require the holders of the priority to bear losses. Correspondingly, its yield is also the lowest in the portfolio. "

"And the lower the level, the higher the yield."

"Because the loans in the portfolio are highly dispersed, the agency estimates that the probability of priority default is extremely low, even lower than the probability of default on U.S. Treasury bonds. The rating is set at AAA, which makes it extremely popular in the financial market."

Fang Zhuo said: "Let's mark this AAA first, it is very important."

After finishing this sentence, he continued: "A bunch of flawed loan businesses have been packaged, and some AAA-level financial products that are not inferior to national bonds have been separated from them. Is there some strange problem with this logic?"

"In the final analysis, subprime loans are still subprime. No matter how they are mixed and packaged, they are based on the US real estate market. If the US real estate market fluctuates, financial products based on this foundation will fall into great risk, because, There's leverage in there."

Fang Zhuo was a little tired, drank another saliva, and said: "As far as I know, Lehman Brothers has invested a lot of energy in the CDO market. It ignores the risks brought by secondary and believes that the real estate market still has a lot of room. , which will inevitably lead to losses in its subsequent business.”

"So, I still stick to my views in New York today, and I am not optimistic about the future performance of Lehman's stock price."

A string of unfamiliar information to digest.

Although Mr. Fang confided his conclusion, many people remained silent.

It was the reporter from Xiangjiang who had some understanding and the quickest response, so he questioned loudly after a few seconds: "Mr. Fang, you said that you are not optimistic about Lehman. Is there any evidence for your boastful talk?"

Fang Zhuo said unexpectedly: "Didn't the US S&P data show you? The US announced that there are 4000 billion to 5000 billion subprime loans. These transmissions to the CDO market have almost doubled, from last year's 11% increase to This year's sudden decline, please judge this sudden turning point, what will happen next?"

Xiangjiang reporter shook his head again and again: "This kind of data combination is not rigorous. Mr. Fang, Lehman is not optimistic about Yike. It is not only bearish, but also started to be short. It is not just exaggeration."

Since the press conference started, Mr. Fang has been talking at length. Not only the reporter from Xiangjiang, but many people present feel that Fang always deliberately draws out surprising conclusions to divert attention.

Fang Zhuo showed the most relaxed smile in the field, and said: "Coincidentally, Lehman shorted Yike because it was not optimistic about it. I am not optimistic about Lehman now, and I also shorted it."

Hearing such words in the conference hall, there was a lot of discussion.

Lehman shorted Yike, Mr. Fang shorted Lehman? !

Sounds more like an act of anger.

"Lehman has a short position of about 2000 million U.S. dollars in Yike, and I also bought a half-year short position, so let time tell." Fang Zhuo said lightly, "Oh yes, I just said that let The AAA level marked by everyone, out of strong disbelief towards Lehman, MIGA Fund cooperates with Bank of China to launch financial products with Bank of China as the main body against Lehman’s short position.”

"In such a financial product, I set aside the AAA-level part that will hardly cause losses, and the lower level is filled with my 2000 million positions."

The mainland cannot directly short Lehman, so the Bank of China cooperated with Bank of China, a member of Xiangjiang, and used the position of Bank of China to act as the main body of the product to complete the short-selling in a disguised form.

At the same time, in order to comply with the regulations and avoid theoretical risks, Fang Zhuo’s funds have taken on probabilistic losses, and the ratings bought by others are all AAA, that is, the priority of not needing to bear losses just mentioned.

Fang Zhuo faced the camera and grinned: "That is, everyone is welcome to invest money together to verify Lehman's business prospects."

He knocked on the table with his finger: "You can tell who is right and who is wrong. If you short Lehman, you can't lose money if you buy it, and you can't be fooled if you buy it."

The atmosphere in the conference hall was confused and strange, and everyone felt that things seemed to be getting interesting.

In this case... the risk is always borne by the party, everyone will watch the excitement?

You can’t lose money if you buy it, you can’t be fooled if you buy it, but you can buy the experience of fighting side by side with the richest man in the mainland to short Wall Street giants!
(End of this chapter)