I'm the Dauphin in France

Chapter 1023: Give the Netherlands a Little Financial Shock
However, the news censorship not only failed to stabilize the share price of the Dutch East India Company, but instead aroused panic in the market.

Although almost all newspapers contained articles like "The situation at the Cape of Good Hope will not have much impact on the East India Company", the citizens of Amsterdam obviously preferred to believe news from other channels.

For example, there are a lot of pamphlets on the streets.

As early as the day when De Witte received the order from the Crown Prince, the printing factory in Brussels began to prepare these booklets in secret - this was a piece of cake for the French Press and Publication Agency, which had experienced the baptism of large-scale public opinion wars.

During this period, more than 3 pamphlets of different styles flooded into Amsterdam.

You have to know that the total population of this city is only a little over 17. Basically one copy for each household.

The content of the pamphlet mainly introduces the British army's offensive against South Africa and analyzes how serious a blow the East India Company will suffer after losing the Cape of Good Hope. The conclusion is that there will inevitably be a record loss.

Yes, the Dutch East India Company has been losing money since the Anglo-Dutch War ten years ago, but the amount is still within people's psychological tolerance.

All the Dutch are gritting their teeth and holding on, waiting for the company to find new ways to make money and turn losses into profits.

But the news in the pamphlet dealt a heavy blow to people.

What followed was a huge sell-off of the East India Company in the stock market.

Of course, this was DeWitt's doing.

Although he had only 33 Dutch guilders, or 400 million francs, in his hands, he followed the instructions of the Crown Prince and "sold" more than 240 million Dutch guilders worth of East India Company stocks.

As early as a week ago.

In a villa east of Amsterdam, the famous investor Acosta handed the signed contract to the "Scotsman" in front of him: "Mr. Maine, I wish you good luck."

Although he didn't understand what the "Scottishman" was going to do, the latter provided him with a business that was sure to make money -

He only needed to "rent" 4 shares of the Dutch East India Company to Maine - worth 40 Dutch guilders - to directly receive a benefit fee of 4 guilders from the other party.

Of course, Main did not pay him 40 guilders, but at the same time he would not take his shares away. Instead, he entrusted all of them to the Amsterdam Bank for supervision - including the shares themselves and the funds obtained from the sale of the shares.

On this basis, Main also deposited 4 Dutch guilders in cash in the Bank of Amsterdam as risk collateral.

Once Maine incurred losses from trading these stocks and the amount reached 4 Dutch guilders, which was his deposit limit, the Amsterdam Bank would have the right to immediately take back his stocks.

Then all the stocks and mortgage money were handed over to Acosta.

In other words, the latter can earn 4 rupiahs for free without any risk.

This is actually a very common short-selling and leverage operation in later generations, but it perfectly avoids all anti-short selling regulations of the Amsterdam Stock Exchange.

In fact, more than a century ago, the short-selling method of "naked short selling" had already appeared in the Dutch stock market.

It means that someone gathers a large group of people who hold a certain stock and forms a short-selling alliance.

Afterwards, these people began to sell the stock to the market, but due to the low trading efficiency of that era, many transaction orders would not be actually settled until several days or even half a month later.

Before that, they will sell the shares to other people.

This would quickly lead to a surge in market supply, causing stock prices to fall rapidly.

At this time, short sellers buy stocks at a low price, complete the transaction, and leave with the money.

Therefore, since the end of the 17th century, the Dutch stock market has strengthened supervision and prohibited "transactions without actual stock delivery." This means that if short sellers want to have a sufficient impact on the market, they must own a large number of stocks, which means they must first invest huge amounts of money.

However, using Joseph's method, the short seller actually owns the stock and can settle the transaction immediately.

At the same time, you only need to prepare a small amount of collateral in advance to increase the leverage tenfold or even dozens of times - as long as the stock price continues to fall, there will be no margin call.

In this way, De Witt used less than 20 Dutch guilders to sell 240 million guilders.

It is still a real sell-off, not "naked short selling".

Well, Maine is one of the traders under him.

Currently, DeWitt still holds nearly 10 shares of the East India Company to maintain the rhythm of market smashing.

Due to the massive sell-off and various negative news about the Cape of Good Hope, the stock price of the Dutch East India Company continued to fall.

Although the Dutch government invested nearly 150 million guilders to stabilize the market, the price fell to 397 shares per trading unit in just over ten days.

That’s a drop of 24%!

At noon on April 4, when the East India Company's share price fell to the integer mark of 11 shares per trading unit, market sentiment collapsed.

Without De Witt's continued operations, Dutch citizens began to panic-sell their East India Company stocks, and the country was in mourning.

Dutch Prime Minister Schmelpenninck wanted to legislate to ban the rampant pamphlets, but was opposed by the opposition in parliament - this was not in the spirit of freedom of publication.

This is the frustration of the Dutch Parliament at the moment.

The ruling party's support rate is not high, and the opposition party is hoping that you will get into big trouble so that they can get to power.

However, the situation in the Cape of Good Hope is now known to everyone, and even if all the pamphlets are forcibly confiscated, it will not have much effect.

As the East India Company's share price reached 420 per trading unit, the content of the pamphlets flowing into Amsterdam changed.

“A historic disaster, who should be held responsible for the situation at the East India Company?”

"It was the British invasion that destroyed the East India Company and destroyed our lives at the same time."

"The British have taken away the hen that lays eggs. How will the East India Company make a profit in the future?"

Some newspapers even began to publish similar content despite the news censorship - the directors, reporters and printers of the newspapers had all lost a lot of money because of the East India Company, and their anger had long since overcome their fear of the ban.

The national sentiment that had been aroused before, coupled with the real economic losses, led to protests on the streets of Amsterdam, demanding that the government send troops to retake the Cape of Good Hope.

Of course, the Netherlands does not have the strength to challenge the British at all now...

In the square in front of the Amsterdam Stock Exchange, a brown-haired young man stood on the base of the statue and shouted: "The shameless British are invading our Cape of Good Hope!

“The cannons that the British used to bombard the Cape were made from steel ingots from the Birmingham Kovac Steel Company.

“And this company was developed with our money.

"While the East India Company's share price was falling like crazy, their share price was rising by 12%!"

(End of this chapter)