What's wrong with me being a rich man?

Chapter 523 Dominoes

The sharp drop in BYD's stock price is very suspicious.

As pioneers in the field, Yu Xing and Liu Wanying have already dispelled the widely held belief that a new king of short sellers has arrived.

As for whether or not the DLF Foundation's funds should be invested...

Although Liu Wanying did not offer any specific advice, based on all the information available so far, she does not believe that it could cause such a significant negative impact unless BYD undergoes some undisclosed upheaval.

Yu Xing offered her professional perspective, but all she could provide was her understanding of the automotive market and changes in new energy policies. She also did not believe that such a destructive change could occur.

However, BYD's stock price has indeed nearly halved. It opened at HK$36.2 and has now plummeted to HK$19.1, wiping out more than HK$400 billion in market value.

This sharp drop, especially among listed automotive companies, easily evokes comparisons to the actions of Guo Shanfeng in the European market, and it's no wonder that many consider it the short-selling king's final act of 2014.

But Yu Xing knew that the truth was absolutely not like that.

He still issued the order to buy BYD's Hong Kong shares through Xiao Ying. Out of respect for the market, he did not invest all the funds, but only used US$2500 million.

Then, Yu Xing used his long-unused Baixiaosheng account to publicly speak out on the forum. First, he did not believe that Guo Shanfeng had made the move because of the incompatibility of their styles. Second, he gave a concise analysis of BYD's fundamentals and financial situation, and also mentioned the stability of new energy policies, expressing his incomprehension about the sharp drop in stock price.

Buffett did not reduce his holdings; the Russian business, which was rumored to have suffered exchange rate losses, was actually less than $100 million; electric bus orders did not shrink and the company's operations were normal; and there were no policy changes...

And, it wasn't Guoshanfeng who made the move at all.

Despite being known as a know-it-all, Dr. Yu, and the founder, Yu Xing's views on the stock price crash were still ridiculed.

"Short sellers are all driven by profit. Style is just something to refer to. You can't say it's not Guoshanfeng just because you say so. On the contrary, Guoshanfeng does the opposite. No wonder it's a short seller operated by Chinese people. They are well-versed in military strategy."

"Dr. Yu, you're so knowledgeable, why don't you just buy it!"

"BYD has been declining in the past two years. If Volkswagen can be faked, then BYD is even more likely to be."

"I can understand Mr. Yu's feeling of shared sorrow, since we're all in the new energy field and have a common interest."

Unable to reply to all the enthusiastic netizens, Yu Xing could only say that he had already bought some stocks under the constant urging to buy them, and pointed out that the stock price decline was narrowing and had risen back above HK$20.

BYD is listed on both the Hong Kong and A-share markets. Seeing that the stock price has indeed rebounded, some hesitant users tried to buy some shares in the A-share market after reading Dr. Yu's eloquent talk.

The Hong Kong stock market plunge began at 1:55 PM, with a maximum drop of 49%, resulting in a staggering loss of HK$429 billion in market capitalization. By the close of trading at 4:00 PM, BYD's decline had narrowed to 29.4%, but it still lost HK$257 billion.

In just two hours, a terrifying scene unfolded in BYD's secondary market.

DLF基金会的2500万美元最终买入的港股价格是19.83港元，相较于收盘的25.557港元已经拿到28.88%的浮盈，仅在一个多小时的时间里就变为3200多万美元。

After the stock market closed, BYD issued another announcement in response to market rumors and denied negative speculation.

However, while reporting on the afternoon's unusual events, various media outlets were also quietly working overtime, waiting to witness the arrival of the "King of Short Sellers," Guo Shanfeng.

It's probably a case of boarding the ship first and buying the ticket later.

We waited and waited, but the short-selling report on the mountain peak never came.

Yu Xing knew there would be no short-selling report. Not only would there be no report, but even his fellow short sellers might not claim responsibility for the attack.

He received a call from Yu Kai in his office.

Yu Kai hesitated for a moment, first mentioning BYD's sharp drop, then Mr. Yu's response on Baixiaosheng, and finally asked, "Mr. Yu, did you buy BYD stock?"

Yu Xing denied it: "No, I didn't buy it."

Yu Kai was somewhat surprised, not expecting that President Yu would actually be so stubborn on the forum.

Yu Xing continued, "I bought it with DLF money, I don't need the money myself."

"President Yu, Yu Xing, you!" Yu Kai exclaimed in astonishment, blurting out the same words, "How could you move that without permission..."

Yu Xing said to himself, "I've already earned several million dollars."

Yu Kai's questioning came to an abrupt halt: "President Yu, you... this... a general in the field may disobey orders, no wonder you've built such a large empire in Lingang. What is impromptu decision-making? This is impromptu decision-making! You're not some little stock market genius in Lingang at all!"

Yu Xing laughed and said, "Hmm? Can't this kind of speculation be considered a minor stock market genius?"

Yu Kaisheng exclaimed, "Of course not, you're the stock market genius of Lingang!"

Yu Xing frankly said, "Just like Alibaba, I thought that at worst I'd be stuck for a while, and even if I lost money, it would come back up later. It was just speculation, a joke among people. I'm not a stock market guru."

“Oh, Mr. Yu, but I still have to point out one of your shortcomings.” Yu Kai had digested the news of the profit and felt a little warm inside. “You’ve come across an opportunity, so why can’t you lend a hand to your brother? Tell me, and I’ll buy too. My Horizon Company is also short of money.”

Yu Xing pondered for a moment: "This is just a temporary study. Speculation is not something you can easily come across. A small portion of this profit will be used to buy shares of some large companies and then left untouched for a long time to see if it can support the operation of the foundation in the future."

This was something he had planned beforehand. The DLF Foundation faced some difficulties in the early stages, but it would definitely be able to become self-sufficient later on.

Yu Kai pointed out the problem: "Speculation, speculation, Mr. Yu, you said the same thing about Alibaba last time, that it's hard to run into anything, and you've run into it again in just one month!"

The DLF Foundation sold off Alibaba shares on the eve of Singles' Day, and as the results of the promotion were validated, Alibaba's stock price began to decline, falling from a high of $115 to $105.

Although Yu Kai wondered if it was possible to buy more at a lower price, Yu Xing explicitly rejected this idea, believing that it was better to wait a little longer.

In short, first Alibaba, then BYD, he now truly believes that Mr. Yu is quite skilled at stock trading.

"It was just luck. The main thing is that I don't think this was a short-selling opportunity coming from a high point." Yu Xing mentioned a very important premise, "Otherwise, I wouldn't have dared to just throw in $2500 million like that."

Yu Kai respects profitability; if President Yu says it's not, then it's not.

However, he couldn't help but gasp. Mr. Yu thought it wasn't a mountain peak, but what if he was wrong...? Well, all he could say was that Mr. Yu's audacious move left everyone speechless.

Yu Xing didn't think there was much to talk about in this operation, so he chatted with Yu Kai about the progress of his startup. When he finally hung up, he told him, "Don't tell anyone about buying stocks."

He recalled that the joke about "Lingang's little stock god, the carbon silicon Buffett" was leaked by the other party.

Yu Kai, with his big mouth, readily agreed.

He hung up the phone and browsed the Baixiaosheng Forum, which was still discussing the situation of BYD, for a while. He was captivated by President Yu's analysis.

Yu Kai held back until evening, and finally talked to his partner about the little stock god's operations, but instructed him not to leak the information.

Late into the night, the media, who were working overtime, still hadn't seen the "King of Short Sellers" appear, but instead, new news emerged.

It is said that the source of this plunge was a funding problem. A wealthy investor holding BYD shares was forced to liquidate his position by a brokerage firm because he failed to replenish his position in time. This triggered a domino effect under the Hong Kong stock market mechanism, ultimately leading to a panic sell-off.

This reason...

The Baixiaosheng Forum was skeptical of this claim, feeling it was merely a cover-up for short-selling attacks.

However, with the news that Chairman Wang Chuanfu was going to increase his shareholding, people had more faith in the previous news, but still felt it was too absurd... Could it be that the market value evaporated so much just because of this?
The afternoon following the sharp drop, news broke that Yu Xing, chairman of Silicon Carbon Group, had spent $2500 million to buy BYD shares at bargain prices, which boosted market confidence once again.

The Baixiaosheng Forum was utterly astonished by the scale of Dr. Yu's "buying some" stocks. How much confidence did he have in his own judgment to make such a move?

In addition, some users who were "lured" into buying at the bottom posted messages expressing their regret, saying that they only tried buying some and did not dare to make a big bet.

The second trading day ended, followed by a two-day weekend break, during which the relevant news would inevitably be further confirmed. In any case, the king of the bears never appeared.

That evening, Yu Xing received a call from Wang Chuanfu and heard his gratitude.

He explained the situation objectively: "Mr. Wang, there's nothing to thank me for. I just needed more funds, and I happened to come across your opportunity, that's all."

"Mr. Yu, both the purchase that day and the emergence of your news are supportive factors." Wang Chuanfu continued to express his gratitude objectively. "Moreover, you also spoke up for us on Baixiaosheng. Mr. Yu, thank you so much."

Yu Xing had this opportunity to further verify the situation of this sharp drop.

The information revealed by Wang Chuanfu is the same as what was previously rumored: a chain of problems caused by large investors.

He added, "It's also the fault of that short-selling firm, which went on a short-selling spree against car companies this year. We just happened to be caught in the crossfire, so we were definitely under pressure as well."

Yu Xing hummed in agreement and changed the subject, continuing to talk about his own progress and the launch of BYD's new car. The "Tang" will officially announce its price and open some pre-sales on the 20th of next month.

BYD ultimately set the price at 30 yuan for the standard version and 60 yuan for the speed version.

Upon hearing the price, Yu Xing remarked with empathy, "This market is tough; it depends on how well people are willing to accept it."

Wang Chuanfu shared the same sentiment, and after being approached by General Manager Yu to discuss the vehicle models last time, he felt even more apprehensive.

To date, no domestic brand has ever sold well at this price point.

After ending his call with Wang Chuanfu, Yu Xing felt more secure about the funds he had invested in through DLF. Although the stock price was affected and wouldn't immediately recover to its previous high, with the eventual easing of market sentiment and BYD's actions in the new energy sector, this speculative period would not last long and would not affect the normal needs of the DLF fund.

Everything went smoothly over the weekend, and the media outlets that were still hoping to see the market recover from the peak were completely disappointed and basically agreed with the absurd reasons for this round of sharp decline.

On Monday noon, Yu Xing met with Xu Xin, who had come to visit.

Xu Xin has been busy with business trips recently, and even all the necessary procedures are handled by others. In addition to seeing the final model and sales arrangements of "Jiuzhou" in Lin Hong Kong, she also mentioned her observations on the competition in the short video market.

She didn't talk about Alibaba and Tencent, but instead mentioned Kuaishou, which has a relatively low profile, and its daily active users.

Kuaishou's daily active users have exceeded 800 million, a number that far surpasses Douyin, which has received much attention from the media. While it is impossible to compare with "Leyin" and "Weishi" due to a lack of information, it should also be leading in this area.

Capital Today was in talks with Kuaishou, so when Xu Xin first learned about Kuaishou's data, she was genuinely shocked.

As one of the earliest software programs to enter this market, along with Weishi, it completely eliminated its previous GIF section in the middle of this year, becoming a pure short video app. Relying on its existing users, it has accumulated 1 million registered users.

Despite the fact that a lot of data has been inflated, Kuaishou's size and daily active users are still dazzling.

After Xu Xin finished his inspection, he thought about Kuaishou's differentiated competition and suddenly had a thought: Could it be that in the end Kuaishou will have to compete with the winner among Alibaba, Tencent and Silicon Carbon?

“Kuaishou is very focused on lower-tier cities, so its daily active user statistics may be different from ours.” Yu Xing told us about Douyin’s daily active user data. “Our current daily active users exceed 400 million. Yesterday I asked Xiaoying, and the highest it can reach is 420 million. 28% is quite high.”

Douyin currently has 1500 million users and 420 million daily active users, which is quite good. However, this ratio is still due to the fact that the quality of some traffic channels is not high enough.

Compared to Kuaishou's 1 million registered users and 8 million daily active users (800% of the total), if both platforms were to have their user base adjusted for inflated figures, their combined user base might reach around 15%. However, it's reasonable to believe that Kuaishou wouldn't surpass Douyin. Furthermore, the two apps have been developed at significantly different times.

After listening to President Yu's analysis and speculation, Xu Xin's surprise subsided considerably.

She pondered for a moment and said, "I wonder what Yueyin and Weishi are really like."

"It definitely won't be as high as ours." Yu Xing was very confident about this. "Weishi 1.0 attracted 5000 million users, and during the Spring Festival, the daily active users were inflated to 4500 million, and then that was it. I think Liu Chiping is leading Weishi 2.0 this time, and he has definitely squeezed out the inflated numbers. He didn't do any of those messy numbers to lead. Leyin's situation is a bit special. The traffic activity on Weibo may also be quite high, but we believe that it is already getting closer to Weishi 1.0."

The 1.0 version of Weishi had many problems; otherwise, it wouldn't have reached 5000 million users before suddenly crashing.

Because Xing Hongyu switched jobs to Lingang, Yu Xing was very clear about these data.

Yu Xing talked about the competitors, then returned to Douyin itself, saying, "It depends on how well we can seize the opportunity for viral growth during the Spring Festival. They are very confident now, and there will be even more smartphones next year, so the market is developing rapidly."

This month, 4G licenses were officially issued. Thanks to testing and opening in some cities before the official issuance, the number of 4G users in China has already exceeded 90 million. 4G phones like the Apple 5S, Xiaomi 4, Huawei Meta 2, and even the Coolpad F1, which are priced around 1,000 yuan, have already been launched. And they will definitely be even more popular next year.

This rapid penetration of hardware infrastructure is naturally closely related to the software market and will continue to provide strong support for the development of short videos.

(End of this chapter)