What's wrong with me being a rich man?

Chapter 673, Section 441: Manipulation (4k)

Silicon Carbon Group has had good sales performance recently, but its stock price has not recovered.

According to its own weekly sales figures, it delivered 3846 and 4017 vehicles in the first two weeks of May, respectively, which also broke its own single-week delivery record.

Carbon Silicon had previously mentioned that the Lingang Plant 2 would release its capacity in the middle of the year. When its monthly sales exceeded 10,000, its weekly delivery was around 3000+. With the latest weekly delivery exceeding 4000, the industry has basically confirmed that the Lingang Plant 2 has officially started supplying.

Even today, the practice of Silicon Carbon Group publishing its weekly sales figures is still quite controversial. Some people ridicule it as a nouveau riche, while others are waiting for it to fall from grace. However, this method of rapidly spreading information through media platforms such as Weibo, Douyin, Baidu Knows, and Zhihu has undoubtedly greatly boosted the brand awareness of Silicon Carbon Kyushu.

When this week's sales figures are released, these platforms are trending topics; when that week's sales figures are released, those platforms are trending topics. With more exposure, you can naturally penetrate more potential customer groups.

Xu Xin really likes the new era's promotional methods that fully utilize the mobile internet, such as silicon carbon, which helps her stay informed and consider Today Capital's investment in the new energy industry.

However, the sales figures in the past two weeks have not boosted the stock price of Silicon Carbon Group at all. Since May, Silicon Carbon has fallen below 70 and has not recovered. The biggest negative factor is the progress of investigations by European and American media regarding BaFin, SEC and other institutions.

In Germany, media outlets have periodically reported on the possibility of criminal prosecution.

This inevitably raises concerns among the stock market and investors, and has led to more conservative recommendations from internationally renowned institutions, including HSBC and UBS.

In early May, HSBC gave a neutral Neutral rating, acknowledging the potential for steady growth in the Chinese market for Silicon Carbon Group, but also feeling that there were too many uncertainties surrounding the founder.

Compared to HSBC, JPMorgan Chase's view is more vehement. Recently, it issued an Underweight rating, suggesting that positions in Silicon Carbon Group should be reduced. It cited information disclosed by authoritative media such as the German magazine Der Spiegel, stating that the risk of Yu Xing being prosecuted by prosecutors is increasing, with the main charges being market manipulation and insider trading.

The most damaging news for Silicon Carbon Group's stock came from the latest report in the German business daily Handelsblatt, which cited sources close to senior management as saying that some offshore jurisdictions have agreed to cooperate with the EU and are willing to disclose information about some of the companies suspected of illegal activities listed by the investigation team.

When Xu Xin saw this latest news, her heart sank. She then noticed that the price of silicon carbide had fallen to HK$62, which was nearly 20% lower than the initial offering price.

The specific offshore regions were not mentioned in the report, but the target was extremely clear.

The investigation into Guo Shanfeng and Yu Xing is indeed being handled as a serious matter...

Xu Xin wanted to call President Yu to ask about the situation, but she felt that he must be very busy and under a lot of pressure, so she held back and waited until her husband came home before showing him the relevant reports.

"What should we do?" Xu Xin asked seriously. "How do we handle President Yu's situation? We've brought in a lot of powerful lawyers, so why is it still getting worse?"

"Oh, that lawsuit shouldn't happen." Li Song glanced at the documents a few times, knowing what his wife was worried about, and gave a confident reply, "Negotiations between the two sides are already progressing. Didn't we talk about that last time?"

He had previously discussed the legal protection of Mr. Yu in China, and the opinions he mentioned were all internal to the company, which mainly focused on negotiation and reconciliation.

However, I really didn't expect that offshore areas like the Cayman Islands weren't so safe.

Li Song was surprised by this, but fortunately BaFin had already flown in and out, and the German investment was basically confirmed. Over Peak hedge fund was about to be listed in Hong Kong, and he also needed to change the boundaries of his business.

Xu Xin naturally knew what kind of person her husband was. After carefully observing his expression, she asked, "Is there some particularly definite positive news? Does that mean we can buy shares of the Silicon Carbon Group? As soon as the news comes out, the stock will definitely rebound, right?"

“Hey, you’re in charge of Today Capital, and you still have to do this…” Li Song said with a serious expression, shaking his head repeatedly, “We must do things in accordance with regulations. We’d rather forgo short-term gains than compromise on compliance.”

Xu Xinwei said angrily, "What are you pretending for? Isn't now the time for you to go and do your 'real research' and ask me for money to short sell? Isn't now the time for me to go and try to get information and opinions from President Yu? What are you pretending for!"

Li Song: "Uh."

"Speak quickly!" Xu Xin was even angrier. "What news!"

After careful consideration, Li Song decided not to mention the German intended funding or the Mertz affair, but only to talk about the visit of BaFin Vice President Legler and the solidification of evidence in the silver manipulation case.

He described the situation to his wife as concisely as possible.

After listening, Xu Xin murmured, "Then it really is time to increase holdings of silicon carbon stock."

Li Song was alarmed, fearing that his wife might have actually engaged in insider trading. After all, Capital Today held a considerable amount of shares in Silicon Carbon Group, and the current drop in price made those profits look bad.

He warned solemnly, "Xu Xin, don't think like that, and don't do that. It could easily lead to trouble."

Xu Xin rolled her eyes: "You're so serious now. Hey, I've noticed you've been really putting on an act lately. You're always elusive. Why do you care what I think? Just mind your own business."

Li Song couldn't ignore it, so he could only reveal the latest news again, also with a hint of boasting, and said solemnly, "No, I have to make this clear to you. I can't just think about myself. The Over Peak Hedge Fund is about to be established, and I will be in charge of that aspect of the work. Your relationship with me is crucial, so don't mess things up."

Xu Xin stood there, stunned.

She stared at her husband for a full ten seconds before revealing an expression of disbelief, expressing her emotions in a single word: "You??"

At this moment, Li Song couldn't help but thank President Yu. The more he faced doubts, the more proud he became. He answered with a single word, nodding and saying, "Me."

Xu Xin was shocked and confused: "Do you have a certificate? How could it be you? Doesn't Yu Xing have anyone else by his side?"

“Of course, there are certified and on-the-job personnel, but I will be responsible for the main operations.” Li Song became dissatisfied. “What do you mean by that? President Yu only selected me after various investigations!”

Xu Xin: "..."

She really doesn't understand.

This time, there was a long silence.

Xu Xin shook her head: "If Guo Shanfeng is going to start a hedge fund, does he really need to coordinate with short selling? How large would it be?"

"The market is mainly bullish, but there are both bullish and bearish factors." Li Song paused here, feigning composure, "The scale is not large. The current confirmed amount is about 20 billion US dollars, and it may double by the end of the year."

Xu Xin's gaze was almost piercing as she stared at her husband.

Her skepticism was palpable: "Such a large fund, Yu Xing entrusted you with its management??"

Li Song politely said, "Welcome to invest. We are registered in the Cayman Islands and have set up a fund management company in Hong Kong. At present, the subscribed capital must be in place for no less than 80%, and the remaining amount can be subscribed within six months. The funds will be locked for two years, and after the lock-up period expires, redemption will be available once every quarter."

Peak hedge funds have a hard lock-up period, during which investors cannot redeem their funds. This provides a stable pool of funds, but it also undoubtedly requires a great deal of trust.

Since Yu Xing's identity was revealed last year, there has been a constant stream of foreign capital interested in hedge funds. For example, the German firm Mozart flew over this time because its hedge fund is about to officially start operations.

Xu Xin sneered instinctively: "Crazy? Unless I'm the one who's crazy!"

Li Song, unable to bear his wife's instinctive sarcasm, retorted, "Are you still going crazy? Boss Xiong has already raised the funds and is just waiting to invest." Xu Xin: "?"

“It wasn’t through IDG; it was a separate company set up privately by Mr. Xiong, and the funds are from within China,” Li Song said with no small amount of pride. “You still think Mr. Xiong is honest?”

Xu Xin never thought Xiong Xiaoge was honest, but she really didn't expect that he hadn't told her the truth at all.

She had discussed these things with Xiong Xiaoge before, and he said he had absolutely no interest in this area. She never expected that he would have already raised the funds...

Xu Xin fell into self-doubt and said blankly, "I don't understand."

"What don't you understand? You should look at someone with new eyes after three days' absence!" Li Song declared proudly. "You made a name for yourself with your investments and thought I couldn't do it right, but look at me now! President Yu is my mentor!!"

Xu Xin had no idea why President Yu was so happy...

She looked at Li Song in confusion; how could she possibly tell whether the other side was a donkey or a horse...?

Xu Xin had a bellyful of questions but couldn't ask them. After a long while, she murmured, "You made a public appearance at the Mountain Peak hedge fund. What am I supposed to do?"

“Don’t worry, President Yu also made requests when he talked to BaFin before, including stopping the investigations into institutions such as Red Falcon and Today Capital,” Li Song said. “Your matter has been settled.”

Xu Xin had communicated with President Yu about this before, and when her husband mentioned the specific situation again, she said helplessly, "Today Capital is completely fine."

Today Capital operates legitimately, isn't this just empty rhetoric?
Li Song shrugged: "That's the situation."

Xu Xin shook her head silently, deeply moved by what she had seen that night.

What's even more striking is that the changes at BaFin were reported very quickly.

In response to public concerns regarding the investigations into Guo Shanfeng and Yu Xing, German firm BaFin stated that it has no intention of pursuing criminal prosecutions, while simultaneously launching a new investigation into investment banks' manipulation of white money transactions.

These two events have been linked by sources who believe that it was the evidence held by Guo Shanfeng that made BaFin willing to negotiate a settlement rather than push for further legal proceedings.

As for a settlement, there will certainly be a fine, but compared to the initiation of criminal proceedings, this undoubtedly reduces the risk of involvement of the company's assets.

In other words, the BaFin investigation is very likely to end in an administrative penalty. Then, Guo Shanfeng will only face a number of troubles, including the US SEC, class-action lawsuits from European investors, a Japanese judicial investigation, and a lawsuit filed by the founder of Steinhoff.

Influenced by the latest news, the share price of silicon carbide immediately rebounded, surging from HK$61.7 to HK$68.2, an increase of 10.5%.

Following the positive news about BaFin, the U.S. SEC also announced its investigation into investment banks manipulating the silver market the following day, and it directly mentioned Shanfeng's contribution to the investigation, confirming some of the information reported by the media.

Guo Shanfeng did indeed hand over the evidence he had of investment banks manipulating the silver market!

How is this information obtained? And how do investment banks manipulate it?
If it weren't for the investigation, would the next short-selling move in the Over Peak Project have targeted investment banks?

BaFin and the SEC seem to have made a pact, as both announced that their investigations target three investment banks: Deutsche Bank, JPMorgan Chase, and Scotiabank.

Ironically, these three firms are also the three major members of the London Silver Fixing Price.

Deutsche Bank and Scotiabank remained silent at first, but JPMorgan Chase reacted strongly, completely denying the allegations made by BaFin and the SEC.

At the same time, a vice president at JPMorgan Chase also discussed the impact of the mountain being reported on.

"Guoshanfeng is a short-selling institution that manipulates the market. It should not have any credibility. I remain skeptical of the so-called evidence. There should be no valid evidence, whether in the relevant market or in Guoshanfeng's location."

"At the same time, I regret to point out that the Silicon Carbon Group founded by Yu Xing is a so-called new energy company that uses range-extending technology and is destined to be eliminated. It is completely dependent on cash subsidies from the Chinese government."

“Any public opinion that attempts to smear us should be examined for its stance, and any fabricated evidence should be examined for its legitimacy.”

Is there any evidence? Even if there is evidence, was the way the evidence was obtained legal?
JPMorgan Chase's stance is very tough; it has no intention of admitting defeat. As for the listed Silicon Carbon Group, that was merely a convenient emotional outburst.

Morgan Stanley has faced SEC investigations more than once or twice, and all of them ended without resolution.

This time... Morgan felt strange that Guoshanfeng was involved, but when he thought about the SEC investigation into it, he understood the purpose: the other party wanted to use him as a scapegoat.

Li Song had been paying close attention to public opinion surrounding the incident. Two days later, when he met with President Yu, he asked about it: "President Yu, Morgan Stanley is vehemently denying it. What should we do?"

“I’m not with the SEC, how would I know?” Yu Xing shook his head. “There’s a mole among their traders. It’s only a matter of time before he admits it. We’ve been… kind of made a target this time.”

He continued, "Don't worry about that, just do your job."

Li Song nodded repeatedly, then turned and went to the seventh floor, discussing Xiao Mo's activities with his colleagues along the way.

However, as soon as he sat down, he saw a secret hedge fund strategy document that discussed the possibility of Brexit and its potential impact.

After reading through the document, Li Song said to Zhang Yangxu, who had handed it to him, "Are you crazy? Are you suggesting we operate funds in this way? Unless I'm insane!"

Zhang Yangxu shook his head: "I don't understand, but this is an analysis report that the boss brought from Singapore."

Li Song asked in confusion, "What are the regulations in Singapore? Which organization specifically analyzed them? Who is behind this?"

“I don’t know, but there are opinions in the market about Brexit, and Soros Fund has issued warnings,” Zhang Yangxu said.

Li Song disagreed: "Who is Soros? He's a major short seller with very aggressive trading strategies, while we are..."

Zhang Yangxu's eyes shone brightly. "Go on, continue!"

Li Song paused, realizing this: "Don't judge a book by its cover," he thought, "I'm a globally renowned short seller myself..."

"Anyway, that's the gist of it. Besides Soros, O'Di Asset Management is also betting on Brexit," Zhang Yangxu said. "This is the guiding opinion. If you understand it, then consider how to implement it. If you don't understand it, then consider it during implementation."

Li Song was silent for a moment: "I don't understand."

Zhang Yangxu cast a glance his way.

Li Song rubbed his temples, feeling immense pressure. This was a disastrous investment; with President Yu's vast wealth and powerful connections, was he really going to jump into the river and swim...?

(End of this chapter)