Black technology: a super empire spanning two worlds

Chapter 353 [Eight Departments Jointly Summon Likang Technology for Talks]

It is certain that once the news of Likang Technology being summoned for talks breaks out, its stock price will definitely plummet. As panic spreads, it will inevitably spread to Lingjing Technology, causing it to crash as well, resulting in a stampede-like sell-off.

Yun Shu checked her company's stock price on her phone and then said, "Lingjing Technology closed up 0.86% today, with a stock price of 635.39 yuan and a market capitalization of 55.15 trillion yuan. At least 15 trillion yuan of that market capitalization is due to the strong expectations surrounding Liuguang Xingyu."

The implication of her words was that once news of Likang Technology being summoned for talks spread, investors across the market would certainly believe that the core logic supporting Lingjing Technology's 15 trillion yuan market capitalization growth had disappeared.

This will lead to a situation where valuations and underlying logic are being eroded, and those that went up will come down in the same way.

Moreover, there is a high possibility that panic selling and short-term panic selling could lead to further inertial declines.

When Yun Shu asked about intervening to stabilize the secondary market, Xiao Yu thought for a moment and then rejected the idea, saying, "We can't intervene to prop up the market. Once we set that precedent, we'll easily be held hostage by the capital market."

Xiao Yu turned to look at Yun Shu and added, "If they are certain that we will come out to support the market and bail them out, they will definitely become even more unscrupulous in their speculation in the future."

Yun Shu thought for a moment and couldn't help but nod: "That's true."

Besides not wanting to be held hostage by the capital market, Xiao Yu had looked at the current share distribution of Lingjing Technology. After the adjustment in October, there were not many shares concentrated above the 400 yuan price level.

In other words, more than 95% of Lingjing Technology's current holdings are held by investors who have already profited.

If a sharp drop does occur, the vast majority of holders will only face profit retracement, not losses, because Lingjing Technology's current stock price is not cheap, and retail investors who already hold the stock entered the market much earlier and have a substantial profit cushion.

As stock prices continue to rise, fewer and fewer retail investors who didn't get involved earlier can afford to buy now.

The recent surge was mainly driven by institutional funds and quantitative trading. When these funds get trapped, it will be even less likely that Xiao Yu will prop up the market to save them.

……

The following day, Friday, February 22th.

丽康科技早上竞价以7935.60元的开盘价低开-5.68%，昨天仲信证券的唱多“余威”仍在，9点30分开盘之后进一步快速下探至-9.87%水位。

However, the decline quickly stopped and rebounded. Quantitative funds began to go long in the opposite direction because the stock would rise after a rapid pullback and deep trough, which would create a lot of arbitrage opportunities. This also included the speculative funds that were trapped yesterday trying to save themselves.

At the current price, retail investors can only watch from the sidelines, while large funds and quantitative funds are playing against each other on the trading floor.

The main force behind Likang Technology is quantitative funds, and it is a stock where quantitative funds are concentrated. The current game can be described as a competition among various quantitative institutions to see whose quantitative trading model is more powerful.

As time went on, around 11:17 AM, Likang Technology's stock price climbed steadily amidst fluctuations, breaking through the zero line and turning positive.

However, after turning positive, it only fluctuated and flattened around the zero line, because when it rose, the selling pressure immediately surged.

At 11:30 AM, when the morning session ended, Likang Technology was down slightly by -0.12%. Spectators watching the show were full of praise, exclaiming that it was incredibly strong, managing to recover from every intraday dip, offering astonishingly large arbitrage opportunities, and demonstrating remarkable resilience.

If the market can reverse course and repair the upper shadow line created by Zhongxin Securities' bullish sell-off yesterday in the afternoon, then it can be basically confirmed that the sixth major upward wave is about to begin.

But just as everyone was eagerly anticipating whether Likang Technology could emerge from its sixth major upward wave, a sudden piece of news at noon was a black swan event, immediately causing a huge shock in the capital market.

Around 12:19 PM, major market data platforms pushed out a news flash via pop-up:
[Financial News Agency, this morning, eight departments jointly conducted a regulatory interview with Zhou Chengyang, founder, actual controller, and chairman of Likang Technology. An internal senior executive confirmed to reporters that the news is true.]

This breaking news caused a huge stir in the capital market, spreading rapidly among investors, highlighting the fact that it was a big deal.

Various financial media outlets and influential financial figures widely reposted this breaking news.

In less than half an hour, the news that Likang Technology had been jointly summoned by eight departments became a trending topic on the internet. It was not only widely circulated in the capital market, but also sparked heated discussions across the entire internet after it became a trending topic.

[Haha, great! Well done!]
[This news is truly gratifying; Old Zhou has gotten too cocky and lost his way.]
[Unexpected, yet predictable. I've said before that Lao Zhou's high-profile behavior was a recipe for disaster, but he hasn't learned his lesson and trouble was bound to follow sooner or later.]
[Old Zhou: It's so spicy! It's so hot! It's like a calf!]
[I knew it! Old Zhou was using the banner of "rejecting technological progress is a regression of civilization" to morally blackmail people, completely disregarding the enormous harm it would cause to society, insisting on introducing the Flowing Star Language robot into various industries. Well, look what happened! The iron fist may have been late, but it arrived. It's not a pleasant feeling, is it?]
[They should have been summoned for talks long ago. Letting Likang Technology run rampant like this has only made them rich, while they've created hundreds of millions in unemployment and various negative impacts, all of which they're blaming on the government. They seem quite pleased with themselves. I suggest a strong crackdown!]
[By the way, did anyone buy into Likang Technology this morning? Are you panicking after seeing this news?]
[How many retail investors can afford this stock right now? Even the lowest lot costs over 700,000 to 800,000 yuan, and it's listed on the Beijing Stock Exchange. Even if someone could, they would be extremely rare.]
[The retail investors who can still afford to buy now are also wealthy big players.]
[Get a bench, let's watch the show.]
[I watched him build a tall building, I watched him host lavish banquets, I watched his building collapse.]
……

The news that Likang Technology was jointly summoned by eight departments quickly went viral and won praise from millions of netizens across the internet. In particular, those who had recently suffered from severe unemployment anxiety were greatly encouraged and felt gratified upon seeing the news.

Meanwhile, in the capital market, those holding shares in Likang Technology and those speculating on related industry chain concept stocks have seen their panic index skyrocket due to this sudden negative news.

When the market opened at 13 p.m., all eyes were on Likang Technology.

With thousands of investors watching, Likang Technology's intraday chart plummeted immediately after the afternoon opening, breaking through the previous low in just a few seconds and hitting a new intraday low, continuing its downward trend.

In less than five seconds, the stock price plummeted to 5889.53 yuan, a drop of -30.00%, hitting the daily limit down.

Likang Technology, with a market capitalization of 3.9 trillion yuan, was hit by a drop of 30% by just 17.5 billion yuan, and less than 18 billion yuan of funds successfully escaped in the afternoon.

Undoubtedly, this was caused by the collapse of quantitative funds. When a major negative event was detected in the market, the quantitative trading triggered sell orders, causing the quantitative programs to overshoot each other, resulting in none of them being able to exit.

Even quantitative trading programs capable of processing 300 orders per second haven't processed many orders, let alone human hand speed. Two speculative funds sold about a third of their capital when the price rose in the morning, and the remaining funds were trapped inside because they couldn't sell in time.

The onlookers were all astonished, exclaiming that such a large stock had been sold off so drastically.

Even retail investors watching the show couldn't help but feel lingering fear. In an instant, 30 points were gone. If there's another deep gap down tomorrow, the stock could be halved in just two days.

At that time, the amount of sell orders on the limit-down board of Likang Technology reached a terrifying 379 billion yuan, of which 70% were from various quantitative funds that were stampeding down, and as a result, none of them could get out.

……

(End of this chapter)