From legendary short seller to god of American capital

Chapter 417 The Gang That Vanished a Century Later: A Grand Plan for One Strike

Hearing that Larry wanted the Frenchman Lyon, Baruch rushed to the trading floor and called him to his side.

"Mr. Livingston wants to see you in. He wants to offer you a new position, a much better-paying job than this one." Baruch patted him on the shoulder and practically dragged him to his office.

"But, Mr. Baruch, I actually quite enjoyed my time at the brokerage firm—I feel Wall Street needs someone like me," Lyon argued.

"Young man, Mr. Livingston needs you more! You should know that he is our sales department's greatest client!"

As he spoke, Baruch shoved Lyon into his office with a forceful push of his shoulder, then slammed the door shut.

In the office, Lyon argued a few words in French, but Baruch refused to open the door. He had finally found a chance to get rid of this strange man, so how could he let him out?

Then Baruch heard Livingston's voice—and then Leon's voice followed into the office.

This is the Frenchman being called in by Mr. Livingston to speak!

Baruch felt a surge of relief, dusted himself off, and stood aside.

However, just two minutes later, the office door opened, and Lyon walked out looking completely bewildered.

Baruch's heart sank, thinking that Livingston didn't fancy him, or worse, that this blockhead had really angered him.

client----

To his surprise, Leon said to him in a bewildered tone, "Mr. Baruch, my God! Guess what? Mr. Livingston is giving me $50 a week and telling me to report to Boston immediately."

"Oh, that's wonderful, son, I'm so happy for you—wait, you just said weekly wage—how much?"

"—$50!"

"--Really?" Baruch swallowed hard, suddenly realizing that his joy at getting rid of the Frenchman had been halved. The front desk manager at Reading only earned $38 a week, and he had just become the acting general manager, earning only $52 a week.

Lyon, the young Frenchman, seemed to take a moment to process this immense surprise. He then stepped forward and grasped Baruch's hand tightly. "Thank you! Mr. Baruch! Thank you for recommending me to Mr. Livingston. With such a generous salary, I can continue my studies!"

Baruch nodded with difficulty and asked, "Did he send you to Boston? To his bank branch?"

Lyon looked bewildered again. "You mean, Mr. Livingston is still a banker? No, he just told me to go to a securities clearing house in Boston called the New England Clearing House—and report to a man named Matthew Browning."

"Is this a clearinghouse?"

"Perhaps—Mr. Livingston said my company is desperately short-staffed, but—" Leon hesitated, "but Mr. Livingston said he wanted me to find Mr. Browning—to learn drawing first?"

Baruch was puzzled. "What drawing?"

"I don't know either—but this is my first assignment. He told me to leave now, get to Boston by tomorrow morning, and be back in New York with the charts by noon on Sunday. This is the first assignment Mr. Livingston gave me!" Leon said loudly.

Baruch nodded, stepping aside to make way. "Then hurry up and go. Remember—" Baruch patted the young Frenchman on the shoulder, his tone becoming sincere, "Mr. Livingston may be very young, but it's your good fortune that he's taken a liking to you. You must do your best and not let him down; this is very important to you!"

Lyon nodded blankly, then looked up and met Baruch's eyes. "So, Mr. Baruch, since you admire Mr. Livingston so much, if one day he offered you a job at his company, would you do it?"

Baruch paused, then said in a deep voice, "I couldn't be happier!"

On Wednesday, Larry occupied Baruch's office without any remorse, and Baruch felt it was perfectly justified.

Larry had been studying the National Ropes stock chart drawn by Lyon, but the chart was somewhat obscure, and Larry also had to compare it with the price list tapes compiled by Reading.

Meanwhile, more information has been gathered here.

Mr. K went to Pearl Street to find Abel Rothstein, and while he was there, he went to the Dead Rabbit Gang to retrieve Larry and his own profits.

When Mr. K placed the dozen or so stacks of banknotes, which were wrapped in thick brown paper bags containing the couple's profits, in front of Larry, Larry only glanced at them casually before turning back to study the paper strips.

"Boss, this is your profit from betting on Cleveland's election as president, totaling $12.5 in principal and interest—I've already pocketed my profits," Mr. K said with a smile.

Larry nodded casually, his eyes still fixed on the paper strip.

"—Also, this is something Rostan asked me to give you." Mr. K took out a folded piece of paper from his pocket. "Rostan said this is the first reward for our sincere cooperation."

Larry immediately sat up straight, took the paper, unfolded it, and began to read:

H.L. Hollister - 3000

—NR

E.B. Harrison—5000

—NR

F.W. Woodward – 2000

—NR

"What is this?"

"Rosstein said these were people who had pawned National Rope Company stock at various pawn shops in the Lower East Side over the past month. His people verified each shop. The 'NR' after the pawn amount is an abbreviation for National Rope."

Larry's eyes lit up.

He quickly scanned the list, his gaze settling on the last name: J.R. Dorsey—10000

—NR

"Ten thousand?" He looked up. "Dorsey pawned it for ten thousand, but the pawn ticket says four thousand."

"Rosstein said that Dorsey's ticket was pawned the day before yesterday. The others on the list had been pawned over the past month. The pawnshops gave them between three and eight thousand dollars, but the face value was always ten thousand. Rosstein said, 'You should know better than him what that means.'"

Larry definitely understood.

The fact that pawnshops are offering less and less money indicates that pawnshop owners' confidence in this stock is declining week by week. A month ago, a stock could be pawned for 8,000, but now it can only be pawned for 4,000.

This is not just Dorsey's problem.

This is a problem for the entire company.

Holding this "dirt," Larry couldn't help but smile. He glanced out the office window and said with a laugh, "—Jews, hmm—they really put their minds to it. Even as a gangster, they can be this serious."

Mr. K looked somewhat bewildered and asked, "Boss, what are you talking about?"

Larry looked at Mr. K with a faint smile on his face. "Old K, what kinds of gangs are there in New York these days? I mean, the large-scale ones."

"The Irish, us Italians, and those Eastern Europeans from the Rothschild gang!" Mr. K rattled off the names with ease.

"There might be Black people, Latinos, and Asians in the future—but if we stretch the timeline to a hundred years from now, which ethnic group do you think will be able to leave the gangs?" Larry looked at Mr. K as if he were having a casual conversation.

"—You mean these Eastern Europeans might break away from the gangster business on the streets of New York?" Mr. K instantly understood Larry's meaning.

Larry maintained a smile, but remained noncommittal. After a few seconds, he sighed, "The Rothschild gang thrives in New York with two skills: assassination and brains. Even someone like your son might not be able to win against these brain-teasing people."

Mr. K looked bewildered, thinking to himself, "How did this bring up my son again?"

"Boss, you mean—the Rostan Gang is worth your careful recruitment? Then I will definitely pay close attention to their intelligence, try my best to help you figure out their background, and then absorb them."

Larry nodded, pulled out a wad of cash from the pile Mr. K had brought back, and said, "Here's ten thousand dollars. Give it to Abel Rothstein personally. Tell him I like the way he does things. From now on, he'll be in charge of Livingston Bank's informal due diligence in New York."

Mr. K took the money, but did not leave immediately.

"Boss—" He hesitated for a moment, "Are you so sure? What if you're wrong? Besides, he wants a round number, $1000, and you're just giving him ten times that? That doesn't seem right—"

“Others might not be suitable, but he’ll understand. You get what you pay for, and besides—” Larry pointed to the “incriminating material” Abel Rothstein had brought, “—he’s already started working for me.”

Mr. K nodded, then after a couple of seconds asked, "So—do you think the Rothschild gang will eventually break away from the street gangs of New York?"

Larry nodded solemnly. "They play mind games—a group like that will rise to power sooner or later."

"I don't believe it!" Mr. K grinned exaggeratedly. "I think we Italians are more likely to break away from the gangs. After all, we have brains and are loyal!"

Larry chuckled, then pulled out a stack of $10,000 and a stack of $5000 from his pile of dollars and handed them to Mr. K.

"You're right—Mr. K. Take this money!"

"Boss, that's not what I meant. I was just stating the truth about Italians." Mr. K held the 1.5

He said, making a big fuss about the $10,000 sum.

"It's not just for you—" Larry laughed and pressed the dollars into his pocket, "You also have the convenience store location, and..."

"We need to get busy with appeasing the gangsters—use this money to get things done, and if it's not enough, we'll talk about it again!"

Mr. K then "reluctantly" put the dollars in his pocket, before asking curiously, "—You mean, if the Rothschild gang really stops being on the streets, where will they go?"

Larry gave a meaningful smile. "Old K, you know I studied Chinese at Yale—there's a Chinese saying, 'He who steals a hook is punished, he who steals a country becomes a prince!'" He saw Mr. K's worried expression, as if he was about to be instructed on something.

Larry chuckled and waved his hand. "—Go and appease them. They're not stupid, but they can't turn the tables on me!"

At six o'clock in the evening, Baruch from Reading Company personally delivered a large envelope.

"Here is all the information you requested!" Baruch said, sitting down on the sofa.

Larry opened the envelope and poured the documents inside onto the table. The documents covered almost everything Reading could possibly have.

Transaction records, short position balances, block trade lists, shareholder register summaries—almost everything about the National Rope Company. Baruch was always meticulous in his work.

Larry picked up the shareholder register first.

The total share capital of the National Rope Company is 250,000 shares, including 50,000 preferred shares and 200,000 common shares.

On the list of preferred stockholders, he saw several familiar names—all New York banks and trust companies.

The stocks held by these institutions are like dead chips pledged in a safe; they won't be touched easily.

The list of common stock holders is much longer, with a large portion consisting of retail investors holding hundreds, dozens, or even just a few shares.

These days, company shareholder lists are very detailed. Every weekend after the NYSE closes its liquidation, the company shareholder register is updated accordingly.

But Larry's attention was drawn to one number: insider shareholding.

The board members, senior executives, and core employees of the National Rope Company collectively hold 34,000 common shares and 12,000 preferred shares.

Following the name of John R. Dorsey, the Deputy Chief Financial Officer, was written: 800 common shares and 100 preferred shares.

Eight hundred common shares, with a market price of over ninety dollars, are worth over seventy thousand dollars. One hundred preferred shares, with a par value of ten thousand dollars, are also worth over nine thousand dollars on the market.

Dorsey's stock holdings are worth at least $8.

This person, because of a gambling debt of two thousand yuan, mistook a preferred stock with a face value of ten thousand yuan for four thousand yuan.

Larry put down the file, closed his eyes, and drew a picture in his mind.

With a total share capital of 250,000 shares, after deducting institutional holdings and long-term retail investors, approximately 100,000 shares are actually circulating in the market.

One hundred thousand shares!

If he wants to short sell—not the naked short selling like this afternoon, but a genuine short selling that isn't afraid of being manipulated by company insiders—he will definitely need to borrow enough leverage.

If he wanted to dump shares, he would need to unleash an overwhelming amount of selling power. And all of this depends on one variable: when the insiders start to sell.

This afternoon, Larry dumped 11,000 shares in the stock market. It was clear from this process that the market's ability to absorb the selling pressure was very weak. This is naturally due to the inherent problems of highly controlled stocks, such as sluggish stock performance and insufficient liquidity. It also illustrates another problem: the stock does not have strong support and the market is not optimistic about it.

However, the subsequent rebound in stock price also indicates that the major players are still supporting the stock market—they raise the stock price after each drop to prevent it from falling further. This is reflected on the trading chart as sharp drops, gradual rises, and low trading volume.

This is a common trick used by the company's management to prop up the market. Larry deliberately closed his position at $95 at the end of the trading day to verify whether the major shareholders were placing orders at the end of the day to "support" the price and keep it as high as possible.

The results speak for themselves: the market maker really did keep the stock price at $95.5!

This is a big player! And a cunning one at that. They can't just stand by and watch someone dump their shares before all the company's insiders have sold off.

Larry's caution wasn't due to the impending deadline for National Ropes on Monday, but rather because the company's management might distort the facts or even lie, initiating a market "short squeeze" before taking advantage of the situation to short the market, similar to how he dealt with the short sellers in the stock and futures markets that had previously stood in his way.

Larry has no intention of letting others use his own methods against him.

He reopened his eyes, picked up the pawnshop list, and looked at each shop one by one.

H.L. Hollister—this name appeared on the shareholder register, holding 500 shares; he was not an executive, but a minority shareholder.

E.B. Harrison – not listed on the shareholder register, possibly held by a nominee or a family member.

F.W. Woodward didn't have it either.

Of the fifteen people, twelve are not on the shareholder register. What does this indicate?

This means that the insiders didn't directly take the positions themselves—they appointed relatives, friends, or trusted people. This way, even if an investigation were launched, they wouldn't be traced back to them.

Dorsey went by himself. That's because he was so desperate from losing that he didn't have time to find someone else.

Larry stood up, walked to the window, and opened it.

The April evening breeze carried the smells of horse manure and coal smoke, but at this moment it smelled like money.

Larry has spotted the target, but he still needs to consider how to fire.

"Mr. Baruch—please lend me your office tonight. I'd like to think things over a bit more," Larry said, turning to Baruch.