America's No. 1 financial conglomerate

Chapter 563 Strategy

Leave professional matters to professionals. As for the short selling of Leap Games from Wall Street, Ryan Ruiz can simply deal with it normally, using it to lull the enemy into a false sense of security.

The real backup plan was with Ernst Asset Management.

He wasn't a cat cowering in a corner, trembling with fear in the face of the tiger of Wall Street. He was going to fight back, to tear a piece of flesh from the tiger's body.

Ernst Asset Management, Queens, New York.

Ernst returned just a few days after he left.

This is a new department established this year by Ernst Asset Management Group.

Primarily responsible for fixed income and commodities, and foreign exchange arbitrage, it is part of the global business segment in the future structural plan that Jane Fraser gave to Ernst Asset Management.

However, the department's business scale is not yet that large, so it is temporarily under the overall management of the asset management department.

It was just past 6 a.m., and the small meeting room dedicated to the asset management department was already packed with people. All the core members of the department were present, and each person's desk was neatly arranged with documents, data reports, and portable calculators.

At the head of the conference table, Ernst looked somewhat tired. He had come from Silicon Valley the night before, arriving in New York at four o'clock and coming straight here without getting much rest.

Sitting to his left and right were Perkin Houston, head of the asset management department, and Axel Berger, department head. Axel Berger had just joined Ernst Asset Management this year, having previously worked at Deutsche Bank, a top European investment bank, and was particularly skilled in designing cross-market arbitrage and risk hedging strategies.

It's quite an honor for him to come to Ernst Asset Management now.

This is mainly thanks to Jane Fraser's husband, Kane, whom he met while working in Europe and they have been friends for almost ten years.

At the beginning of the year, Jane Fraser was looking at headhunter materials at home when Kane happened to see them, which led to this recommendation.

Jane Fraser thought Kane was joking. Why would he give up his position as the second-in-command at Deutsche Bank to become the head of a newly established department at Ernst Asset Management? Was he crazy?

The truth is, Axel really went mad.

However, it wasn't because of career, but because of love.

His wife, whom he had married less than two years ago, is a German model who, during the peak of her career, wanted to move to the United States.

Then he went crazy for love.

After glancing at the impassive Ernst, Pervin Houston broke the silence first, gently pushing a research report in front of him and saying, "This report is an equity structure report that I came up with last night after communicating with Ryan Ruiz, the CEO of Leap Games, and combined with publicly available market data."

"According to our preliminary calculations, institutional shareholders hold approximately 60% of the entire YueDong Games company, with a total of about 2900 million shares in circulation, accounting for 19.4% of the company's total share capital."

After saying that, he looked at Ernst, his tone tinged with curiosity, "I'd like to know how many shares you can influence." According to the announcement released by YueDong Games when it went public, Ernst personally owned only 16% of the company's shares.

After going public and raising funds, Ernst raised another 10 million shares two months ago. Now, Ernst holds less than 13% of the shares in YueDong Games.

But Perkin Houston knew that was impossible.

Ernst was hiding his wealth; for example, he knew that Wind Capital, under the Garfield family office, held approximately 6.5% of the shares in Leap Games.

Although nominally there are two shareholders, he knows very well that these shares actually belong to Ernst personally.

Moreover, he believes that this is not the only institution involved. Many of the institutional shareholders in YueDong Games' equity structure, whose registered locations are scattered in offshore financial centers such as the Cayman Islands and Bermuda, must have secret capital connections with Ernst.

So he asked how many shares Ernst could influence, which is crucial for how the asset management department should formulate its strategy and how to counterattack.

Facing the probing gazes of the crowd, Ernst first smiled slightly, then leaned back in his comfortable leather seat and casually uttered a number that shocked everyone: "40% should be around, right?"

"40%?" Axel Berg exclaimed instinctively, his eyes filled with undisguised shock.

This manager, who only joined Ernst Asset Management this year, was genuinely shocked by the number.

He recalled the information he had read about YueDong Games last night. Before going public, YueDong Games first diluted 20% of its equity through its first round of financing, and Ernst then transferred 10% of the equity to the Boston Consortium.

Shortly before the IPO, he cashed out another 10% of his shares, which were then taken over by Wall Street firms. After the IPO, two additional share offerings raised 3000 million new shares, further diluting the shareholding of existing shareholders.

All of these factors combined account for roughly half of YueDong Games' current share capital.

In other words, apart from the shares in the employee option pool, almost all the remaining equity is now in Ernst's hands.

Axel Berger was not shocked by the shares Ernst held, but by Ernst's wealth.

Based on the current stock price of Leap Games, his shares are worth more than $170 billion.

Just how much wealth is this boss hiding?

However, his eyes lit up and his body became excited, feeling his blood boiling.

The fact that Ernst controls so many shares in Leap Games means there's a lot of room for maneuver involved.

Not only did he think of this, but everyone in the room thought of it.

Perkin Houston even started doing calculations on paper, and many others did the same.

When he put down his pen and looked up, he met Axel Berger's gaze.

The two men chuckled simultaneously, then spoke in unison, "The Harlem Railroad Short Squeeze Case." Ernst, somewhat curious, turned to Perkin Houston. "What kind of incident is that?"

Seeing Ernst's interest, Pervin Houston continued, "In the 1860s, the New York-Harlem Railroad Company, controlled by Vanderbilt, obtained the right to operate the railroad along Broadway from the New York City Council."

"As soon as this major positive news was announced, Harlem Railway's stock price soared from $50 to $116 per share."

"However, Wall Street short sellers at the time generally believed that the stock price had exceeded the volatility brought about by the positive news, and that the stock price would inevitably fall back. So they all increased their short selling and tried to profit from it."

"But before the stock price could even correct itself, the New York City Council suddenly announced the cancellation of the previously granted railroad operating rights, which directly caused Harlem Railroad's stock price to plummet to $72."

"Short-selling institutions were overjoyed, believing that the stock price would continue to fall, and thus further expanded their short-selling."

"But what they never expected was that Vanderbilt, together with his friends, massively bought up the already limited number of outstanding shares, ultimately locking up all outstanding shares."

"The short sellers were unable to borrow securities for settlement upon expiration and had to ask Vanderbilt to repurchase them at a high price. In the end, after much persuasion, Vanderbilt agreed to help the short sellers close their positions at a price of $106."

"You mean, we can use this method to deal with Wall Street?" Ernst found it interesting.

His original idea was to use funds to drive up the stock price, forcing Wall Street to sell at a loss on the liquidation date.

Anyway, YueDong Games doesn't have many outstanding shares, only a few billion dollars. They could easily do this by continuously pledging and cashing out. But now, it seems there's another option, one that's even more difficult for Wall Street to accept.