America's No. 1 financial conglomerate

Chapter 591 Wall Street has taken the bait.

December 14, 1998, the last trading day of the week for the U.S. stock market.

The iconic bronze bull statue in front of the New York Stock Exchange still had morning dew clinging to its bronze surface, while a few blocks away in the Nasdaq trading floor, the huge electronic displays were already glowing a glaring red, announcing the start of another day of fierce competition.

In Ernst Asset Management's trading room, a huge wall of trading screens takes up the entire wall, with dozens of windows of varying sizes displaying real-time market data from major global markets.

Axel Berger stood with his hands behind his back in front of the central control panel, a calm surface concealing turbulent undercurrents.

His gaze was fixed on the largest window in the center of the screen wall, showing the real-time stock price chart of YueDong Games. From the moment the opening bell rang, it encountered a sudden and fierce selling pressure.

The stock price plummeted like a kite with a broken string, falling by 4.3% in just ten minutes, hitting a low of $214.5.

The red drop figures on the screen kept jumping, as if silently mocking investors who wanted to buy in.

Just when everyone thought an avalanche was about to happen, the stock price decline suddenly slowed down, as if it were being steadily supported by an invisible hand.

At the price level of $213.6, a series of large buy orders suddenly appeared, and the stock price curve gradually stabilized, even showing slight signs of recovery.

"Are these Middle Eastern tycoons insane?" Axel Berg's thin lips parted slightly, and he even uttered a few low curses.

He turned to look at the analyst Marcus next to the control panel on his left, who was staring intently at the fund flow data on the screen, his fingers flying across the keyboard.

How much of the circulating shares of YueDong Games have been absorbed by funds from the Middle East so far?

Marcus quickly pulled up the statistics and said in a deep voice, "According to our multi-dimensional capital monitoring system, as of now, net purchases from Middle Eastern funds have exceeded 700 million shares, accounting for 4.66% of YueDong Games' total share capital."

Axel's brow furrowed almost imperceptibly, and his fingertips unconsciously rubbed his chin.

He was both dissatisfied and somewhat helpless about the entry of these conglomerates holding huge amounts of petrodollars, which disrupted his original rhythm.

"What are Goldman Sachs and Citigroup doing?" Axel didn't dwell on the actions of Middle Eastern capital, but instead inquired about the reactions of the other two Wall Street giants.

"Judging from the trading data after the market opened, Goldman Sachs' earlier selling volume has decreased significantly, and Citigroup's selling volume has been halved."

Marcus shrugged, somewhat helplessly. "It seems that the mainstream institutions on Wall Street have entered a wait-and-see mode, with trading volume shrinking by about 40% compared to the same period yesterday."

"Wait and see?" Axel's lips curled into a cold smile. "These old guys really don't act until they see the benefits."

ah."

It's not time to close the net yet; he needs to lure in more funds from Wall Street.

"We're officially joining the dumping spree too." Axel's voice suddenly rose. "Before the market closes today, dump 500 million shares of Jump Games stock on me. I want its stock price curve to draw a vertical cliff!"

A flurry of rapid keyboard clicks filled the trading room as traders, upon receiving instructions, immediately sprang into action, inputting large sell orders into the trading system.

The selling pressure of 500 million shares is equivalent to 3.3% of YueDong Games' total share capital. Such a large-scale sell-off is enough to cause a huge uproar in the market.

That wasn't all. Axel's gaze swept over the other targets on the screen: "Short Cisco, IBM, and Oracle, with positions set at 30%, 25%, and 20% of the short position in YueDong Games, respectively."

"In addition, we are going long on EA, Nintendo, and Ubisoft, with a position allocation of 4:3:2."

The plunge in YueDong Games' stock price will not only affect Wall Street's decisions, but will also have a significant impact on hardware suppliers and software service providers.

Cisco is the provider of the gaming network solution, IBM provides the server clusters, and Oracle provides the database support.

If YueDong Games' stock price plummets, no company that has business with YueDong Games, such as Cisco, IBM, and Oracle, will be in trouble.

At the same time, this benefits other game developers.

The capital market has always followed a zero-sum logic: when YueDong Games falls into difficulties, it will inevitably push up the stock prices of other companies in the same industry.

If regulators confirm that YueDong Games has serious problems, then YueDong Games will only have one way out: to sell itself.

Whether it's splitting up and selling the core game IPs or being acquired as a whole, only these large, well-established game companies can take them over.

This potential acquisition expectation will undoubtedly be a strong driving force supporting the stock price increases of companies such as EA and Nintendo.

As Axel had predicted, Ernst Asset Management's concentrated sell-off quickly triggered a strong reaction in the stock market.

The stock price of YueDong Games, which had been stabilizing, plummeted again under the impact of huge sell orders.

From 9 a.m. to 11 a.m., in just two hours, the stock price plummeted from $213.9 to $206.3.

The US dollar fell below $200 in what seemed like an instant.

Just as the market was in chaos, NBC's midday financial news program suddenly inserted an urgent news flash, like pouring cold water into a boiling pot of oil.

According to insiders received by this station, YueDong Games was recently found to have significant issues during its financial audit.

The major irregularities involve multiple aspects, including revenue recognition and asset valuation, and regulatory authorities have already expressed their concern.

This insider revelation, which was completely unsubstantiated, was like a bombshell, instantly detonating the entire financial market.

The already plummeting stock price of YueDong Games fell another 2.2% within ten minutes of the news broadcast.

At that moment, in Ernst's office, Axel Berger was briefing him on the stock market situation.

"The plunge in YueDong Games' stock price has triggered a chain reaction. Most of the 13 upstream and downstream companies that have cooperative relationships with YueDong Games have seen their stock prices decline, with an average drop of 2.6%."

Meanwhile, the stock prices of competitors such as EA, Nintendo, and Ubisoft surged, with EA seeing the largest increase at 8.3%.

55

Ernst's face was ashen. He was shorting his own stock, creating an opportunity for the enemy. Nobody else could do that.

"What about the movement of Middle Eastern funds?"

"They are still accumulating shares, but the pace of buying has slowed significantly." Axel glanced at the trading data recorded in his notebook. "Given the current short position in YueDong Games, unless they continue to add to their positions regardless of cost, no one can stop YueDong Games from closing with a large bearish candlestick today."

Hold.

Ernst glanced at him, feeling a sense of arrogance in the man's words that made him uncomfortable.

"What about Wall Street's money?" He was more concerned about the effectiveness of the short selling.

"Short selling volume is increasing, but it still hasn't reached expectations." Axel Berger revealed a confident smile. "I've already called Ryan Ruiz. The climax of this drama is coming, and the second half is our performance time."

Ernst knew what the other person meant by "climax," and not only him, but half of America knew it too.

On the television screen, CNBS news anchor Valerie Cohen was wearing an alluring turtleneck sweater and black pencil skirt, which accentuated her beautiful figure.

This is a news channel on MGM Television Network, currently broadcasting exclusive news from Jump Games.

Ryan Ruiz stood in front of the television, his expression serious and resolute.

Behind him is the logo of YueDong Games, the blue lettering standing out prominently under the lights.

"Hello, investors and media friends." Ryan Ruiz's voice was broadcast across the United States via live stream.

"I would like to issue a formal clarification regarding the recent false rumors circulating in the market about YueDong Games and the abnormal fluctuations in its stock price."

"YueDong Games is currently operating normally, its financial data is accurate and compliant, and there are no undisclosed material risks. Rumors of financial irregularities and regulatory investigations are all false. The company has reported the matter to the relevant authorities and will pursue legal action."

The legal responsibility of those who spread rumors.

"In order to protect the interests of the majority of investors, the company's board of directors, after emergency consultation, decided to launch a stock repurchase program to stabilize the current abnormal stock price of YueDong Games."

What was originally good news was seen by Wall Street as a sign of helplessness.

On Wall Street, Paulson of Goldman Sachs had a gleam in his eyes when he heard the news.

"Is this our trump card?"

"According to stock exchange regulations, share buybacks can only account for a maximum of 10% of the total share capital. With so much short selling, can the buybacks be completed?"

He looked at his secretary and asked, "Have you found out who the major short sellers were today?"

"Among them, about 200 million shares came from the reduction of holdings by YueDong Games' overseas shareholding institutions. As for the others," the secretary shook his head, "we can't trace them yet."

"However, since some institutional shareholders are publicly reducing their holdings, I think other stocks will be no exception. They just don't want to reveal their identities, so they are doing it very discreetly."

The inability to find specific information is a problem.

However, Paulson didn't think it was a big problem.

Since it's an overseas holding institution, it's normal for them to secretly reduce their holdings to avoid being exposed.

The key is this opportunity; it's a golden opportunity that can't be missed. Someone is paving the way ahead, and Goldman Sachs has no reason not to follow suit.

How much ammunition do we have left?

The secretary glanced at the document in her hand. "Including the shares borrowed from the brokerage firm and our own, we have approximately 1100 million shares left."

Paulson decisively said, "Sell off 500 million shares today. I want YueDong Games to know that their buyback is completely ineffective."

Goldman Sachs' actions were like a starting gun.

With Goldman Sachs's aggressive moves, the market went completely crazy.

No one investigated the actual truth; they believed Goldman Sachs, and all the short-selling institutions rushed in.