Reinventing the Millennium

Fang Zhuo has dealt with Goldman Sachs a lot and is very familiar with its temperament.

In other words, the styles of large institutions such as Bridgewater Associates and Deutsche Bank are not much different, but Goldman Sachs is always more prominent.

Paulson has weight, can make decisions, and they have common interests. Fang Zhuo can communicate with him more smoothly and initially reach an agreement.

But it doesn't mean that we can reach an agreement with these people in the conference room - especially at this moment.

In the two days after returning to China, Xu Kaiwei, Paulson, representatives of small and medium-sized institutions, and even Zheng Ge's human relations who were blocked from returning, everything that needs to be said has been said. Now Carlyle, Bridgewater, Dexi, and Yingshiman continue to say it. The reasons are nothing new.

It's nothing more than sweet words, sweet words and swords, coercion and inducement, and both soft and hard tactics.

These four companies also quite suspected that Mr. Fang had completed some kind of transaction with Goldman Sachs, but there was no evidence now, so they could only keep it in mind and not mention it for the time being.

"Mr. Fang, I can confirm that the SEC has received a large number of reports against Yike, you, and the MIGA Fund."

"Once the SEC decides to investigate, all you can get is an unprecedented heavy fine."

"Even the person in charge of your fund may not still be outside."

Carlyle's director Ian had various thoughts flashing in his mind. His face was solemn and his voice was unhurried. He emphasized the legal risks faced by Yike.

Fang Zhuo listens more and talks less when communicating with these VIP clients, but here he responded: "That's called MIGA Fund, not Fang Zhuo Fund."

MIGA Fund is no longer what it was originally. It attaches great importance to the protection of customer information. From the current legal perspective, it can be said to be a concerted actor of Fang Zhuo. It is difficult to say that it belongs to Fang Zhuo.

Ian paused for a few seconds and then changed the topic: "There are many political clients in this fund, right? The SEC should also investigate this fund."

Fang Zhuo smiled naturally and said: "Isn't this normal? Welcome to investigate. Can I still be afraid of SEC investigation while sitting here?"

Be aboveboard and don't be afraid to do anything.

Seeing this unthinking reaction, Ian felt a little uncertain for a moment.

He couldn't help but miss New York. If he were in New York...

Ian saw the bandage on Philip's head across from him again. If this were in New York, would Goldman Sachs be able to tolerate this?

"Mr. Fang." Ian shook his head and said solemnly, "I think you still need time to think, so you can think about it for two more days."

There are less than two days until the Nasdaq opens.

What this means...

Fang Zhuo glanced at the representatives of the five institutions present and said, "Okay, let's meet on Monday when the market opens."

Ian said seriously: "Yike's stock won't open on Monday. Mr. Fang, you have time to think more about it."

"Can't open the market?" Fang Zhuo asked with a smile, "Who said that?"

Ian folded the documents and said affirmatively: "The Carlyle Group said so."

Without waiting for Fang Zhuo's response, Henry, the vice president of Bridgewater Associates, immediately said: "This is also what Bridgewater meant."

Grant, the director of Dexi Group, said solemnly: "Dexi also thinks that Yike's stock will not be seen on Monday."

Ackerman, the director of Man Group, nodded slightly and said succinctly: "Man."

The four organizations made a joint statement, and the atmosphere in the conference room suddenly became solemn.

This is indeed Chinatown, it is indeed Hang Lung 23, and it is indeed the institutions that came here on their own initiative, but Yike is still a Nasdaq-listed stock.

No matter which family is speaking, the political resources are very deep, let alone all four families together.

Fang Zhuo narrowed his eyes.

At this time, Philip of Goldman Sachs slowed down a beat and said, "Yes, this is what Goldman Sachs meant."

The solemn atmosphere suddenly became a little strange.

Goldman Sachs, just hold your tongue.

Don’t you know what you are like?

Is 4+1 greater than, equal to, or less than 5?

What was discussed on the phone call before the negotiation meeting?

The four institutions all glanced at Goldman Sachs Philip.

When Fang Zhuo saw this, he didn't need to say anything more and said directly: "See you on Monday."

Talk has broken down. See you on Monday.

Fang Zhuo left the conference room directly.

Five institutions, you look at me, I look at you.

This result is also expected, but it is still somewhat tricky.

Ian asked Philip: "Did Goldman Sachs run away first?"

Philip touched the bandage on his forehead and said with a cold face: "How is it possible? We have contacted the SEC's Municipal Supervision Department. Yi Ke definitely violated the "1933 Securities Act". We will kill Fang Zhuo's spirit on Monday, and then It’s easy to talk about.”

The "Securities Act of 1933" is known as the truth law in securities. One of its focuses is the disclosure of financial and important information of listed companies.

Ian and Henry from Bridgewater exchanged worried looks. Failure to unite and exert pressure at this time can easily lead to problems. Goldman Sachs was not only the sponsor of Yike's listing, but also invested in important companies under Fang Zhuo.

It’s hard not to think of this relationship as a backroom deal.

Institutions that are good at behind-the-scenes transactions are also afraid of the behind-the-scenes.

"It's best this way." Ian stood up and warned, "The New York Times has obtained the testimony of the Copper Fund that Goldman Sachs requested to seal, and the SEC is watching you."

The Copper Fund still does illegal things to make money, and it sued Goldman Sachs for breach of contract and illegality.

However, Goldman Sachs denied the accusations and asked the judge hearing the case to seal all documents on the grounds that if they were made public, relevant trade secrets would be leaked.

Four well-known media outlets, including the New York Times, have paid attention to this situation and have applied to the court to request the disclosure of these documents.

The impact on public opinion caused by the financial crisis last year cannot be underestimated, and many of Goldman Sachs' businesses have been restrained.

Philip said categorically: "We must stand together. Even if Goldman Sachs wants to reach an agreement with Yike, it will only be after Monday."

Don't worry, even if it were to be sold, it wouldn't be at this moment.

Ackerman, director of Man Group, nodded and believed that Goldman Sachs made a wise choice. As long as everyone puts pressure together, the SEC and Nasdaq will take action, and the negotiations after Monday can significantly reduce the difficulty.

Ian stopped talking and subconsciously reached out to touch his phone but found nothing.

He picked up the document and was the first to walk out of the conference room, cursing.

Dexi and Yingshiman also left one after another.

Henry from Bridgewater Associates looked at Philip and asked, "Why don't you leave?"

Phillip pointed to his head: "Headache."

Henry said with concern: "I'll have someone take you to the hospital for another look."

Phillip didn't wait for a text message or a phone call from Emperor Paulson, and he was really not sure whether something had happened.

Although I was sure that Goldman Sachs would not run away at this time before I came here, but...who knows.

Phillip took a breath and asked, "Is there no more blood on the bandage?"

Henry looked carefully, and there seemed to be a little more.

He decided to personally accompany the Goldman Sachs vice president to the hospital to show his concern for his colleague in a foreign country.

…

Talk is broken!

Five major institutions joined forces to negotiate such a result.

This undoubtedly made the representatives of small and medium-sized institutions waiting in the Yike Lounge particularly disappointed.

But this also means that Yike will inevitably face a counterattack from large institutions, which does not seem to be the worst case scenario.

Ian, a director from the Carlyle Group, personally stated that Yike's violations will inevitably be investigated by the SEC and the stock will not be able to open on Monday. This matter will eventually be properly resolved.

At the same time, he also tactfully urged the institutional representatives present that the United States should increase its efforts, but since it came to China, it must also abide by the rules here. After all, it was the big guys who shorted Yike in the first place.

It’s time to apologize!

The big organization helps you mediate, and you also have to help the big organization to make Mr. Fang feel relieved!

Even if the market does not open on Monday, this matter may still need to be resolved through negotiations.

Ian left Hang Lung 23 after giving such an attitude. Subsequently, the other four institutions also successively gave similar attitudes.

All the five major organizations have left. The small and medium-sized organizations can neither see Mr. Fang in the President's Office nor get more information from the large organizations. They can only continue to linger in the Yike Lounge, waiting for further news.

The talks on the Chinese side collapsed, and public opinion in the United States, which had been floating for a day and night, immediately showed a more substantive reaction.

——Goldman Sachs warns: A sharp rebound in Yike stock may damage hedge funds’ trading systems!

——Bridgewater Fund: Yike Company violated multiple securities regulations and will be severely investigated!

——Nasdaq: The review process for YIKE stock has been initiated!

——SEC: Receive a report against Yike Company or quickly launch relevant investigation.

On his way home from get off work at night, Fang Zhuo received a call from the Nasdaq Exchange, requiring Yike to submit a more detailed description and operational disclosure tomorrow.

Fang Zhuo naturally handed over this job to Kong Yu.

In addition to this step-by-step notice, Nasdaq also mentioned that Robert, the CEO of the exchange, was about to take a flight to Shanghai, hoping that the Yike incident could be resolved smoothly.

Fang Zhuo expressed a polite welcome.

When he returned home, he received a call from the U.S. Securities and Exchange Commission, requesting him to go to the United States as soon as possible to help explain the company's situation.

"I will receive Robert from the exchange tomorrow, and institutions such as Goldman Sachs and Bridgewater also need to deal with it tomorrow. All the information the SEC wants to know can be obtained from Yu Hong, President of Yike America, Kong Yu, President of MIGA Fund, and the legal team. Know."

"I will fly to Washington as soon as possible after I finish handling the matter here in Shanghai."

The headquarters of the Securities and Exchange Commission is in Washington.

The person on the phone was BOSS Blanton from the SEC City Prosecution Department. He asked to define the time: "When does this 'as soon as possible' mean?"

Fang Zhuo replied: "I'm going to the United States next week."

Brandon got a reluctant answer, but still warned: "If we cannot get the information immediately, it is likely to launch a formal investigation into Yike."

The call is over.

Su Wei, who was listening to the voiceover next to her, asked: "Are you flying to the United States next week? Is it safe there now?"

"I will definitely not be able to go there next week, and the company's press conference will also be changed to an online press conference." Fang Zhuo mused, "The more I am here, there will be nothing to do there. Let's wait for the SEC to come out with the results. "

He also talked about today's negotiations and the call with Paulson of Goldman Sachs.

"What price will Goldman Sachs pay for this 0.5%?" Su Wei asked.

"It depends on how high the stock price can rise. This 2% is safe money, and it is legal." Fang Zhuo said thoughtfully, "This 2% is not enough to fill the space for runs. It just allows Goldman Sachs to operate. Regardless of the reduction of MIGA fund holdings or the delivery of options, profits are still made.”

The MIGA fund is stuck on the reduction line and does not need to disclose information. This will be a huge amount of money, and a large part of it will be buying money.

The 2% reduction in holdings by Fangzhuo's major shareholder is for ordinary money.

What Yike now faces is not only the fierce pursuit of Nokia, but also the eyeing eyes of giants such as Microsoft. The fact that the former's blade is stuck to its throat does not mean that the latter's gun has no bullets.

All things need to be resolved, and this time it is time to open up some space for Yike to continue to develop.

Fang Zhuo talked about this idea and then said: "Several American companies, including Microsoft, will only mutually authorize Yike this time. Google and Android companies will not be involved, and the Pro Alliance will not be involved."

This time it was Yike that solved some of the problems, not the Android camp.

Fang Zhuo doesn't think he should help Samsung and wait for his opponent to get the authorization before continuing to poke a knife in the back.

"Well, Goldman Sachs bought the stock at a high price this time." Su Wei quickly thought of another closely related thing, "It won't be a short position next time..."

Yike's short squeeze has disturbed everyone's attention, but the ITC's final ruling is still pending.

Wait until the dust settles this time...

Fang Zhuo sighed: "I was thinking about this on the way back. I hope Goldman Sachs won't be so bad."

Don't be bad. If you are bad, you will probably spit it out again after you eat it.

Su Wei's expression became subtle.

Fang Zhuo sighed for Goldman Sachs again: "If this is really the case, then Goldman Sachs can't blame me next time."

The initiative next time is completely out of Yike's hands.

This time, everyone did good deeds and delivered the stocks to you through large transactions. If you insist on continuing to short-sell maliciously, who can you blame?

…

China time, Sunday morning.

After Fang Zhuo woke up, he didn't rush to the company. He turned on the TV, ate breakfast, and thought about whether he had made any mistakes this time.

Coincidentally, the TV was CCTV's financial channel, which was also talking about the Yike incident.

Observer Tao Ye talked about the latest news from the United States.

"The SEC is closely discussing the treatment of Yike Company. This is a very dangerous signal."

"It is said that some operations from Yike-related agencies last year have been traced."

"Now Yike Company has disclosed their disposable equity, but before that, they used a very complicated transaction method for better concealment purposes."

"In November last year, this fund called DC made an option portfolio on Yike Company. The total delta was roughly 0.55. Calculated based on the contract at that time, the total net exposure was US$360 million."

“This means that if the DC fund associated with Yike chooses not to hedge its Delta exposure, then the market maker trading with it will directly sell options worth US$360 million in the market to cover the market maker’s own exposure. Hedge your mouth."

"Therefore, in order to avoid a direct impact on the market to a certain extent, in addition to this transaction, DC also purchased another options contract as part of the transaction, and the delta of this contract was very close to 1."

“The delta of this transaction coincides with the delta of the short call option + put spread option combination previously traded, which is why we can speculate that it is actually a delta hedging transaction of Yike Company.”

"This is called supply delta in the jargon, which means that Yike's affiliated funds provided delta in this option transaction, and there is no need to go elsewhere for delta hedging."

"But whether such a complex operation complies with the relevant regulations of the SEC, I'm afraid it still needs detailed review and discussion, which is also one of the risks that Yike is currently facing."

Observer Tao Ye shared some of the operations of Kong Yu, the head of MIGA, and sighed euphemistically based on the news he received.

“It’s really an institution versus an institution.”

"There is a fierce game of interests behind it."

"It's also a..."

Tao Ye looked a little strange: "A bloody fight."

I heard that there was bloodshed in Hang Lung 23 yesterday.

I heard that there were seated tickets, standing tickets, hanging tickets, and bounced tickets at Hang Lung 23 yesterday.

I heard that the head of Yike has flown to New York urgently.

I heard... too much news is flying all over the sky.

Amidst the chaos, big news finally came - the SEC launched an investigation into Yike Company!

informal!

At five o'clock on Sunday afternoon, US time, the SEC launched an informal investigation into Yike Company.

Media bombshell.

Carlyles:…

At this time, Ian suddenly realized that he could not contact Fang Zhuo.

Youyou Shencheng, in the vast expanse of China, he is not in the company and cannot be contacted by phone. How can we find him...