Reinventing the Millennium

The dismal fate of many hedge funds on May 26 made people in the industry feel sad, but they could not help but feel happy secretly.

Short selling is very simple, the disadvantages are obvious, and the benefits are very attractive, but the struggle with off-site factors is also extremely terrifying.

Although Yike's short squeeze in April was successfully opened under pressure, the dominant factor was the short run caused by locked options, and the final outcome also ended in peace talks with large institutions.

However, there are too many things that are shocking about this wave in May. All large institutions that did not take advantage of the previous round were completely wiped out in this round.

In addition to the calculations, collusion, and wrestling shown in the desperate comeback on Monday morning, using the Internet to coerce retail investors into a populist group short squeeze is simply... it is simply opening Pandora's box!

You must know that the short squeeze market last week completely ignored the most basic values. At that time, YIKE was a standard bearer. Under normal circumstances, it would inevitably fall. However, YIKE bucked the trend and rose, and finally completed the destined to be loaded. A textbook short squeeze.

It is not often that a White House overturns the ITC's ruling, but will Internet-based retail investor groups become a nightmare in the new era? After all, the conditions for re-enactment of the latter are far less stringent than the former, which makes many institutions unable to help but worry.

As for the man behind all this, there is no need to go into details about his evil deeds of igniting the institution with cruelty and brutality.

Before Monday's intraday trading ended, Yike Fangzhuo's information was on the desks of many institutions, and his dark history and success methods were also widely disseminated.

There was only a wrong name, not a wrong bandit number.

This is indeed a "hunter" worthy of the name!

There is lingering fear in the financial circle, but public media platforms such as Twitter and Facebook are elated.

All the bad news on this day was automatically ignored, and all the good news was automatically amplified. The announcement of each institution's departure caused waves of uproar among retail investors.

The effect of holding a group to squeeze short is great!

Sure enough, everyone is the king of retail investors!

Of course, the year-round institutional harvest and the lingering bad breath after the financial crisis have caused many people to focus on other stocks.

Is there only one stock like Yike on the market?

Even, there is still no need to consider the pros and cons, as long as you join a group and rush in without thinking, you can increase the stock price!

There are such voices on Freetrade, Go die and Twitter, either out of indignation or interests, and want to continue this Yike-style performance.

However, more voices were still celebrating, and they still expressed the evil in their hearts.

"It's great. I bought 1,000 US dollars this time. It doesn't matter whether I pay for it or not. Seeing Goldman Sachs doing this is so worth it!"

“Institutions are finally paying the price for their greed!”

"Which company jumped from the Empire State Building this afternoon? Tsk tsk."

"I bought a 'King of Retail Investors' T-shirt and will wear it to go shopping on Wall Street tomorrow."

"Smith, who sells T-shirts, has a new model! New Mr. Fang's quotes are printed on them! There is also a Chinese version!"

"I saw in the news today that Yike was suspended from trading. When was it suspended?"

"There are still institutions that are persisting, there are still institutions, there are still institutions!"

Amid the cheers, bankrupt manager Smith's T-shirts sold out of stock, and news of the hedge fund being liquidated and even being sued by clients spread everywhere. The Twitter followers of Fang Zhuo, the instigator, are still growing rapidly after exceeding 5 million.

The still-frenetic atmosphere makes some people deeply uneasy.

Mien, a senior investor, couldn't help but tweet: "The current discussions about Yike are extremely crazy and reckless. This abnormal situation must be curbed."

His voice and statements like this quickly attracted the attention of retail investors.

"What stocks have you invested in?"

"Which fund are you from? Paulson's? Are you shorting stocks too?"

“Check, check, find out which company Paulson’s short position was revealed to be!”

Compared with the impact of the previous round, this time it was far more irrational than in April. Some people even took screenshots of the speeches and spread them around.

Soon, the Mien had to delete their comments and completely silence themselves, so as not to cause unexpected trouble and force themselves or their colleagues to go to the rooftop.

But this has brought new inspiration to retail investors. Although large institutions such as Goldman Sachs and Bridgewater have liquidated Yike’s short positions, they still have major short positions in funds that have to be disclosed in accordance with regulations!

A group of people gathered together, trying to extend the flames that were holding the group into the air to a wider area.

On May 26, Chicago, at 8:30 in the evening, Citadel's shredder was working frantically, destroying stacks of documents.

As a well-developed "electronic securities market maker", such a scene is not common.

Amidst the sound of the shredder working, Deputy Director Alex took out more documents to be destroyed and browsed the content of Twitter on his mobile phone.

When he saw a well-known investor being forced to cancel his account, he had to sigh angrily: "What on earth are these people doing! These are simply thugs!"

"Get to work quickly. Don't leave any paper or electronic materials." Another executive didn't pay attention to Twitter and only focused on the work at hand.

Citadel's "market maker" business is to act as an intermediary in transactions. Through two-way quotations, when the buyer is the seller and the seller is the buyer, this time it cooperates with the mobile stock trading platform Freetrade for "order flow payment", using powerful computer capabilities Match trades and earn large profits with very low risk.

However, in addition to being a market maker, Citadel also has hedge funds under its umbrella. This time it also participated in the short selling of Yike, and then prioritized its own funds during the liquidation process today, and quietly replenished some losses from Freetrade.

He was a seller, a buyer, and a referee, but he was still blown away by the sudden and violent rise in the market.

Alex sighed, feeling that today's encounter was like encountering a black swan that suddenly flew up.

He stuffed the documents in his hand into the shredder, and suddenly heard a banging sound on the door.

"Open the door, open the door! FBI! Open the door!!"

When Alex heard the sound, his hands shook and he quickly stuffed the documents into the shredder.

The shouts outside the door rang twice more, followed by the sound of banging on the door.

"Duang!! Duang!!!"

Alex and his colleagues rushed to process the documents in silence.

Two minutes later, as the door was knocked open, they both put down their documents and raised their hands to indicate that they were not in danger.

A group of people poured into the office and showed their IDs. They were from the FBI and SEC. It was a joint law enforcement.

While going through the procedures, fixing the evidence, and at the same time asking Griffin, the boss of Citadel, to come forward.

Alex obediently complied with the request. After calling him, he said in embarrassment: "I can't contact the boss. Many of his usual affairs are handled by private lawyers."

John, the head of the SEC who was responsible for this "no one can run away" task, saw that the executive was so cooperative and asked pleasantly: "Put his affairs aside for now. We just came here to inquire about some dark pool transactions and financial derivatives." A matter of quality.”

Alex suddenly closed his mouth and simply gave his final attitude: "I want to wait for the lawyer."

John was a little regretful of this change of attitude, but not too surprised.

He signaled his colleagues to continue fixing and recovering material evidence, and made two more phone calls to inquire about the status of two other operations in Chicago.

The task of this trip is actually not difficult. 60% of the Yike stock trading volume from Freetrade is completed in the dark pool market, rather than directly on the Nasdaq exchange.

Since dark pool trading has the word "black" in it, there is naturally a lack of supervision. Some funds that were supposed to be delivered to Freetrade were delayed, and some derivatives around YIKE options were liquidated today. Several institutions are planning to run away.

These funds that are intended to be hacked need to be carefully squeezed out.

Compared with the stocks sold by MIGA funds on rallies, these funds in the dark are a very important part.

John doesn’t know the specific size of this part of the money, but judging from the materials seized from Citadel, since last week, it has been paying millions of buy and sell orders to Freetrade every day, and the amount of funds is astonishing.

Stacks of materials were packed into boxes, and computers in the office were taken away.

After checking with his colleagues, John said goodbye to Citadel and rushed to the next target in the dark.

No one can escape, everyone must be squeezed!

…

The money collection operation was carried out in the United States. Because they were well prepared to overturn the ruling, customers were afraid that the institutions behind dark pools and fringe exchanges would escape, so they paid attention to their movements and resolutely safeguarded the safety of their funds.

This type of supervision is relatively weak, but behind it is often a bank or a large financial institution, which makes communication easier.

Whether it is giving money directly or going through procedures to pay for settlement, you must see the money.

It was night in the United States and morning in Shanghai. Fang Zhuo received calls from Lu Peining and Kong Yu in the office, focusing on the protection of gray assets.

In addition, the two sides of the ocean also exchanged views on the second trading day.

As far as the current situation is concerned, no institution can bear the pressure of such a surge in stock prices, and they have all retreated. However, platforms such as Twitter are still spreading the news that some institutions are persisting to the end, thinking of striking while the iron is hot to get more oil and water.

"Mr. Fang, Nasdaq just held an emergency meeting to discuss how to deal with the small probability situation that happened today." Kong Yu conveyed news from customers.

"Yes, I'm listening." Fang Zhuo held the phone and his eyes stayed on the "Quotes T-shirt" on the screen for a few seconds.

"The circuit breaker mechanism for individual stocks may be trial-operated to avoid excessively abnormal increases and decreases. In addition, the SEC has also issued a warning. Freetrade's review is still ongoing. If necessary, it may need to be closed for a period of time." Kong Yu said .

If YIKE stock achieves its goal, the SEC must move forward and seek justice.

Now the public opinion of retail investors has also attracted the attention of the SEC. If the war intensifies, Freetrade, as the main platform for retail investors to trade, may be forced to close.

Fang Zhuo thought for a moment: "The SEC will use Yike to implement a 'ban on naked short selling', and the Nasdaq exchange will also implement a 'circuit breaker' for individual stocks. It seems that everyone is taking this matter very seriously."

Kong Yu described the impact of this incident and said: "Mr. Fang, if you are walking on Wall Street now, I am afraid that no one from the hedge fund would dare to stand in front of you."

"Did they all jump off the rooftop, or were they aiming at me with a sight by the window?" Fang Zhuo asked.

Kong Yu thought for a while: "Half and half."

Fang Zhuo smiled and said: "Then I'd better finish my domestic work. When will you return to Shanghai?"

Kong Yu replied: "Almost next week."

He still has a lot of finishing work to do.

"Well, everything went well." Fang Zhuo estimated that the gasoline man would be fine. We are not doing a one-shot deal. If we really want to give a one-shot deal, then... it can only mean that the customers are not far-sighted enough.

Just as Kong Yu was about to hang up, he suddenly remembered another little thing: "Mr. Fang, Xiaobao is under investigation. Someone leaked Freetrade's customer transaction information."

He paused and then added: "The leaked information has mixed up the specific figures of stock transactions."

"King of Short Selling" Paulson was confirmed to have used Freetrade to go long on YIKE stock. His account operated **** stocks and made a profit of **** US dollars.

As for how much it is...

Anyway, as long as this situation is confirmed, there must be more serious situations under the water.

Fang Zhuo really couldn't bear it: "Xiaobao, Lu Peining and the others are going to expose the matter of him working with Goldman Sachs to engage in garbage CDOs again. We have a somewhat one-sided relationship with him, and objectively he is indeed Our harvest has had a positive effect, if not, you can take back his private jet at a reasonable price, and it will be more convenient for you to travel in the future."

Subjectively, Xiaobao is shorting Yike.

Objectively speaking, the reputation of "King of Short-selling" and "No. 1 hedge fund" has played a significant role in attracting traffic from the previous round to this one.

"No problem, I will pay attention to it. He will probably end up paying the settlement fee in the end." Kong Yu said the usual results of the settlement. Xiaobao still has money, and he can make money and eliminate disasters no matter what.

Fang Zhuo asked a few more questions about the gasoline man's safety, ended the call, and thought about naming the private plane "Xiaobaohao".

At 10:30 in the morning, assistants walked into the office and began to set up cameras to film the boss's response to the overthrow of the ITC.

Just after the White Room press conference, Nokia's Simons and Apple's Cook both expressed their attitudes towards the decision.

Simmons expressed strong dissatisfaction, claiming that "the ITC ruling correctly reflects that Nokia has been negotiating in good faith, while Apple and Yike are still unwilling to obtain patent licenses."

Cook briefly expressed his welcome and praised White House for supporting innovation.

Fang Zhuo originally wanted to respond on Twitter as soon as possible, but Twitter had not been restored at that time. Later, he became obsessed with following the battle situation. After sleeping, he felt that he would give a formal response in the way of the leader.

"Yike welcomes Baifang's support for the healthy development of the industry."

"The overturning of the ITC's ruling proves that everyone realizes that progress and innovation in the mobile phone industry should not be stifled, and Nokia's past patent-abusing mechanism is destined to be eliminated."

"Yike will actively contact relevant manufacturers on patent licensing."

"In any case, we thank you all for your continued support of Yike Mobile. I also believe that the first half of the smartphone competition is nearing an end."

The pace of the products of Nokia, Motorola and Sony Ericsson has been very sluggish. Consumers have gradually established their awareness of smartphones, and those that should be eliminated will be eliminated.

Fang Zhuo is very serious in the camera.

He took a look at his own image and was very satisfied with the result of the recording.

The video is posted via YouTube.

Fang Zhuo briefly browsed the web page and opened Quora, an American Zhihu, to see if there was any in-depth analysis of the short squeeze incident besides the irrational emotions on Twitter.

The incident was very popular, and there was an answer with a lot of likes.

——"Thank you Mr. Fang. This Yike short squeeze has made me a millionaire, but... I still miss the feeling of being a billionaire before."