Reinventing the Millennium

When the news of Bingxin's suspension of production was further confirmed, following Russell, the pioneer of short selling, many financial tycoons on Wall Street finally showed their interest in Yike.

It seems that this legendary company from the East has fallen into unprecedented weakness.

So...

Chanos, known as the "short master" on Wall Street, appeared on a program to discuss Yike's situation, claiming that "financial reports are the most important criterion for measuring a company's stock price", believing that "Yike's current stock price is still overvalued", and saying that "Knicks United Fund has joined the ranks of shorting Yike".

Chanos is the president and co-founder of Knicks United Fund. He once openly questioned the existence of financial fraud in Enron, which ranked seventh in Fortune magazine's "US 500", and successfully shorted it for profit.

The reason why he did not short Yike in the first place recently is that he was observing the situation of this famous "short killer" company, and secondly, he was shorting another well-known Chinese company Alibaba.

Although Yike's stock price has fallen a lot, Chanos has always believed that he would rather not get the biggest profit, but also pursue the right profit.

Now is the "right" moment for Yike. The decline of this company is inevitable, and its breaking point is also quite clear.

However, due to complex factors such as Yike's local market, the successful image of its founder, and many transactions of related companies, its stock price can maintain a relatively strong position.

Chanos believes that this relative firmness is unhealthy and will inevitably break.

And, because of the relevant regulations of Nasdaq, Yike's Q3 financial report must be announced before October 31, that is, its breaking time is then.

Yike's third quarter will inevitably be very bad, and it will inevitably become the last straw for the downward pressure on the stock price.

As for whether Yike will recover or continue to sink after this, it has nothing to do with the shorts, because the profits that should be grabbed have already entered their pockets, and the institutions have already successfully withdrawn.

The voice of "short master" Chanos and the emphasis on the importance of Yike's Q3 financial report made Russell and others overjoyed, and they all hoped that more forces would suppress Yike's stock price together.

As if it was an appointment or a tacit understanding, or perhaps they saw the irreparable weakness of Yike, and even Russell was surprised that industry insiders stood up.

Einhorn, the founder of Greenlight Capital, who once shorted Lehman, commented on Yike's current situation and believed that "an elephant can't dance without its limbs", and clearly stated that he participated in the shorting of Yike.

Ackman, the founder of Pershing Square, became famous for his short-selling battle with MBIA, an American municipal bond insurance company. In recent years, he has been fighting with Herbalife. Now he has also joined the camp of shorting Yike and expressed his own views-"Mr. Fang is respectable, but Yike has serious problems on both the supply and demand sides. No one should miss such an opportunity."

Steve Cohen, a hedge fund tycoon with the title of "Jordan", spoke on Twitter. On the one hand, he recognized the views of his peers, and on the other hand, he also mentioned a little festival in the past.

"YiKe should have been destroyed long ago. Its current size is the product of the collusion between power and money! Its performance in the secondary market back then was the result of shameful non-commercial factors!"

"YiKe is now in such a situation because of non-commercial factors. I can only say that it deserves it!"

"Fang Zhuo swallowed my money, and this time he must spit it all out!"

In fact, Steve Cohen's name did not appear on the list of short squeezes by YiKe a few years ago, but since he was so indignant and forbearing, he must have secretly participated in the short selling of YiKe.

In addition to these bigwigs who spoke publicly, there were also industry tycoons who simply called Fang Zhuo directly on media programs to inform him of their actions to short YiKe.

Ken Griffin founded Citadel Investments in 1990, and later made it one of the most successful hedge funds in the world. In 2007, it went public on the New York Stock Exchange, becoming the first hedge fund management company in the United States to conduct an IPO, and he himself became one of the top 100 richest people in the United States.

As of the latest information disclosed in 2016, Citadel's net asset management scale is 34.7 billion US dollars, and the regulatory assets reported to the SEC are 242.9 billion US dollars, with a leverage of 7 times.

It can be said that although others are already bigwigs, Griffin is still the most recent bigwig who can be called a bigwig, and he also has Fang Zhuo's private number.

"The success of Yike is undoubtedly incredible and extremely dazzling, but what I want to say is that no company can avoid setbacks."

"To this day, I still think that Mr. Fang has extremely good leadership skills and is one of the best business leaders in the world."

"But we must also admit that there will always be boundaries between a person and a company."

"I think Yike should not be restricted by the current political factors, but it has happened, and we cannot ignore the existence of this situation, so Citadel chose to join."

Griffin explained Citadel's reasons on the TV show. Of course, he did not mention that Citadel had a small move to eat both sides in the "market maker" business in the last Yike incident, and then suffered losses.

He then went on to talk about the other person's personal appreciation and called a private number in the address book.

Since the restrictions on Yike, Fang Zhuo rarely appeared and spoke in public. This scene undoubtedly made the TV station and the audience watching the show extremely excited.

The call to the private number was connected.

Griffin and Fang Zhuo knew each other, but he was introduced to the head of Yike by a friend in Washington. They were not particularly familiar with each other, just nodding acquaintances.

When he called, he did not have any extra explanation in the first sentence. He said in a relaxed tone: "Hi, Mr. Fang, I joined them. Citadel really can't talk about business without talking about business."

There was no immediate response from the other end of the phone, and after a silence that made everyone think, Fang Zhuo's calm voice came over.

"Gotcha, I see ya."

With just this sentence, the phone was hung up.

This is a slang expression - OK, I get it.

But "gotcha" not only means "got you", but also means "got you", and "I see ya" means "I see you", which means I see you/I noticed you/take care/goodbye.

- OK, I get it.

——I caught you, take care.

When Fang Zhuo's voice was heard on the show, a "Oh" sound was heard. It was a pity that he could not chat with him more.

However, Griffin held the phone, and Fang's calm voice seemed to still echo in his ears, but he suddenly felt a little chill in his heart. Was it this "gotcha" or that "gotcha" on the other side?

He managed his emotions, put away his phone, and completed the last part of the show.

Afterwards, Griffin once again asked the company to review the relevant information of Yike and Bingxin one by one to confirm whether there was any unexpected situation this time, and the final conclusion did not overturn the previous decision.

Knicks United Fund, Greenlight Capital, Pershing Square, Point72, Castle Investment...

When these world-famous hedge funds showed up, when Chanos, Einhorn, Ackman, Griffin, Steve Cohen and other crocodiles made their attitudes clear, their real money investment quickly produced results.

Yike's market value was further depressed to a new low of $240 billion. At the same time, the short positions announced by Nasdaq also rebounded rapidly after "The Wolf is Coming Again", breaking the record and reaching a high of $18.6 billion.

In just half a month, Yike not only became the world's number one, but also widened the gap with Alibaba, consolidating its position by surpassing the second place by $6.1 billion.

On the first day of September, Yike still held the line of $240 billion, but Alibaba's market value had risen to $244.9 billion, officially surpassing the company's market value.

This trend also caused a lot of shock.

September is the last month of the third quarter, but Yike's mobile phone products were almost completely exhausted in late August, proving the serious impact of Bingxin's suspension of production.

Although Bingxin must have worked at full capacity before to leave Yike with chip inventory, Yike faces the demand of two huge markets in Europe and China, and even if it manages shipments, it will be of no avail.

The financial market has suffered the largest short-selling in history, the mobile phone market is facing increasingly fierce competition due to shortages, and the company's stock price and market value have been surpassed by local competitors...

Even domestic media feel a lot of pressure when looking at this situation.

Because of the significance of Yike and Bingxin, the mainland's reports are more euphemistic and express little confidence, but Hong Kong is much more straightforward when explaining the current predicament of the Yike system.

"Yi Ke may suffer a sudden death."

"The Q3 financial report on October 31st is likely to determine the sharp fluctuations in Yi Ke's stock price."

"Although we hope it will be a positive and active signal, facts from all sides are constantly releasing similar conclusions. Yi Ke's third quarter performance is very bad."

"It is undoubtedly too demanding to ask Yi Ke to maintain good performance under multiple burdens and complex geopolitical interference, but the prediction of a rapid decline is also a deliberate pressure imposed by some institutions in order to grab profits."

"Yi Ke has a chance. Once its potential in China is fully realized, it will be enough to support the current market value and stock price."

"Sadly, the market often succumbs to the instigation of certain institutions."

"Yi Ke may really be seriously injured, but I believe it will gradually recover. I wish it and Mr. Fang good luck."

The tone of Hong Kong's "Economic Herald" is very regretful. Yi Ke has become a situation of being overkilled, which is beyond human power to save.

Coincidentally, on September 3, news from Taiwanese reporters once again added a negative to the Yi Ke system.

——Taiji has completed the risk trial production of the 10nm process and is expected to be put into production at the end of the year and achieve small-scale mass production in the first quarter of next year.

No matter what happens to Yike and Bingxin, the industry will inevitably continue to move forward.

Yike has not held an autumn press conference yet. Although its Mars 9, which is out of stock, is still competitive this year, next year will belong to 10nm. Bingxin has no production capacity for 16nm, let alone more advanced processes.

From November last year to September this year, Yike's market value was as high as US$420 billion. At the lowest, it had fallen below US$240 billion due to the news of Taiji's process, reaching a new historical low of US$236.8 billion, a drop of 43.6%.

Russell, the pioneer of RC Fund, posted a video of opening champagne on the emerging TikTok short video platform and gave his final evaluation.

"No, what are we waiting for a spectacular death? Isn't the halved stock price spectacular enough?"

"Yi Ke is dead, and now it just needs a formal funeral."

"Interestingly, the tombstone of this funeral needs Yi Ke to fill it with the Q3 financial report."

"Hoho, come on!!"

On September 15, Yi Ke's short position has exceeded the unprecedented 20 billion US dollars, setting a global record again. There is only half a month left before the end of the third quarter, and the financial report will be released in only one and a half months.

The mainland media rarely kept quiet, as if they were silently waiting or witnessing the possible foreign media predictions about Yi Ke's last straw.

On September 17, Fang Zhuo, who had arrived in Xi'an, suddenly received a call from Bingxin, and then ignored the local meeting to attend the next day and boarded a plane to Luzhou.