1928: The Rise of Giants

After coming out of the Franklin family villa, Ye Luo successfully persuaded these allies with his sharp tongue, making them determined to follow him and contribute money and efforts, paving the way for the subsequent short selling of the U.S. stock market.

This time he and Livermore returned to Hongxing United Group in a Rolls-Royce.

Compared with those politicians who are good at being a fence-sitter and often betray their teammates faster than anyone else, Livermore trusts Ye Luo, who is also a businessman.

If it weren't for the huge deal this time, he wouldn't want to deal with politicians at all.

Therefore, on the way back, Livermore reminded Ye Luo again: "Ye, you can only believe one-tenth of the lies of those politicians at most. If there are any unforeseen changes in the stock market, they will definitely put us first." Two people thrown overboard.”

"I understand, but Governor Franklin is not such a person, so don't worry." Ye Luo responded to him with a smile.

Livermore always felt that this young Chinese could not see through himself at all.

It's not that he has any extraordinary talents, but that he is simply elusive.

Already fifty-two years old this year, he has seen all kinds of young people, many of whom are extremely talented. But no matter how talented they are, young people are still young people. There is a decades-long experience gap between them. This is impossible. The gap is bridged by talent.

But Ye Luo is different.

Livermore stared at him for a while, and finally understood what the sense of violation was.

He was too calm, too confident.

No one who is engaged in risky industries dares to say with great confidence that he will definitely be able to profit from a certain investment, but Ye Luo shows amazing confidence every time, so confident that he seems to have predicted it a long time ago. It's all like this.

It is foreseeable that the ability to predict does not exist at all. If such a person really exists, wouldn't the world be a plaything in his palm?

Since there is no predictive ability, it means that he has 100% confidence in his own ability and judgment!

This must be a character accumulated from countless successes, and Livermore has never heard of such a "lucky" businessman.

As powerful as he is, he has also experienced several failures and bankruptcies in his fifty-two years of life. How could anyone be undefeated once? It's too outrageous.

Fortunately he is my ally.

At this moment, Livermore truly felt lucky to have such a person as his teammate.

Those on the opposite side of them are not so lucky.

He even wanted to pray for his opponent.

Ye Luo didn't know that in a journey of only a few dozen minutes, Livermore's opinion of him had already changed several times. He had been thinking about how to make a lot of money from the stock market these days.

Huixin became famous on the New York Stock Exchange through a wave of short selling. In contrast, Hongxing United Group was pushed to the forefront. As soon as their funds entered the market, they often encountered great resistance.

Naturally, you will continue to invest in those high-priced stocks, but you should not buy too many shares at once, lest people think that you are trying to steal shares to do bad things, which will make the stock's rise less impressive or even fall.

The era of buying whatever you wanted and investing however you wanted has passed in the blink of an eye.

Ye Luo had expected such a situation, but he just didn't expect it to happen so quickly. He hired 500 stockbrokers to disperse all the money and make it less visible.

"At the beginning of 1921, there were 1822 newly issued securities in the U.S. capital market, and this year it has reached 6417. These are only the official stocks listed on the New York Stock Exchange. If you include the large number of penny stocks in Amax, the number is difficult to estimate. ."

Ye Luo said calmly to Livermore,

"When the day comes for official short selling, I estimate that we have at least US$1 million in costs. Calculated with 10 times leverage, that means we can leverage US$10 billion in stocks. The current market value of General Motors is estimated to be US$10 million. The total value of the stocks issued on the market is about million or billion, which can basically capture a large number of high-priced stocks and mid-priced stocks. And if you want to ask for more, you must let them release more original shares."

Livermore looked at Ye Luo, shocked by this young man's thoughts.

Is he crazy?

You actually want to induce those companies to release their original shares?

Generally speaking, the exchange stipulates that after all companies are listed, the share capital issued on the market must account for more than 20% of the total share capital. At this time, the New York Stock Exchange and Amicus both use 25% as the minimum baseline. capped.

If you hold more than 34% of the shares of a company, you will have veto power. You have reached the level of security control and will be wary of other shareholders.

For listed companies, there are nine lines of equity life that all shareholders and company holders need to pay attention to.

1. Absolute control: holding 67% or more of the shares. Equivalent to having 100% power, shareholders can modify the company's articles of association/split, merge, change main business projects, and make major decisions.

2. Relative control: holding 51% or more of the shares. This is a line of control. The holding shareholder will have absolute control over the company, because the total shares of all other shareholders are not as large as his own, and they cannot shake his control.

3. Security control rights: Holding 34% or more of the shares, the holding shareholders have one-vote veto power.

4. Holding 30% or more of the shares, the holding shareholders meet the tender offer line of listed companies and have the power to acquire.

5. Holding 20% ​​or more of the shares and the shareholders meeting the warning line for major horizontal competition will alert the company holders and shareholders to guard against rivals who want to compete and secretly acquire shares.

6. Extraordinary meeting rights: Holding 10% or more of the shares, shareholders can make inquiries, investigations, prosecutions, liquidations, dissolution of the company, etc.

7. 5% of the shares is the warning line for major equity changes. Generally, changes in the equity of major shareholders exceeding 5% must be reported to the supervisory agency.

8. Right to make temporary proposals: Holding 3% or more of the shares, shareholders can hold a small meeting in advance to make temporary proposals.

9. Subrogation rights: Holding 1% or more of the shares, also known as derivative litigation rights, shareholders can indirectly investigate and have the right to sue (it is recommended to let the supervisory board or board of directors investigate)

Therefore, when a general company goes public, it will never issue more than 30% of its shares on the market to prevent someone from taking over the whole company and meeting the listed company's tender offer line.

In other words, if you don't first hold more than 30% of the company's shares, you have no way to formally initiate an acquisition. This is also a means to prevent horizontal competition.

However, during special periods, in order to stimulate the rise in stock prices and allow the company's market value to continue to rise, the leadership can decide through a meeting to put more original shares into the market. At this time, the total share capital flowing in the market will generally exceed 30%, and may even exceed 50%. % of the time!

Ye Luo wants to induce those companies to release their original stocks, and he will subsequently short the stocks.

Therefore, in Livermore's eyes, he is a devil who wants to devour many excellent companies in the United States!

An out-and-out capital demon! (End of chapter)