Chapter 155: Malicious Short Selling

In the early hours of the morning, the air of Financial Street was filled with the rich aroma of coffee and the smell of printer ink, intertwined with an invisible tension—
the unique scent of this place, a blend of caffeine, hormones, and money burning together.
Just the night before, Su Hao was clinking glasses at a dinner table, yet the next morning, he appeared refreshed and energetic in the conference room of the elite trading department.
This was his battlefield!
Every minute before the market opened was like a tightly wound war drum, urging everyone to operate at top speed.
Meetings, analysis, strategy formulation… a deluge of information converged, collided, and exploded here.
"President Su, the 'Paradise Papers' scandal is escalating rapidly.
It's like an atomic bomb dropped on the global financial world, causing chaos and turmoil.
Apparently, funds have been used to support terrorist activities, and now every country is cracking down hard. It's a climate of fear and paranoia."
"Yes, it seems some people in our country are involved too. The authorities have announced a large-scale tax audit…
However, in my opinion, it's more likely that things will turn out to be all bark and no bite here, and they'll just try to smooth things over."
A well-informed individual curled his lip, his tone full of disdain.
Indeed, other things are relatively easy to handle, like tax evasion. Everyone's used to it; what country doesn't have its share of such problems?
They're usually turned a blind eye.
But this time is different. The most critical issue is the label of "financing terrorism." This completely changes the nature of the issue, crossing a red line for all countries.
Whoever gets involved is doomed; even a god couldn't save them.
If it weren't for this, this matter probably wouldn't have caused such a huge uproar and global stir.
"...Hmm?"
Su Hao quickly flipped through the report summary in his hand, his gaze suddenly drawn to one document.
It was a risk warning report regarding the potential bankruptcy of "Xia Hua Shipping."
“Oh, Xiahua Shipping,” Liang Haiyuan explained immediately upon seeing this.
“President Su, this matter has been circulating quite a bit in the financial circles lately. Everyone’s saying Xiahua Shipping won’t last long and is about to file for bankruptcy protection.”
“Really going bankrupt?” Su Hao frowned slightly. “I remember… didn’t Xiahua Shipping have some good news a while ago, signing a huge order?”
“Yes, but it’s widely rumored in the industry that it was fake news!” Liang Haiyuan lowered his voice.
“It’s said that the order, worth hundreds of billions, was indeed signed, but for some reason, it fell through.
Moreover, there are rumors that it was all a staged event by their own people, designed to artificially inflate the stock price in the short term, making it easier for certain individuals to cash out and run away!”
Shipping companies, as the name suggests, rely on the vast oceans for transportation and international trade.
Ninety percent of global trade is completed via sea transport.
Once upon a time, China's shipping industry was incredibly prosperous and highly profitable.
But now, times have changed, global competition has become increasingly fierce, and countless hungry wolves are lurking around.
In this brutal battle, Xia Hua Shipping has gradually lost its strength and suffered repeated defeats.
"So, someone's maliciously manipulating the stock price?" Su Hao's eyes sharpened.
"Most likely!" Liang Haiyuan nodded firmly.
"However, they've played a rather clever game.
The signed order is a fact, the cancelled order is also a fact. Even if regulatory authorities intervene, it'll be difficult to find concrete evidence.
What's more troublesome is that behind this incident, it seems a very powerful international capital group is shorting the stock.
Our research department suspects it's the 'Elliott' vulture fund that's behind it!"
Elliott!
Su Hao was no stranger to this name.
These guys are notorious "vulture funds" in the international financial market, specializing in targeting poorly managed or exposed listed companies.
They are top predators in international capital.
Their "notoriety" in China's financial circles is entirely thanks to the "Jiang Jin Ambush" of years past.
At the time, Jiangjin Group was in the midst of a chaotic management transition.
Elliott Management, sensing danger, launched a textbook example of malicious short selling.
They secretly established short positions, then released a highly inflammatory short-selling report, directly accusing Jiangjin Group of financial fraud and executive embezzlement, instantly triggering market panic and causing its stock price to plummet!
Faced with this sudden blow, Jiangjin Group displayed an astonishing will to survive.
They made a drastic decision, urgently pledging many of its non-core assets, using the resulting massive cash flow to launch a frenzied buyback program on the secondary market, effectively building a defensive line with real money and withstanding the selling frenzy.
Ultimately, although Elliott Management failed to achieve its goal, it still managed to inflict a wound on Jiangjin Group, making a small profit before making a quick getaway.
After this battle, Jiangjin Group was severely weakened and took several years to recover.
Elliott Management, however, rose to notoriety overnight, becoming a shadow hanging over all Chinese companies.
Malicious short selling.
This is an extremely insidious and vicious short-selling strategy. It involves spreading malicious rumors about a specific company, artificially creating market panic, causing the target company's stock price to plummet, and then profiting immensely through large-scale short selling.
Internationally, many hedge funds and investment companies have made their fortunes through this unethical practice of "profiteering" and "kicking someone when they're down." Elliott Management was a prime example.
In fact, besides powerful players like Elliott Management, many domestic speculative funds and institutions in the Chinese market have followed suit, engaging in this kind of exploitative behavior, creating chaos in the market.
It is precisely because of the existence of these bad actors that the government has had to introduce various financial regulatory measures to try to regulate the market.
But the problem is, for every policy, there is a countermeasure.
No matter how strict the regulations, there will always be some "clever" people who can find loopholes in the rules and then repeat the same game with even greater gusto.
"The worst people in this whole affair are the major shareholders and executives of Xiahua Shipping!" Liang Haiyuan added indignantly.
"I heard that these parasites sold off all their shares and ran away with the money when the stock price was driven to its peak!"
"Damn! Isn't that collusion between insiders and outsiders to swindle retail investors?" someone exclaimed.
"Exactly!" Liang Haiyuan slapped his thigh.
"The worst off now are those retail investors who were tricked into buying in; they're all stuck at the top, with nowhere to cry!
On the other hand, those short-selling forces at 'Elliott' are probably already celebrating with champagne!"
Unfortunately, this kind of scheme—where major shareholders and executives of listed companies collude to manipulate the market and fleece small investors—plays out every now and then in China; it's practically a traditional spectacle in the stock market.
Although Su Hao also felt sorry for those retail investors, there was nothing he could do.
All he could do was remind himself and those around him to be more careful when investing in the future and try to avoid this kind of situation…
“Hmm?”
Here we go again!
That familiar yet strange feeling welled up inside him once more!