What's wrong with me being a rich man?

Chapter 446 The Most Venomous Snake

Over the past two days, the mountain peak has spoken out through the media, but the targets it attacks are far less vulnerable than before.

This raises a question.

Did we really cross the mountain peak?
Without a conventional preface and without solid evidence, there is no sharp drop in stock price. And if these things cannot be done, even if it really hits the peak, what is there to fear?

Of course, this is actually more common among short sellers.

Just like Ackman, who strongly supported Vanilla this time, he spent $10 billion to short Herbalife two years ago without any concrete evidence. He just tried to influence the stock price through impassioned speeches at investment conferences, but the stock price did not move as he wished, and he eventually had to admit that the short selling failed.

The practice of crossing mountains is not uncommon, but it's not quite as "mountain-crossing" as some other methods.

This has led some media outlets to question whether someone has used the name of Mountain Peak, with Allergan, the company targeted for a hostile takeover, being the prime suspect in an attempt to disrupt the acquisition.

Is someone using my account?

This question lingers in the minds of many people.

Xu Xin, who was in Hong Kong before the Lunar New Year to make an appointment, also expressed a similar view when talking about the current situation.

"It might be a fake acquisition, and Allergan has ample reason to interfere with this deal!"

Yu Xing chuckled in his office, glancing between Li Song, who had come with him, and Xu Xin, who seemed quite interested: "Really? Hey, no, why do I feel like you two are so interested in short selling? Whether it's true or not, who cares?"

Upon hearing this, Li Song immediately emphasized, "President Yu, this is a merger and acquisition deal worth over 3000 billion yuan. Just think about the scale, isn't that exciting enough? Have you gone mad from building cars in Lingang?"

He felt that President Yu was already living a life of decadence in the car manufacturing industry in Lingang.

Yu Xing was both amused and exasperated, but still corrected him, "What merger and acquisition case? Isn't it a hostile takeover? I saw the news headlines before, and President Xu just said the same thing. But whatever, let them be. It doesn't stop me from building cars."

Xu Xin slowly took a sip of tea and explained her motivation: "I just think that the business model of companies like Vania is interesting. There is a lot of discussion about this both domestically and internationally. What does President Yu think of its situation?"

She knew that Yu Xing liked to talk about these things. He was very willing to share when he was recording a program on Dragon TV. Last year, he even recorded a video himself talking about Tencent's Weishi.

“I’m just listening to bits and pieces, what can I do?” Yu Xing shrugged, then pondered, “But this model just doesn’t sound reasonable. The question is, how does this unreasonableness of a listed company translate into reality? I feel there’s something fishy going on here.”

He casually remarked, "Whether it's collusion between power and money or whatever, there has to be some supporting reason, right? Whether this reason can continue to support us for a long time, and whether it can maintain its dignity after being disrupted to this extent by Shanfeng, may be an important factor in the next trend of Vania's stock price."

This is a discussion that Yu Xing and Liu Wanying had.

Vania’s radicalism is by no means static or isolated. This includes his deep cooperation with well-known short seller Ackman in a hostile takeover. How the two sides got together, or what forces were involved in the connection, is a lot of room for speculation.

However, it's difficult to get to the bottom of things by going over the mountain peaks; the only thing to do is to put the matter on the scales first.

Some things weigh less than four ounces on the scale, but if you put them on the scale, they can weigh a thousand pounds.

By using his own credibility to expose the flaws, we'll see if any knives follow and try to stab them in the back... We'll have to observe.

Xu Xin couldn't help but exchange a glance with Li Song, thoughtfully considering the situation.

As newly minted short sellers, they were very interested in studying their "mentor's" move this time and were considering whether to join in, but the starkly different move made them hesitate.

Li Song was a beat slow, but couldn't help saying, "President Yu, you're really insightful. Things have just come out, but you've already grasped the interesting direction. I didn't even think of that."

Although Yu Xing had already studied Vania from all aspects, he could only accept this praise at this moment.

"I still think that Vania's radicalism is hard to sustain," Xu Xin said sincerely after a while.

“Yes, radicalism itself implies instability. This is a hostile takeover that is among the best in the industry, and it’s also a globally renowned short seller. The situation is more complicated and more unstable.” Yu Xing laughed. “Didn’t we all say that Mountain Peak is on our side? Maybe they had a similar feeling, and that’s why they decided to give it a try.”

He paused, then shook his head slightly: "It's easy to express opinions, and it's also easy to find similar ones, but it's still difficult to actually use funds to act according to those opinions."

“Vanlia’s short positions haven’t changed that much. If this peak is real…” Xu Xin pondered, “it might not just be driven by profit, but also by the enjoyment of doing business.”

Li Song picked up the conversation: "Crossing the mountain peak is a bit different. One generation goes by, another comes, and deception endures forever."

Yu Xing chuckled.

Li Song knew that President Yu had always looked down on short sellers, but seeing Guoshanfeng's involvement in a hostile takeover of over 3000 billion yuan, he longed for his own "real research" to have such a day.

So he immediately said, "Mr. Yu, putting aside everything else, and ignoring all that short selling and philosophical stuff, just looking at the nature of this matter, you used to study medicine. How can you stand by and watch Vania's practice of desperately raising prices? Isn't Guoshanfeng's intervention this time a move to set things right?"

Yu Xing pursed his lips.

Li Song felt that President Yu was somewhat speechless, so he continued, "President Yu, a gentleman judges by actions, not intentions. Don't worry about what people are thinking. Isn't this the case?!"

"Li Song, you..." Seeing that Li Song was so insistent, President Yu had no choice but to say, "Yes, yes, you're right. Let's stick to the facts. We should give it a thumbs up."

Li Song smiled; it felt really good to have President Yu change his mind.

He gave Xu Xin a look that said, "You have to love what you do."

Yu Xing treated everyone to dinner that night, but Li Song couldn't help but check the changes in Vania's stock price from time to time. To his disappointment, Vania's stock price rose instead of falling on the third day, and the negative sentiment from Guoshanfeng seemed to have been repaired.

The next two days are the weekend in the United States. If things continue like this, the commotion caused by the mountain peak will likely disappear completely.

While listening to Li Song's words at the dinner table, Yu Xing said jokingly, "President Li, look at you with such a worried face. Anyone who didn't know better would think you were Guo Shanfeng."

Li Song sighed sincerely, "If I could cross the mountain peak, that would be great!"

He longed to challenge a major short seller like Ackerman on the international stage, but he was just a small-time short seller with no achievements yet. Yu Xing laughed heartily, even choking on his own laughter a couple of times.

He finally raised his glass: "Although I don't like short selling, thinking they're purely in it for profit, it would be nice if there were fewer scams in the world. Come on, let's wish that guy, Guoshanfeng, all the best this time."

Xu Xin and Li Song picked up their wine glasses, a strange sense of pleasure emanating from them.

Well, even a nobody like me can't help but puff out my chest when I think about my mentor, who's battling it out on the international stage.

That night, Guoshanfeng made its third move. Instead of going through the media, it published its previous open letter on its official website, thus confirming its identity as Guoshanfeng itself.

However, without concrete evidence, it's like a venomous snake without venom; this move only earned Ackerman a few more sarcastic tweets.

As the weekend arrived in the United States, Saturday passed uneventfully, and even the previous media attention subsided once again.

“Trying to alert the enemy is a bit like a tactic of creating an empty city.” Yu Xing glanced at the latest situation and said to Liu Wanying, “I think Ackerman will continue to hold shareholder meetings. If that doesn’t work, then he can allocate some Bitcoin.”

Liu Wanying did not respond much.

But she called back two hours later: "Let the bullets fly a little longer."

Yu Xing's spirits lifted: "A new situation?"

“There’s nothing new on the surface,” Liu Wanying said, “but the short position in Vania, which was just disclosed, is 2840 million shares, almost double!”

Vania is listed in the United States and publishes its latest short position every two weeks. Compared to 4% two weeks ago, the latest data has reached 7.78%, which means that nearly $15 billion has flowed into short selling in just a few days.

If we calculate based on the number of times the funds have appeared above the mountain peak, this amount of money is practically skyrocketing!
"Is there a new force shorting the market? Is it a competitor?" Yu Xing quickly realized and guessed, "It shouldn't be retail investors, right?"

"It's hard to say, but it's a positive sign." Liu Wanying said seriously, "If the cash flow continues like this, the amount accumulated in the next half month will definitely be considerable."

Over Peak has only invested $3000 million so far, and this inflow of funds is 50 times that amount!
If confidence is measured by the size of the money, the latter's confidence is stronger than that of the one who fired the first shot.

Liu Wanying believes that such a large influx in such a short period of time could not possibly be from retail investors, and whether it is from peers or stock market gurus, the signal is worth waiting for.

The unusual behavior of Vania's short positions not only caught the attention of Guo Shanfeng, but also of the parties involved.

Ackerman, in particular, was very experienced and astute. He immediately flew to Washington to join Vania’s previous lobbying team.

"With new funds coming in, it certainly won't be a peak."

"Vanlia needs more good news."

"The drug price control plan next week is a key focus, and we absolutely cannot let it pass through Congress under any circumstances."

Ackerman had previously disregarded Vanilla's lobbying efforts in this regard; in fact, given the donations, Congress, which was controlled by Republicans, was unlikely to pass a drug price control bill.

However, after the influx of new funds, he vaguely sensed danger.

Therefore, we must not allow any unexpected results in this vote.

If Congress rejects the bill, Vania's stock price will inevitably rise, putting significant pressure on short sellers.

He spoke with Vanilla CEO Pearson, focusing on lobbying Congress, suspecting it was a turning point.

There were no changes over the weekend; the only noteworthy event was the surge in short-selling funds.

On Monday, Ackman spent the entire day in Washington meeting intensively with his congressional friends, inevitably discussing the acquisitions he was working on, and expressing confidence in the prospects.

However, just when he thought the danger came from the recent vote on the bill, a report from The New York Times spread rapidly and directly broke through Ackerman's psychological defenses.

According to sources close to Vania Pharmaceuticals, The New York Times, a well-known media outlet in the United States and even globally, obtained firsthand information that Vania has built a closed-loop system of self-production and self-sales by establishing and holding a controlling stake in the specialty pharmacy Philidor RX Services.

Philidor appears to operate independently, but in reality, its operating expenses are paid by Vania. Regardless of whether patients actually use the expensive drugs, revenue is recognized as soon as the drugs are transferred to the warehouse, thereby creating fictitious revenue and improving the financial statements.

In other words, the already strained financial situation of Vania Company actually contained some falsified information.

Financial fraud? Related-party transactions?
Is it really the Enron of the pharmaceutical industry?

Following the New York Times report, Guo Shanfeng's earlier comparison of Enron to Vanya was brought up again, and what emerged after breaking through the public relations barrier were assertions such as "acquisition addiction," "price exploitation," and "a vicious cycle driven by debt."

Who is the source of this leak? Is the source Guo Shanfeng?

Many people had such speculations in their minds, but more people were forwarding and spreading the latest information, as well as... using money to short Vania.

Financial fraud exposed at this critical juncture will not be easily overcome, and coupled with its own aggressive strategy, it is very likely to trigger a chain reaction!
However, before more funds could flow in, following the exposure of the financial fraud, the SEC announced an investigation into Vania, finding that it had violated the disclosure requirements of the Sarbanes-Oxley Act by failing to disclose the control relationship and revenue dependence of Philidor in its financial statements.

The New York Times made the exposé on Tuesday afternoon, the SEC announced the start of its investigation in the evening, and by nightfall, prominent law firms across the country had accepted class-action lawsuits from patients suing Vania for price gouging.

From evidence to regulation to public opinion, the situation facing Vania suddenly changed.

Moreover, just before the market opened on Wednesday, prominent politician Hillary Clinton gave an interview, denouncing Vania for drug price fraud and urging Congress to pass a bill next week to restrict drug price increases.

Vania was caught in a coordinated attack from multiple dimensions within a single day, which led to its sharp drop at the opening bell.

“Funds are definitely pouring in like crazy right now; Vania’s business is too big.” Liu Wanying stayed up all night and, instead of contacting Yu Xing by text or phone, came to see him in person.

"Radical, radical, this is like cooking oil over a raging fire, it will surely backfire." Yu Xing thought of Vanya, and then looked at the changes in the past twenty-four hours, and had only one feeling, "Stirring up trouble will only bring more benefits."

(End of this chapter)