Reborn in America, I am a legendary short seller on Wall Street.

Chapter 180: Selling 2 shares of railway stock

At this moment, it was exactly 10:00 AM, just after the market opened.

Larry rushed to the VIP seats for retail investors on the second floor, found a seat near the front, and plopped down there to wait for the market to open.

The stock market was very lively today. As soon as the market opened, various quotes kept popping up from the quote machine and being recorded on the large quote board by two clerks who filled in the stock prices.

The VIP seats have small telescopes similar to those in an opera house, allowing customers to see the specific prices on the price list.

But Larry didn't need to. He had excellent eyesight and kept his eyes glued to a blank space on the far left of the bid board, waiting for the first bid from the New York, New Haven and Hartford Railroad Union.

The first batch of stock prices came in very quick succession. It took the two young men a long time to climb a ladder and copy down all the opening prices of the numerous stocks.

At this point, the first bid came from the New York, New Haven and Hartford Railroad Union.

"New England Railroad, $19.25!"

A young man pulled out the price quote paper strip from the price quote machine and shouted loudly.

The quote scribe focuses his attention on the upper right corner of the quote board, where there is a blank space, usually reserved for newly listed stocks of the day.

Immediately, the clerk secured the ladder to the rails, climbed up with chalk, and wrote "New York, New Haven and Hartford Railway Union" in the blank space, followed by the company's abbreviation, "New England Railway," and then filled in the price of $39.25.

Larry nodded silently; the price wasn't too unexpected.

When I bought these 20,000 shares, they were newly issued shares with a par value of $12.25 per share.

Larry spent a total of $25 to buy these 2 shares of New England Railroad.

Henry Goldman had previously complained to Sachs that if they had kept those 2 shares, they could have easily made a 50% profit in two weeks.

When Larry came to New York last week, Mr. Porter also asked his traders about the current popularity of this type of stock, saying that the market's enthusiasm for the merger of railroads remains high, which would lead to a price of New England Railroad around $20.

The opening price of $19.25 is not surprising.

However, Larry believes the stock will continue to rise.

New stocks are one of the hottest sectors in the market, so how could they not be sought after by the market?

Larry beckoned to a trader, gave him his account name at Paine Weber Securities, and then gave the instructions.

"Please help me register; I need to make a transaction in a bit!"

“Okay, Mr. Livingston!” The trader recognized Larry and quickly went to register the account for him.

Larry glanced down at the pen on the table, then took out his Double Eagle gold coin and fiddled with it in his hand.

After a while, a new quote came out.

"New York, New Haven and Hartford Railroad Union, $21!"

Larry remained silent, just staring blankly.

Strangely, the stock price did not rise on the next offer; instead, it fell back to $20.5.

Larry remained silent, the gold coins in his hand tumbling around.

After a while, the trader brought over the trading order printed with Mr. Larry Livingston's name and placed it on Larry's small table.

"Mr. Livingston, do you need a transaction now?"

Larry glanced at the clock on the wall and muttered to himself, "It's Monday today... No rush, wait a minute, you go ahead with your business, I'll let you know when I need to make a trade."

The trader immediately stepped aside.

Larry looked up at the price chart, but the stock price began to fall gradually. Twenty minutes later, it had even dropped below $18, closing at $17.75. "This stock price is not right!" Larry frowned and looked at the clock. It was exactly 11 a.m. The market was performing well, but New England Railways' stock price had not reached a new high.

Based on the stock's current performance, it is facing continuous selling pressure from buyers and there are no signs of a strong upward trend.

Larry frowned. Logically speaking, given the stock's weak performance, he should have already started considering how to sell it.

But Larry felt something was amiss; the selling pressure on the stock seemed immense, and the market's buying power was insufficient.

The problem lies here: with a strong market, a hot sector, and newly listed stocks, how can the market possibly keep falling?
Individual stocks or sectors should follow the overall market trend. The current performance of this stock could mean either that insiders are unwilling to buy, causing the stock to fall, or that the major shareholders are deliberately suppressing the stock price, waiting for a drop in the afternoon.

Which one is it exactly?

Larry frowned, carefully considering the two possibilities, but then one immediately came to mind...

He then turned his attention to another stock, New York Central Railroad.

That stock was one that had undergone restructuring. It was formed through a merger and restructuring with another brokerage firm, and it had performed exceptionally well since its listing!
Larry checked the stock price, which was $12.5. He remembered that the stock had opened at $15.

In other words, if we only consider the magnitude of the decline, the stock price of New York Central Railroad fell more than that of New England Railroad.

That should be fine now; it's just a sector-wide decline, I wonder what happened...

Larry then looked at other railroad stocks, including Erie Railroad, Great Northern Railroad, and Union Pacific Railroad, all of which were falling; at this moment, the railroad sector as a whole was declining.

But since the overall market is falling, there's not much to worry about, and Larry has decided not to sell for the time being.

As a newly listed stock, negative news about an individual stock is very dangerous, but a decline in a sector is not a problem. When the sector rebounds, the market will inevitably reverse, and the gains of newly listed stocks will definitely be greater than those of older stocks.

"Larry Livingston!" Mr. Potter's voice suddenly called from behind the seat.

Larry turned around and saw Mr. Potter walking anxiously behind him, bending down and whispering, "It's terrible! John Jacob Astor IV has come... He wants to buy our property. He says he can't allow outsiders to buy his family's property!"

Larry frowned and said, "Mr. Porter, did the lawyer deliver the newly registered title deed and property certificate this morning?"

Mr. Potter nodded. "It's here! As we agreed, the property owner's name is yours and mine."

Larry sneered, thinking to himself, "The deed is done, what's the use of you coming now?"

"Mr. Potter, did he come in person or did he send his butler?" Larry turned and asked.

“It’s the butler! He said John Jacob Astor IV has invited you to his mansion at four o’clock this afternoon…” Mr. Potter said with a frown, “They want to buy back these three properties at a higher price.”

Larry sneered and turned to Mr. Potter, saying, "Sir, he doesn't know you're involved and thinks I'm the buyer. Don't take it to heart, but don't offend him either. Just say you couldn't find me and that you can't keep the appointment!"

Mr. Potter hesitated, "Is this really a good idea? Larry, he's the most talented person in the Astor family right now!"

“Mr. Potter, we already have the title deed, and the property owner's name has been changed. What are we afraid of? Besides, I'm no longer with the brokerage firm, so I'm not afraid of offending him. Even if he has some family advantages, it won't affect me. Ignore him, just say you can't find me!” Larry said decisively.

Mr. Porter hesitated for a moment, but after thinking about it carefully, he agreed with Larry's statement.

Larry makes a good point. After all, the property's name has been changed, and the owner has officially changed the name. Even if Astor IV had any "right of first refusal," it would be invalid.

Mr. Potter was flustered because he was used to being conscientious and responsible, and he would naturally panic when important people were involved.

"Larry, is it really okay to do this?" Mr. Potter asked again.

Larry smiled. "It'll be fine! Don't worry about it, just do as I say."

Mr. Potter nodded and turned to leave.

(End of this chapter)