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

Chapter 89 Pyramid Intensification (Seeking August Recommendation Tickets and Monthly Tickets)

Larry's current small account margin is 4x leverage, which means that if Colt's stock price is $50, then Larry would need to spend at least $12.50 to buy or sell one share.

Larry currently has $1.2 in his account, and he just sold 800 shares at $48 and three-quarters, using $9750 of his margin.

Of course, since the transaction price was unknown at the time, the number of shares allowed for trading by the brokerage firm could have some margin of error.

At this moment, Colt Firearms' latest price is $39.1. Larry has already made a short profit of $9.65 per share, meaning that 800 shares have generated a profit of $7720.

If we add the remaining margin of over $2000 after the first order, this unrealized profit gives us approximately $9700 in margin that we can use.

In theory, Larry could sell another 800 shares to continue shorting...

But Larry chose to be cautious this time because Colt has already fallen below $39, and he couldn't predict how long it would fall today, or how low it would drop to.

Previously, when Larry and Mr. Wallace were plotting this scheme, they didn't actually have Mr. Wallace spread rumors that "Collt might be committing financial fraud," because that would be a very serious accusation, and if such news got out, Mr. Morgan would also find out that the two of them were behind it.

Larry and Wallace's initial intention was simply to punish insider trading, so it was enough to make them sell in a panic and allow them to easily acquire shares to go long at a low price.

Compared to Mr. Wallace, Larry could go one step further: he could use insider trading to short the market. Now that the plan is halfway complete, Larry has decided to moderate his short-selling strategy.

Therefore, Larry decided to adopt a pyramiding strategy, which means that the number of new shorted stocks should be at least half that of the previous ones.

This ensures that one's average holding cost remains high, so that even if the market reverses, the stock price will not quickly exceed the cost of shorting.

Larry had been thinking about this short-selling plan for two days, and now there was no time to hesitate.

Larry then notified the traders again.
"Short Colt Firearms at market price, 400 shares!"

The trader squinted at Larry, but still dutifully filled out the transaction form. After Larry signed it for confirmation, he turned and walked back to the telegraph room...

Meanwhile, at the Colt company office building.

Mr. Wallace is having a meeting with Colt's executives.

Colt's senior management team was present, including Mr. Andrew, Mr. Harper, and two other executives; however, Mr. Wallace's team was in a much worse situation. Apart from Mr. Wallace, only two members of the bond underwriting team managed to rush back before the meeting...

The whereabouts of the other two are currently unknown.

Mr. Wallace thought with sympathy: It must be quite difficult for an ordinary person to leave Colt Company at night, run more than ten miles to Hartford or other towns to send a telegram to his accomplices, and then run back to Colt Company overnight!
Anyway, the two people sitting behind Mr. Wallace were pale and exhausted, their bodies covered in cold sweat from strenuous exercise on a winter night.

Mr. Wallace pretended not to see it. After all, his current persona was that of "a destitute man who had lost all will to live." He was too busy taking care of himself to care about others, and he didn't even bother to ask where the other two had gone.

But the two bond underwriting teams looked at each other and immediately realized that all four of them had leaked inside information about Colt's bonds.

The two men simultaneously thought of one thing: Neither of them are good people; they secretly colluded with outsiders to collect Colt's chips behind my back!

Colt's financing project has now fallen through!

If I'm unlucky, you're unlucky too! Serves you right!

Across the conference table, Mr. Andrew remained calm and composed. He looked at Mr. Wallace, the project manager, and asked with a slight frown.
"Mr. Wallace! Didn't your companion go to New York to consult Mr. Morgan? Has he returned yet? Is Mr. Morgan willing to invest in our Colt Corporation bonds or subscribe to our newly issued shares?"

Mr. Wallace continued to play along with Larry's plan from the previous day at the meeting.

Before the meeting, Mr. Wallace, who had deliberately appeared disheveled, now looked extremely haggard. He frowned and said to Mr. Andrew,

“I’m so sorry, Mr. Andrew. Well, if I may be so bold, something has gone wrong. It’s possible that Mr. Morgan and his senior partners have discovered an error in your company’s financial statements, and they are working overtime to double-check it.”

After saying that, Mr. Wallace glanced at the four managers and continued,

"This new development could very well affect our financing plans. My young colleague personally went back to the train station Friday night to tell me, and now he's back in New York, ready to hear the latest news. This isn't what either of us wants, and it could very well have a negative impact, but... there's nothing we can do but wait until Mr. Morgan confirms it again..."

Mr. Wallace phrased his words tactfully, but the underlying meaning was clear: if Morgan discovered any problems, then the financing project would be off!
Mr. Andrew merely frowned slightly, his face showing neither joy nor sorrow.

He calmly said, "I believe there are no problems with the company's finances. I personally check the accounts every year. It must be Mr. Morgan who made a mistake..."

But before he could finish speaking, Mr. Harper was already in excruciating pain, as if he were sitting on a nail. Ignoring Mr. Andrew's continued talking, he hurriedly said to one of the executives beside him, "Excuse me, my stomach suddenly hurts a lot, I need to go to the restroom..."

After saying that, he slipped out of the conference room without Mr. Andrew's permission.

Mr. Wallace remained outwardly calm, but inwardly he couldn't help but sneer.

"Ha, I caught you! Even your Colt company has scum who betray the company's interests for personal gain!!"

The members of Mr. Wallace's two bond underwriting teams stared at the spot where Mr. Harper had disappeared, cursing inwardly.
“Scum!!”

Mr. Harper rushed out of the meeting room and immediately ran to the company's telegraph office, hurriedly telling the telegraph operator...

"Send a telegram to Jay for me, telling him: the tracks are rusting, stop at the Chicago Express Clearance Yard, do not leave any cars. This is urgent! Hurry up!"

At that time, telephones could only be used for short-distance communication. Not only did formal and documented transactions require telegrams, but ordinary long-distance communication also required telegrams.

Upon hearing Mr. Harper's order, the Colt telegraph operator immediately sent a short telegram as instructed.

Fifteen minutes later, at the New York Stock Exchange.

A trader in a striped suit, clutching a trading order, forced his way through the crowd of traders shouting wildly at the railway stock counter in the middle of the exchange. He rushed to the "Manufacturing and Arms" counter in the southwest area, raised his index and middle fingers to the sky, and shouted loudly to the surrounding traders.

"Do any of you want Colt firearms? I have 12,000 shares here."

Three or four traders turned around and asked, "What price?"

The trader in the striped suit hesitated for a moment, then turned to the price clerk and asked, "How much for the last Colt?"

"37.5 yuan, 400 shares just traded!" the quoter replied briefly.

“Me too, $37.5!!” the striped suit jacket immediately said.

"Pfft!" The other traders sneered disdainfully and turned their faces away.

The striped suit was gesturing for sale, but he looked like a fool and nobody paid any attention.

"Colt, 37.5! Does nobody want it?" the striped suit jacket shouted!
A floor trader he knew frowned and shouted at him, "Don't waste your time! That short order of 400 shares just now was only filled after it wiped out the tail end of one of our long orders. Colt stock opened lower today, and nobody's buying it, especially since you're holding so much!"

Sweat beaded on the striped suit as he continued shouting, "36! You can take my order for just 36 dollars!"

Still no one paid any attention... The traders' attention was drawn to another trader who was offering a high price for Winchester Arms stock.

The striped suit continued to drop in price, "35.5! Oh no, 35! 34!! Damn it, 32.5, it can't go any lower."

Hearing his desperate shouts, a trader lazily turned around and yelled, "Colt, 500 shares!"

The left hand with five fingers spread out means "I want it," and the floor trader placed a limit order for 500 shares.

The deal was struck, but only for 500 shares; the striped suit still holds 1.15 shares.

The man in the striped suit, feigning composure, continued shouting, "32.5 yuan, that's the lowest I can go! Anyone interested?"

But there was no further response from the trading floor. The traders were busy discarding invalid orders and wandering around looking for the best price to execute other orders.

The man in the striped suit glanced at the wall clock; it was almost 11 o'clock. Sweat streamed down his forehead...

Finally, he couldn't hold back any longer. Holding up his index and middle fingers, he yelled at the people around him, "30! Damn it, Colt, 30 dollars!! That's the bottom line. If you don't want it, I'd rather return this order!"

His shouting attracted the attention of the traders in the surrounding room, but they just glanced at him and then turned back to their own business...

　感谢李子大哥15章月票打赏；感谢泣血清风7月票打赏；感谢我是黑贞12月票打赏；感谢二狗93 14月票打赏；感谢风斜云清8月票打赏；每章月票推荐票都是您对我的支持，不再单另感谢，祝各位大作手财源广进，恭喜发财。

　　
　
(End of this chapter)