Chapter 257 [The punctuation marks of institutional analysts cannot be trusted]
General Electric Group, Office of the President, Headquarters.
At this moment, CEO John Flannery, who had just taken office, was sullenly reading research reports published by several institutional analysts. Within a few days of taking office, the company had been shorted by capital institutions with a total investment of US$10 billion.
It's not a small amount of money.
GE already had a lot of shit to deal with, and now that it was being stabbed in the butt, John Flannery was furious.
In his eyes, although Lu Ming is a Chinese from across the ocean, he is just as greedy and greedy as Wall Street.
At the moment, the research report Flannery was reading was all bad news for General Electric. He knew it was bad news and would be angry when he read it, but he still wanted to read it, and then he was very angry.
RBC Analysts:
[General Electric’s share price fell below $25 today, which may be a precursor to a catastrophe. The company’s first-half performance fell year-on-year, and its full-year performance is expected to decline. The company is expected to announce a dividend cut in November of the second half of the year.]
Morgan Stanley analyst:
[General Electric’s long-term investors need to be cautious in trading. The company may lower its dividend to 70 cents before November 13. The new CEO John Flannery is the right choice for General Electric, but the challenges it faces are more severe than expected.
Large, downgraded from equal weight to underweight, with target price lowered from $27 to $21.]
UBS analyst:
[Although the second quarter results exceeded market expectations, concerns remain. Expectations and dividends may further decline, and there are execution risks in General Electric's strategy. Tiansheng QDIE Fund's target price of US$5.5 is a bit excessive, but it also supports the market's
Pessimism on the stock is strong. Downgraded to Neutral from Buy, price target lowered to $21 from $31.5]
John Flannery saw that the vast majority of institutions expressed pessimistic expectations in the research report information, and many institutions lowered their ratings one after another. He was so angry that he immediately dumped the research report and cursed in the office.
He swore that if the Tiansheng Capital research team dared to come to the company again, they would be beaten up by the security guards and kicked out.
Of course this is just an angry emotion and thought.
"BOSS, the press conference is about to begin." Flannery's secretary knocked on the door and came in to remind him that he had been shorted recently, and the market wanted to hear his response, and there must be a response.
John Flannery waved his hand, adjusted his mood, and managed his expression before leaving the president's office and heading to the press conference.
The institutions that downgraded the ratings actually have an interest relationship with Tiansheng Capital. After all, Lu Ming spent US$10 billion in short-selling funds. The absolute majority was Wall Street LP institutional funds, which also included US$100 billion in leverage funds, as well as from institutions.
Borrowed 390 million shares of General Electric stock.
The interests here are complicated.
Of course, the downgrade of the rating by Wall Street institutions was also based on rigorous analysis. They also read Lu Ming's short-selling report and found that there was indeed a problem.
In fact, some institutions have actually discovered the problem of "black box operations", but as an outsider, Lu Ming doesn't have so many scruples. The majority of short-selling funds are still from Wall Street, and that's all for the rest!
120 billion US dollars involves the interests of too many people and too many institutions. Lu Ming is confident that he will not be stabbed in the back by institutions such as Goldman Sachs Group. They are losing their own money by using Tiansheng's knife, so of course they will not do this.
.
When Tiansheng Capital exposed this mess, General Electric was suspected of concealing serious financial problems, and Wall Street also tacitly supported Lu Ming, so the Securities and Exchange Commission of the United States had to pay attention.
Tiansheng Capital’s short-selling report on General Electric points directly to two core issues:
One is the source of long-term contract revenue in the power industry. Currently, GE’s power equipment and oilfield services divisions are the company’s most problematic divisions. According to its financial report information disclosure, approximately US$15 billion comes from the power division;
The second is GE's disclosure last week that it needs an additional $15 billion to support its legacy insurance business debt.
The fermentation of the news also revealed that General Electric is currently facing at least two shareholder class actions represented by multiple law firms, accusing General Electric of making misleading statements about its long-term care insurance debt.
General Electric is being investigated by the SEC.
The flower of prosperity bears the fruit of decline, which is the future of General Electric.
…
The short-selling report published by Tiansheng Capital and the use of real money to firmly bet on the six major companies, especially General Electric, gradually aroused the resonance of other investors in the market, both at home and abroad.
Currently, a domestic exchange group specializing in external trading is discussing the incident of Tiansheng Capital shorting General Electric and other six major companies.
There are also some domestic retail investors investing in the U.S. stock market, but the group is small, and the procedures and procedures for making an external offer are relatively troublesome, but someone must have done it.
"I allocated some positions and followed brother No. 1 to copy the work, and shorted a handful of General Electric."
"I got some Tesla short orders earlier than Brother No. 1, haha. I feel stable."
"Recently, many Wall Street institutions have downgraded General Electric's ratings in research reports. Looking at the news a while ago, I laughed to death. Foreign institutions are also talking nonsense. How many investors have been deceived by this..."
"What's going on?"
"If you look through previous research reports, General Electric's performance in the first half of the year has good momentum, but the overall stock price has fallen by -16.6%. At that time, Tiansheng had not shorted. Wall Street analysts finally concluded
Said: The stock price decline of such an excellent company may be to create buying opportunities for investors, haha, creating opportunities to be cheated~~, and listed six major reasons... Phew~~, Brother Yi just released a short-selling report, and Yi Ge just released a short-selling report.
A large number of institutional analysts are following the short position, what do the people who take over the market feel at this moment? Haha!"
"I found an original research report and listed six bullish reasons: the new CEO's reforms, revenue is still growing, costs are being cut, equipment profits will rise sharply, the integration of Alstom and Baker Hughes
Giant, revolutionary digital solutions... and the claim that next year will be the year of GE's 'reset' is bullshit."
"The operation of copying institutions is also very risky. Brother Yi, please don't cheat me!"
"Brother Yi will never cheat anyone. This time Tiansheng actually spent 35 billion U.S. dollars to short these six companies. I will admit that he and Brother Yi were buried alive."
…
Just when the outside world is focusing on various analyzes and interpretations of the six companies shorted by Tiansheng Capital, as well as being bearish on the market outlook and so on, Brother Yi has already begun to shift the battlefield and steal the butt.
That is, go long!
Going long is the real source of the biggest profits. Although short selling has great eye-catching effect, frankly speaking, it does not have much profit-making effect. The maximum profit earned by short selling does not exceed 100%, while there is no upper limit in theory for going long.
This time, 35 billion U.S. dollars of short-selling funds were invested, but Tiansheng had 90 billion U.S. dollars of operable funds, and the remaining 55 billion U.S. dollars were lying around at any time, and another 30 billion U.S. dollars of leveraged financing funds had not yet been received.
On the evening of Tuesday, August 8, Lu Ming came to the company headquarters, held a meeting at the Tiansheng QDIE Fund Management Department, and then moved to the trading room, where he began to conduct night trading operations.
The Qiwei people were on the outpost in the Magnesium Kingdom, otherwise they would definitely have been executed by him, and most of the manpower was taken abroad by him.
Lu Ming could only work overtime and operate the business himself.
At this moment, the general assistant of the QDIE Fund Management Department reported to Lu Minghui: "Chairman, the 326 operating accounts are ready, the funds are in place, and they are waiting for your trading instructions."
