Rumors are like the wind, blowing from Shanghai to LeTV's headquarters in Beijing, to the office on the west side of the top floor, the 14th floor.

Here, Jia Yueting made decisions concerning building a smart ecosystem for television and mobile terminals, finance, and car manufacturing, every decision that affected the fate of the company.

"Boss, I've understood the situation clearly. Taihe and Xiyou are indeed intensively inquiring about our securities sources everywhere." Board Secretary Zhao Kai pushed the door open.

Jia Yueting was facing the bookshelf with his back against the large desk, supporting the edge of the desk with his backhand, his eyes slightly closed, and no one knew what he was thinking about.

The vice president beside him silently signaled with his eyes, and Zhao Kai racked his brains to organize his words and continued to report: "The actual short-selling operation has little impact on us, but there is a great risk of market sentiment."

"Please give more details and tell me from the beginning." Jia Yueting spoke calmly and steadily.

"There is no upper limit to the rise of stocks, and the maximum drop is that the price will be zero and the company will go bankrupt. In other words, the profit space of short selling is limited, and the maximum profit is 100%, while the loss space is unlimited."

Zhao Kai paused for a moment and said, "On the other hand, securities lending is essentially 'borrowing money', which requires paying high interest and bearing a lot of operating costs."

"Compared with long positions, short selling through securities lending has high risks and a high investment threshold. Ordinary retail investors in the domestic market cannot play this game, as it is almost completely monopolized by financial institutions."

He concluded slowly and cautiously: "The overall market trading liquidity is very low, and the number of short-selling stocks we are currently trading is only a few thousand shares."

Zhao Kai looked at the vice president standing next to him, thought for a moment and added: "And when we went public, some securities firms got some share underwriting quotas; and then institutional shareholders bought our shares from the stock market and lent them to securities firms for short-term securities lending to earn interest."

"These 'securities sources' are limited, and preliminary estimates show that they will not exceed 3% of the company's total share capital. Even if Xie Jingxing buys them all and shorts them, it will not have the effect of crashing the market." He made the judgment reluctantly.

Jia Yueting turned around and said calmly: "I can't help but feel annoyed by him."

Zhao Kai remained silent. The statistics on the number of "securities sources" available for short selling were imaginary numbers. The focus was on LeEco's equity structure.

Through various operations, Boss Jia actually controls more than 20% of the shares. The absolute market leaders such as Agricultural Bank of China, Industrial Bank, and State Administration of Foreign Exchange are among the top ten shareholders, and their combined shareholding ratio is just over 30%.

As the first GEM stock in the first half of the year, LeTV's secondary market equity is relatively dispersed, with a large proportion of equity circulating externally, not including non-public private placement financing and share issuance.

In theory, most of these shares can be used for short selling.

So the question is, an investor with strong credibility first raised doubts publicly, and then took practical action to issue margin trading inquiries to the entire industry.

Any institutional shareholder would consider this carefully. They hold LeEco shares because they are optimistic about the long-term rise in the share price, and they lend the shares to Xie Jingxing for short selling in order to earn interest and commissions in the short term.

It's not that I really want to see Xie Jingxing destroy LeEco, and then give them LeEco stocks at a price of one cent per share, and then they will lose all their money.

Therefore, only fools would engage in margin trading in this situation. Taihe Xiyou is destined to not be able to find many "securities sources" because the brokerage and institutional investors holding LeTV shares are considering selling off their positions and running away!

This is what Zhao Kai meant by market sentiment risk. The high risk of short selling keeps non-professional investors out of the market. On the contrary, with the natural high risk, market players must possess the most basic rationality.

Translated into human language, the secondary market is the classic - positions represent positions.

Xie Jingxing didn't care whether he could short LeEco through securities lending investment operations. Taihe and Xiyou, two top industry institutions, had already conveyed their clear attitudes to the entire industry, including all institutional shareholders of LeEco.

What's so annoying about that? This is clearly a grand conspiracy to create panic expectations of a bearish LeTV stock price. Who agrees and who opposes?

Short selling through margin financing cannot kill people, but bulk selling by institutional shareholders can.

"Well, the stock market turned from bullish to bearish in the first half of the year, and all shareholders who should have sold their shares withdrew. The institutional shareholders who stayed and firmly held our shares were either deeply trapped or optimistic about us in the long term."

Zhao Kai didn't bother to be tactful and reluctantly analyzed: "No matter what the reason is, their position is bound to us. If they sell off their shares collectively now, they will definitely lose money. It is better for them to share the current risks with us and retain future profit opportunities."

"Xie Jingxing can't scare these people away as long as the financial institutions don't reach a consensus on their bearish views on us."

If the entire industry is bearish, institutions holding LeTV shares will be caught in a prisoner's dilemma.

In case there are shameless people who rush to sell and crash the stock price, whoever sells late will be the unlucky one. OK, no one can run faster than me!

“No matter what, we cannot just stand by and watch Xie Jingxing attack us without reason.” Jia Yueting determined the main idea.

Taihe Pomelo influenced its peers, professional institutions influenced retail investors, risk sentiment was eventually transmitted to the market, and LeTV's stock price collapsed.

The vice president, who remained silent throughout the entire process, ordered Zhao Kai: "You go and get busy first."

"Let Xie Jingxing shut up."

As the office door closed, Jia Yueting's expression changed and his eyes revealed a murderous look.

Eliminate the risk at the source. The vice president nodded slightly with tacit understanding: "I will call Director Chen right away."

"Do you need a dinner date?"

Jia Yueting spoke in a low voice, staring blankly at the man in front of him - Liu Hong, the current deputy general manager of LeTV.

Last year, when dark clouds were gathering over LeTV, he went to the United States because LeTV's capital chain was unsustainable.

At the critical moment, Liu Hong went to JD.com to get back the sales proceeds of over 100 million yuan of LeTV TV and issued employee salaries to ease the crisis. So after Jia Yueting returned to China, he made him a key official in just half a year.

As for how Liu Hong was able to get JD.com to make an exception and pay the sales amount in advance, and how he completed the under-the-table funding transactions required by LeTV time and time again, he didn't care.

"No, I can handle it."

Liu Hong followed suit and changed the subject, saying, "Make more preparations and release good news to offset the negative sentiment. Can we make any moves on LeEco Pictures?"

"There's no rush for this. I have other arrangements to create good news." Jia Yueting seemed confident.

Since the stock market crash, LeTV's stock price has continued to fall. He has considered merging LeTV Pictures' high-quality assets into LeTV, using this as good news to boost LeTV's stock price.

However, is LeTV Pictures really a high-quality asset? If the asset merger transaction fails to pass the review of the China Securities Regulatory Commission, the outside world will probably become even more determined that Jia is undoubtedly a lost cause, and then the second and third "Xie Jingxing" will jump out.

"Let's prepare some funds to protect the market. In case of any unexpected changes in the stock price, we won't be caught off guard." Liu Hong tried again.

Basically all listed companies will prepare a sum of money. When their own stock prices fall, they will either directly issue an announcement to repurchase stocks, or use affiliated companies to pretend to be ordinary investors and buy stocks to stabilize the trend.

This is a routine operation and reasonable, but LeTV has not reserved this part of funds for a long time.

Jia Yueting frowned slightly: "You discuss with Zhao Kai how much money is needed, and I will lend it to the company personally."

"Eliminate bad news, release good news, and stabilize stock prices. These are roughly the three directions for response for now." Liu Hong's implication became more and more obvious.

Boss Jia cashed out billions of funds, claiming that he had lent the company interest-free for a long period of time, but never kept them on the company's books for more than a month. Every time, he transferred the funds to the company before they were due to turn over various loan debts, and then withdrew them immediately after the transaction was completed.

There is no such thing as guarding against thieves for a thousand days. Only by completely dealing with Xie Jingxing and making him stop targeting LeTV can we achieve long-term stability.

Jia Yueting couldn't give an answer. If he could really make Xie Jingxing shut up, why would he make more preparations?
At this point, people on the same boat are feeding each other placebos that they know are useless, and they will talk about the future after they get through the current crisis.

"As long as we have the people's hearts, we will be invincible." Jia Yueting seemed to be convincing himself.

Liu Hong sighed inwardly: "If there is nothing else, let's do this first. I will contact Director Chen?"

"Go ahead and do your work. I need to go outside as well." Jia Yueting tilted his head to look out the window at the night scene and the lonely and dim starlight in the sky.

"By the way, do you want to reconsider the project of building a car manufacturing plant in the United States?"

"Carry out the original plan."

"There will be a new employee orientation on Monday. Can you come out and say a few words?"

Liu Hong didn't get a response in the end and left with mixed feelings.

Jia Yueting withdrew his gaze from the night sky and cast it towards the corner of his desk. He picked up the thin booklet, shook off the dust and opened the first page.

[Master yourself, run blindly, and you will become the brightest star. ]

This is a letter he wrote to all employees, recorded in the "LeTV Employee Handbook".

Jia Yueting closed the booklet and closed his eyes. "Running blindly" is LeEco's corporate culture and also a reflection of his life.

From a village at the foot of Luliang Mountain in Shanxi, I ran to a university, to a county town, to Taiyuan, and to the capital.

This journey has been going on for 40 years without stopping, what can Xie Jingxing do?
Yes, LeEco has tens of billions of debts and has been in a state of borrowing from Peter to pay Paul for a long time, and its capital chain may break at any time. But if it builds cars and matures the ecosystem of TVs, mobile phones and smart terminals, it will be profitable sooner or later!

So many companies have inflated their financials. Without profits, they cannot issue new shares for financing. Without new shares for financing, they cannot operate their businesses and continue to burn money to compete for market share. Without market share, they can never make a profit.

I have to be responsible to hundreds of thousands of investors. I am helping investors make money and I have a clear conscience!

Jia Yueting said this to himself in his heart, suddenly opened his eyes, clenched his fist and picked up the landline microphone: "Arrange your schedule, I have to speak at the employee training on Monday."

"The speech focuses on the two major sectors: the car manufacturing plan and the mobile phone business." He hung up the phone with a red face full of excitement.

The company issued 10 billion bonds last month, and on the 23rd of this month, three days ago, it issued another 9.3 million bonds.

The car manufacturing plan remains unchanged, and the mobile phone business continues to burn money. The more we are short of money, the more we cannot live frugally. We need to give the market confidence so that we can sell the bonds, and then continue to burn the money raised from the sales.

The more Jia Yueting thought about it, the more convinced he became: I did not lend the cash-out funds to LeTV for a long period of time as promised, because LeTV does not need the money at all now.

In the next five years, if LeTV needs money at any time, I can borrow money from it at any time. It is also a long-term loan, and the funds can be used flexibly and efficiently.

Besides, lending money to LeEco was my personal promise and it does not involve any regulatory clauses. Why do you, Xie Jingxing, keep nitpicking and holding me back?

Bonds, options, loans, as long as I have the ability to raise money for LeTV from various channels, who can say anything to me?
(End of this chapter)