The interviews with the three news media outlets this time were quite formal.
Not only would they be reported in print, but the video interviews would also be posted on their web versions.
Before the interview, with Guan Yifeng's cooperation, Chen Pingjiang slightly tidied his appearance.
A dedicated makeup artist even applied some light makeup to Chen Pingjiang to make him look more energetic.
At the same time, reporters from the China Securities Journal, The Wall Street Journal, and Bloomberg News were meticulously going through their questions.
In advance, Guan Yifeng had already reviewed the questions with the reporters from these three media outlets, only approving those that were permissible.
Being under the bright lights on his face was still a bit uncomfortable, and Chen Pingjiang took quite a while to adjust.
He appeared calm, confident, and full of conviction.
The order of questioning followed the seating arrangement of the three reporters, from left to right, one question per person.
China Securities Journal:
"Mr. Chen, we are very pleased to interview you at such a critical and sensitive time."
Chen Pingjiang smiled gracefully:
"It's precisely because I also need you to convey confidence and attitude to the outside world."
China Securities Journal:
"Shall we officially begin then?"
Chen Pingjiang nodded.
China Securities Journal:
"How do you view the accusations made against Renren Inc. in Muddy Waters' 47-page investigative report published yesterday?"
Chen Pingjiang said:
"Muddy Waters used to be a very 'accurate' company and indeed helped the market create value by exposing some non-compliant companies, effectively protecting the interests of shareholders. But I think their recent reports and actions have been very dishonest, causing many Chinese concept stocks to be wronged overseas, their reputations damaged, and their stock prices discounted. It also caused American investors' confidence in Chinese stocks and companies to decline, which is a very bad thing for China's high-tech companies."
"Take the accusation against Renren Inc. for example, I suspect they hired interns who just graduated from university to do it. Sorry, I have never seen such a low-quality research report. It is full of misleading information, vagueness, and innuendo, without a single piece of concrete evidence."
"What's even more ridiculous is that they use the stock price bubble as an excuse to attack Renren Inc.'s excessive market capitalization. You should know that Renren Inc. is China's largest social and gaming company. Our users are spread across the country, and with the advent of the intelligent era, our users are still growing rapidly."
The three reporters were all taken aback, not expecting Chen Pingjiang to be so aggressive, directly questioning Muddy Waters' professionalism, which is a fatal accusation for a research institution.
For a short-selling firm like this, if you are short-selling just for the sake of it, and can't provide any substantial content, investors and shareholders are not fools; why would they still trust you?
What surprised them even more was that short-selling firms like Muddy Waters and Citron Research had shorted Chinese concept stocks more than once, and their previous opponents either simply lay flat or begged for mercy.
There was no one as aggressive as Chen Pingjiang, who directly went for their weak points.
The entire response did not start from the report itself but implied Muddy Waters' unprofessionalism.
Now, the three reporters were somewhat excited, sensing that there would be sensational news today.
The Wall Street Journal:
"Mr. Chen, you just mentioned that Muddy Waters' previous reports targeting Chinese concept stock companies were accurate. So how can you claim that their report this time is erroneous? Is it simply because you are the party being attacked this time? You know, my point is that your claims as the party involved against Muddy Waters seem to raise questions about impartiality."
Chen Pingjiang smiled.
This question indeed had the style of The Wall Street Journal; like calls to like.
Chen Pingjiang said:
"Your question just now contained several questions. For the first question, I can answer you: Muddy Waters' previous accurate reports on Chinese concept stocks and its fabricated investigative report on Renren Inc. this time are two separate matters."
"The past does not represent the present."
"I used to be a bad person, but now I just want to be a good person. Can you deny the present because of the past? Obviously not."
"For the second question, precisely because I am the party involved, I know clearly that my company has not falsified data on monthly active users for games, nor do we have any motive to do so. By the way, we have already reached the industry ceiling for both LOL and DNF. Our only opponent is ourselves; no other opponent can challenge us. So, is 5 million or 7 million monthly active users important? Not at all. Moreover, profit margins can reflect everything."
"Regarding the last question about impartiality, this is easily resolved. We are establishing a professional third-party investigation team to verify whether the data is fraudulent. All executives, including myself, will submit their personal computers to the third-party investigation team."
It was the Bloomberg News reporter's turn to ask:
"Mr. Chen, I'd like to ask, how will you and Renren Inc. face this crisis? Yesterday alone, your stock price plummeted by ten percent, wiping out tens of billions of dollars in market value, and this situation is likely to continue today."
Chen Pingjiang smiled:
"Believe me, this time I will make Carson Block realize that he has picked a terrible opponent. I will make him realize how foolish and reckless his actions are. It's evening in the US now. Tomorrow morning, my legal team in the US will go to court to file a defamation lawsuit against Carson Block, as well as sue him for stock price manipulation."
The Bloomberg News reporter was stunned for a moment, then his eyes lit up:
"Are you saying Muddy Waters colluded with other institutions behind the scenes to short the stock?"
Chen Pingjiang nodded:
"You said that, not me. But I am very confident in my judgment. Muddy Waters hasn't made less money in its previous short-selling activities. Everyone is well aware of the short-selling industry chain in the US."
The Wall Street Journal:
"Mr. Chen, as far as I know, no other Chinese companies that have been shorted have used legal means to defend their rights. Why are you choosing this approach?"
Chen Pingjiang said:
"This is a common shortcoming of our domestic enterprises, stemming from their lack of understanding of US legal procedures. Lawsuits can achieve several effects. We hope to pursue compensation to the end, making them fear doing this again. Even if we win without compensation, it will still harm their reputation and cause the public to question them. For shell companies like Muddy Waters, if they are sued every time they short a stock, do they have the time and money to bother with me?"
"Both Muddy Waters and Citron Research, these types of companies take advantage of this point. Whatever they say, American investors believe it, and Chinese companies get beaten without fighting back, directly kneeling down, which is why they are so unrestrained."
The Wall Street Journal reporter couldn't help but ask again:
"But Mr. Chen, such a lawsuit could cost millions of dollars."
Chen Pingjiang raised an eyebrow, with an expression that seemed to say, "Are you looking down on me?":
"If it's only a few million dollars, that's cheap enough for me to sue them for a lifetime."
The China Securities Journal reporter pursed her lips and smiled upon hearing this:
"Mr. Chen, can you elaborate on the methods you will use to fight back?"
Chen Pingjiang said:
"I have too many treasures in my toolbox; any one I pull out is a big one. For example, I can apply for a temporary trading halt, directly report them to the SEC, and call the police, there are too many options. But I won't tell you the specifics."
The entire interview lasted for an hour.
By the end, the discussion had shifted to other topics.
Everyone could see that Chen Pingjiang was different from other corporate executives they had interviewed in the past.
This one truly had full confidence and remained unperturbed.
As Chen Pingjiang said, domestic enterprises, when facing malicious short-selling by short-selling institutions, are practically like obedient babies, not fighting back or cursing.
What consequences does this lead to?
Others think you're easy to bully; since you don't dare to fight back anyway, why wouldn't they go all out against you?
Another consequence is that if you don't react and lack confidence when attacked, it will only make outsiders believe that you truly have problems, leading to the spread of panic.
Of course, this is also related to the quality of Chinese companies listed on US stocks themselves.
Because these people were used to faking things, they thought the US stock market was like A-shares, and they applied that same set of practices to the Americans.
As a result, the Americans had anti-fraud fighters, and then they got taken down.
The anti-fraud fighters saw that so many Chinese companies were involved in financial and data fraud, so they specifically targeted Chinese companies, knowing they had many fake goods.
It's no exaggeration to say that in earlier years, cases of financial fraud by Chinese companies listed in the US were more numerous than those from other countries.
Otherwise, why would A-shares always hover around 3000 points and fail to rise?
Who would dare to play? Shareholders want to make some money in the stock market, but others want to sell the company to you to cash out and run, treating shareholders as leeks to be harvested.
The company ST Meishang was suspected of fraudulent practices three years before its listing and successfully entered the capital market, followed by ten consecutive years of financial fraud.
The major shareholders unscrupulously cashed out up to 4.5 billion yuan in illegal transactions.
Its stock price reached a maximum of 153 yuan, but now it is only 0.18 yuan, and they even brazenly claimed, "We just listed through fraud..."
Tell me, isn't that outrageous?
ST Meishang's fraudulent methods were astonishingly diverse, such as phantom accounting entries, fabricating original vouchers, and fictitious bank interest income, an endless array of tricks, truly pushing financial fraud to the extreme.
On the day ST Meishang was delisted, there were still 21,300 shareholders deeply trapped.
Therefore, Chen Pingjiang felt that China should actually have short-selling institutions like Muddy Waters to act as a touchstone.
True gold fears no fire!
Garbage companies should be delisted early.
But similarly, such short-selling institutions can indeed be tempted by capital interests and wrongly accuse good companies.
...
8 AM Eastern Time.
Carson Block, the boss of Muddy Waters Research, arrived at a small office on Wall Street.
The office was called small because it could only accommodate eight people.
Don't think Muddy Waters is small because of this; after all, companies like Citron Research sometimes only have one person, so calling them a one-man band wouldn't be an exaggeration.
Speak of the devil and he shall appear. Not long after, Andrew Left also arrived.
Now, the founders of both Muddy Waters and Citron Research were present.
Andrew Left was also a well-known bounty hunter on Wall Street.
He just had quite a few blemishes on his record.
In 1998, Left worked at a futures company and was banned from practicing for three years by the National Futures Association for "publishing false and misleading information to deceive or defraud clients."
He was also ordered to take ethics training courses, etc. The penalty report, numbered 0253075 and effective on March 2, 1998, is still posted on the National Futures Association's website today.
Left was hired as President and CEO of Detour Media in 1999. But in February 2002, the company sued him for stealing six checks totaling approximately $25,000.
In official documents filed by Detour Media with the SEC, it was stated that Left was involved in legal actions related to "forgery and fraud, negligent misrepresentation, breach of fiduciary duty, and illegal currency transactions," culminating in a final judgment ordering Left to pay $26,500.
Of course, Andrew Left's track record was also famous.
In June 2012, he shorted Evergrande Real Estate, causing its market value to evaporate by 8 billion Hong Kong dollars overnight. Before that, he also shorted Longtop Financial Technologies, Chijin Biotech, and 360.
"Bullshit! Are our dear Chinese friends so powerful? He's already on an American financial program after just one day."
Carson Block shrieked, quickly dropped his coffee, and walked to the TV.
On the TV was Bloomberg News's morning financial program "Bloomberg Markets."
Andrew Left also moved closer upon hearing this.
On the screen, Chen Pingjiang, impeccably dressed and full of confidence, spoke eloquently.
"Sorry, I have never seen such a low-quality research report..."
Hearing this, Carson Block's face darkened, and he said bitterly:
"He actually said my report was nonsensical?"
Andrew patted his shoulder:
"Buddy, I told you long ago, Mr. Chen is no ordinary person; you've really kicked a big rock by provoking him."
Carson glared at him testily:
"You think if you hide in the dark, people won't find you? Didn't he mention your name in the interview anyway?"
Andrew shrugged indifferently:
"Anyway, it wasn't my report that was published."
Carson continue glared at him:
"This guy is indeed a bit tough to deal with. He even wants to sue me? Hey, why is he different from those Chinese companies we shorted together? Without exception, all those companies surrendered on the spot. I didn't expect to encounter someone who dared to fight back this time."
Andrew smiled:
"I investigated yesterday and found that this guy has had operations in the US for a long time."
"Of course I know that, I made the report. LOL is their wholly-owned subsidiary, so what's so strange about them having operations in the US?" Carson added.
"NONONO. You're only talking about Renren Inc.'s business. As far as I know, Mr. Chen has an investment company in the US that holds shares and stocks in many companies. In addition, he has a game studio in North America and a deep relationship with Facebook."
Carson spread his hands and sneered:
"So what? Whether it's suing me or frequently appearing in news media to speak out, it's all just buying time. Unfortunately, capital is cruel, and he cannot escape from the jaws of so many capital predators."
Undoubtedly, his previous excellent track record had made Muddy Waters' boss, Carson, incredibly confident.
Although he felt that Renren Inc. would be a bit tougher to deal with than other Chinese companies, that was all.
After all, this was the US, their home turf.
9:30 AM Eastern Time, the market officially opened.
Carson let out another shriek:
"Damn it, why did Renren Inc. open higher?"
On the computer screen, Renren Inc.'s stock price showed $153.64, a slight increase from yesterday's closing price of $153.07.
Andrew also frowned. Although he occasionally bickered with the veteran Carson, he also participated in the encirclement of Renren Inc. this time.
Of course, these two were just making a little money; the real capital predators were various hedge funds, asset management companies, and funds.
"Undoubtedly, Mr. Chen's global investor conference call yesterday and interviews with various media gave shareholders confidence. However, I don't think this will last long, buddy. What other reports do you have on hand? Let's release them today and crash his stock price."
Carson shook his head:
"The reports I have aren't very impactful. Now, all we can do is cultivate pessimistic market sentiment. I need to discuss this with the giants behind us, for everyone to contribute money and effort."
Andrew also pondered for a moment before saying:
"I'll contact a few analyst friends and media friends to have them all publish negative reports about Renren Inc."
"Quick! Renren Inc. is performing strongly during trading!"
Renren Inc. indeed performed strongly, surprising many.
Many people thought Renren Inc. would continue to plummet today, but unexpectedly, it not only stopped the momentum but also opened higher.
This made many shareholders who sold their stocks yesterday hammer their chests and stamp their feet, and also slowed down many who were planning to sell, deciding to observe further.
However, a large bearish candlestick soon crashed down, instantly stunning those shareholders who were planning to observe further.
Renren Inc.'s stock price flashed crashed again!
The stock price, which had slowly recovered to $155 from a slight oscillation, instantly dropped another three percent.
At this moment, Renren Inc.'s share price was $150.35.
Now, panic began to spread, and retail investors started selling off in large quantities!
At the same time, famous financial analyst Bob also stated on his personal Twitter that Renren Inc.'s stock price was overvalued and he was not optimistic about its future performance.
$149.6!
$148.24!
$145.15!
Mike Wilson, a well-known Wall Street bear and Morgan Stanley strategist, tweeted, expressing a long-term bearish view on Renren Inc. stock and downgrading its rating. It was changed directly from Hold to Sell.
Then...
Other Wall Street strategists' bearish sentiment also intensified, believing that Renren Inc.'s stock price would fall further.
...
Dongjiang.
Chen Pingjiang was in front of his computer.
In front of him were three screens: the US stock market, financial news, and a video call with Bu Housheng.
On the screen, Bu Housheng wore glasses and frowned, with his trading team beside him.
"Chairman Chen, the short sellers are currently giving us no breathing room. Not only are they spreading negative sentiment in the market, but they have also started to add positions, forcing a squeeze, and we have become the absolute main force."
What Chen Pingjiang faced now was that they had to act as the main force to absorb the selling.
If he didn't absorb the selling, with more sell orders than buy orders in the market, and the short force exceeding the long force, there would be no hope of rising, and a new round of decline would begin.
During a decline, if there are all sell orders and very few or no buy orders, investors find it very difficult to sell, especially when the individual stock hits its daily limit.
This situation would only continue until positive news was released, restoring investor confidence, or until the stock price hit rock bottom, allowing investors to buy at the dip.
Chen Pingjiang nodded,
"Continue accumulating shares, as many as possible. How much capital do you still have on hand?"
"Around 3 billion, but some stocks need to be released in batches. Currently, only 1.5 billion is available. Renren Inc.'s short position now accounts for 19.27% of its circulating shares."
Chen Pingjiang silently calculated. Including the disposable shares held by Sequoia, IDG, Temasek, and even the option pool, their current stake was 79.18%.
The circulating shares on the market accounted for 20.82% of the total share capital.
The short position then accounted for 19.27% of that 20.82%. The short side had invested approximately 4.619 billion US dollars!
Their own funds were far from enough to buy up all the shares!
Just then, Bu Housheng's anxious voice came from the other end of the screen: "Chairman Chen, I just received private information that David Einhorn has also entered the market."
Chen Pingjiang's heart sank. He hadn't expected this capital shark to also arrive, smelling blood.
Who was David Einhorn?
He was the founder of Greenlight Capital!
He had many labels — billionaire, hedge fund magnate, a leading handsome man on Wall Street, and a world-class poker player, ranking third in the 2012 World Series of Poker.
Amidst the symphony of slot machines in Sin City, Las Vegas, Einhorn's handsome face, which could make Hollywood actresses scream, would always appear.
Einhorn prided himself as a "long-short value investor." Most of his capital was actually used for long positions, but what truly made him famous on Wall Street was short-selling.
Classic cases included Lehman Brothers, Green Mountain Coffee, Allied Capital, and Netflix.
He later compiled his glorious short-selling achievements into a book — "Fooling Some of the People All of the Time: A Long Short Story."
Greenlight Capital achieved a terrifying annualized return rate of 15.4% since 1996.
He once described the difference between himself and Buffett:
"If I were a baseball player, I wouldn't hit a home run every time, but as soon as I see the ball coming towards me, I would not hesitate to use all my strength to hit it out of the park."
Undoubtedly, Renren Inc. was the ball he believed was flying towards him, and now he intended to hit Renren Inc. out of the park.
Not far from Chen Pingjiang, Renren Inc. CEO Li Xi and Renren Inc. Board Secretary Gao Jie were present, but no one dared to disturb Chen Pingjiang's thoughts.
After a long time, Chen Pingjiang opened his closed eyes.
He waved to someone behind him:
"Gao Jie!"
"Here, Chairman!"
"Issue an announcement to the public."
"Yes, Chairman!"
November 9th, 11 AM Eastern Time.
Renren Inc. Group announced that its board of directors had approved a share repurchase program.
Under this plan, Renren Inc. would spend approximately $870 million to repurchase 5.14 million shares starting from November 11th, at a repurchase price of $168-$172.8 per share.
The entire process, managed by Goldman Sachs, would last six months and end on May 10, 2012.
Renren Inc. Group also stated that these funds were from the company's existing capital.
It also did not rule out the possibility that Renren Inc.'s board of directors would periodically evaluate this share repurchase program and potentially adjust the repurchase conditions and scale.
Upon this positive news released during trading.
Renren Inc.'s stock price immediately showed a large bullish candlestick.
Then it quickly recovered lost ground.
$148.37!
$151.92!
$153.46!
...
(End of Chapter)