Chapter 212: Acquiring Hudson Shipping, Nyse Red Vest Experience
“Anything else?” Indiana couldn’t think of what else needed to be added to such a perfect plan.
He was already certain that this matter had a very high success rate.
“My casino company also needs to list through this listed company.” Fang Wen did not explain the details of the asset restructuring plan; this matter had to be done last, and now was not the time to talk about it.
Indiana didn’t think too much about it. “Oh, what do you want me to do?”
“Not needed for now, but it will likely use you during the process. We need a contact method.”
“This is my office telephone.” Indiana wrote his office telephone number on the memo pad in the guest room.
Fang Wen tore off the memo pad paper with the telephone number, pocketed it, saw Indiana to the door, and ended the conversation.
After Indiana left, Fang Wen waited for the next visitor to arrive.
At 6 p.m., there was a knock on the door.
Fang Wen got up to open the door.
It was Zhao Jiu and Al Capone, who had flown in from the West Coast of the United States.
“General Manager, we’re here.” Zhao Jiu said excitedly. Fang Wen’s arrival gave him full confidence, and he had many things he wanted to say.
“Fang, glad to see you again.” Al Capone extended his hand.
After shaking hands with Al Capone, Fang Wen stepped aside to let the two enter the room.
Inside the room, he got straight to the point.
“I will use Taishan Casino Company’s funds to acquire Hudson Shipping Company, and there will also be 10 overseas enterprise accounts joining in the acquisition. To ensure this acquisition doesn’t attract attention, many individual investors need to participate. Al Capone, have you arranged it?”
“Done, all local New Yorkers.” Al Capone replied.
Zhao Jiu placed two suitcases on the table and opened them; they were filled with large amounts of US Dollars.
“This money is the remaining business profit from Taishan Casino Company over one year, kept in the bank. Now I’ve withdrawn it all—2 million US Dollars in total.”
2 million US Dollars was no small sum; even after devaluing 40%, its purchasing power was still astonishing.
This sum of money would become important seed capital for this acquisition plan.
Immediately, Fang Wen instructed Al Capone to take 50,000 US Dollars and inject it into those individual investment accounts respectively, awaiting unified acquisition orders.
He also instructed Zhao Jiu to follow him in the coming time.
One night passed. Fang Wen got up, freshened up, and then dialed the number.
“I’ll come over this morning.”
After the call, he went out, roused Zhao Jiu, and left the hotel.
Two Chinese people walked the streets of a foreign land; Zhao Jiu had many things he couldn’t wait to say.
“General Manager, it’s simpler to navigate the Jianghu here than in Shanghai.”
“Is that so? Tell me.” Fang Wen bought two hot dogs roadside and gave one to Zhao Jiu.
While eating the hot dog, Zhao Jiu said, “Here, almost everyone believes in religion, yet they are extremely self-centered. Relationships are superficial; only interests are core. Compared to Shanghai, there’s less scheming and infighting, making things easier, but more conflicts and trade-offs.”
Zhao Jiu spoke freely about his experience as a good mister in Las Vegas, emphasizing impartiality and fairness without taking sides.
This approach instead won recognition from all sides. Later, even conflicts not involving Taishan Casino would have him mediate.
“Really? You’ve pulled off this move in a year!” Fang Wen was surprised.
Zhao Jiu ate the last bit of hot dog and smiled back, “General Manager, did you forget? You told me back then: we’re outsiders with no roots or foundation. To stay stable long-term, we must be fair and just. I did exactly as you said, and who knew they’d all buy into it. Now I have Jianghu status on Las Vegas turf.”
Unexpectedly, Zhao Jiu had this encounter. Fang Wen secretly sighed at fate.
The two hailed a taxi roadside and headed to Beresford Apartments on Seventh Avenue.
（Beresford Apartments in 1932, alternative perspective.）
Fang Wen and Zhao Jiu took the elevator to the 18th floor of Beresford Apartments.
This was once the luxury apartment Graham lived in during his heyday, but after investment failures in the Great Depression, he had to move out.
Now he had moved back.
But not renting alone—with Fisher.
The two investment studios each occupied half the space.
At this time, the luxury apartment door was open, and three investment experts welcomed Fang Wen, their financial backer, at the door.
After entering the room, the first thing was a performance report.
Investment experts with two different philosophies both achieved substantial profits over this year.
They had bought low on stocks of Coca-Cola, Colgate, Gillette razors, P&G, General Motors, Sears department store, John Deere, Reynolds American Tobacco, IBM, General Electric, and others.
These stocks had all plummeted during the Great Depression, some dropping over 90% in stock price.
Thanks to successful bottom fishing, plus the sudden sharp devaluation of the US Dollar, stock market values soared, boosting both sides’ account profits.
Listening to the good news from both sides, Fang Wen nodded.
“I’ll add 500,000 US Dollars investment to each. Now let’s discuss Hudson Shipping Company.”
This matter was assigned to both studios to handle simultaneously, with frequent telegram communication, showing Fang Wen’s emphasis on it.
Thus, the two treated it very seriously.
Graham stated their progress.
“We fully investigated Hudson Shipping Company. Ten years ago, it was a leader in the ocean shipping industry and successfully listed on the NYSE. However, in recent years, due to a series of internal and external shocks—especially decision errors before the gold purchase act—it fell into severe financial problems. At that time, Hudson Shipping management misjudged and held large US Dollar assets expecting major market fluctuations to profit from exchange rate changes. But then the government launched the gold purchase act, strictly restricting gold and foreign exchange holdings and trading, while US Dollar assets sharply devalued, causing the company huge exchange losses.”
Fisher added: “These losses directly hit Hudson Shipping’s balance sheet, leaving it debt-ridden and unable to repay. Its stock price plummeted to 1 cent. Now facing delisting risk, investor confidence is shattered, and business operations greatly affected.”
Fang Wen nodded but didn’t reveal the true acquisition purpose, instead offering a grander view.
“The ocean shipping industry is a long-term positive field. With global trade recovery and growth, demand will keep expanding. I am bullish on United States productivity; the future will need many ocean cargo ships to transport United States products. Hudson Shipping has brand influence and market share in the industry. Once financial problems are solved and market trust regained, its recovery potential is huge. Given the current extremely low stock price, this is a prime low-cost market entry opportunity.”
Graham asked: “What about the debt problem?”
The biggest trouble in this matter was debt—7 million US Dollars total, enough to crush this shipping company. That’s why, including the major shareholder, no one was optimistic, preferring to sell stocks at 1 cent and escape the quagmire.
Fang Wen had a countermeasure, but company control must be secured first to reveal it.
Thus, he skipped the issue and jumped to acquisition.
Graham explained the acquisition situation.
“The exchange issued new regulations this year. Per the 《1934 Securities Exchange Act》, when a company plans to acquire over 5% equity in another listed company, it must submit materials to the United States Securities and Exchange Commission and fulfill disclosure obligations. This ensures market participants timely learn of major equity changes for rational investment decisions.”
“Need to submit materials? Can you two handle it?” Fang Wen asked.
“No problem.” Graham replied.
He continued:
“The acquirer must disclose to the target company and its shareholders key info like acquisition intent, funding sources, acquisition plan, etc. For non-public market acquisitions of major shareholder shares, it must announce to all public shareholders.”
This was all within Fang Wen’s expectations. He stated his plan: “I have a United States company under my name: Taishan Casino Company. Acquire in its name; you two handle operations, prepare to acquire all shares of Hudson’s major shareholder. Meanwhile, 10 branch companies under Taishan Airlines global general company will launch coordinated tender offers. Post-acquisition, Taishan Casino Company will be Hudson’s controlling shareholder.”
Graham and Fisher gladly accepted this acquisition action.
They negotiated with Hudson Shipping Company, headquartered in New York.
Once-glorious Hudson Shipping Company, insolvent, had sold its operations building and massively cut staff. Graham and Fisher’s acquisition negotiations were held at the major shareholder’s own industry premises.
This showed how dire it was; they couldn’t even cover it up.
To shed this burden, Hudson Shipping Company’s major shareholder agreed to sell 38% shares for 1 US Dollar.
The only request: properly handle all debts and keep the remaining two cargo ships running.
Such simple requests and 1 US Dollar equity price made negotiations smooth.
Afterward, Taishan Casino Company submitted a detailed acquisition report to the United States Securities and Exchange Commission （SEC）.
The report covered.
Acquisition purpose: Continue development in the maritime industry while advancing into others.
Acquisition main body: Taishan Casino Company, and 10 global branch companies under parent company Taishan Airlines International, as concerted parties.
Funding sources: Self-owned.
Acquisition plan: Plan to acquire 67% share of Hudson Company stocks.
After submission, with no issues, the acquisition report was quickly approved, followed by announcement on the NYSE.
July 3, 1934, Tuesday.
An acquisition announcement was posted on the pre-market bulletin board inside the New York Stock Exchange.
Traders from various brokerage firms watched the bulletin board.
“Taishan Casino Company （Taishan Casino Company） has reached an acquisition agreement with Hudson Shipping Company major shareholder, acquiring its 38% equity for 1 US Dollar, and together with concerted parties will acquire the remaining 23% equity for absolute control.”
Most traders were not optimistic about Hudson Shipping Company, but that didn’t stop them from sharing this profitable trading info with clients.
Through their spread, all of New York knew Hudson Shipping Company stock price would fluctuate sharply today.
Fang Wen, as Taishan Casino Company’s actual controller, donned a red vest with Graham and Fisher and entered the New York Stock Exchange.
They sat at the brokerage firm seats, facing a huge trading platform.
Fisher talked with brokerage firm people; Graham introduced the New York Stock Exchange interior to Fang Wen.
“People here identify by attire and badges. Yellow vests are exchange staff; during work, they enter trading posts to handle traders’ various transaction requests. Red vests are brokerage firm and financial company employees; what we’re wearing now is their uniform.”
Fang Wen looked; inside, people were leisurely, sipping coffee, chatting and greeting each other.
But as trading open neared, everyone grew serious.
The opening bell rang; all took positions, starting the day’s trading work.
Fang Wen’s gaze turned to one trading post—a circular enclosed trading post with quotation boards, where Hudson Shipping Company stock would be quoted on one.
The quotation board showed Hudson Shipping sell price at minimum 1 cent, but no buy price filled.
A red vest ran over; after exchange, the yellow vest updated the buy price on the board.
Total shares 100,000; Hudson Shipping Company stock at 1 cent opening price soared to 2 cents.
Fisher said: “Not our quote; other investors via brokerage firms are snapping up stock. Act?”
Fang Wen looked elsewhere; Al Capone, in yellow vest, sat at another brokerage firm seat.
From Al Capone’s body language, Fang Wen knew he made the first quote.
In the following trading time, Fang Wen made no moves.
He wanted Al Capone to grab some first; beyond 67% absolute control equity, whatever bought was profit.
The exchange atmosphere turned peculiar.
Red vests watched Taishan Casino Company represented by Fang Wen; without main player’s move, they wouldn’t enter.
Thus, stock price from 1 cent to 4 cents was supported only by Al Capone and scattered quotes.
Then Al Capone stopped and left.
Without him, bidders for Hudson Shipping Company stock dwindled.
Some who bought and profited that day quickly sold to take profits.
Stock price dropped from 4 cents to 2 cents.
Then Fang Wen spoke: “Buy; today’s quote cap 10 cents.”
Graham and Fisher, receiving orders, began operations.
As quotes rose, brokers phoned investors; more sold holdings.
Full day trading, stock price from 1 cent to 10 cents; acquired 5% shares.
Plus Al Capone’s prior 11% and Taishan Casino Company’s 38%, 46% shares remained in market.
These were trapped during declines, sellable only on rises.
Next day, price to 30 cents; 10% shareholders sold.
Third day, to 50 cents; 10% sold.
Remaining 21% held, hoping for more rises.
But then price rise stalled.
Recalculating, Taishan Casino Company held 63% over three days, just 4% from 67% in announcement.
Immediately, aware shareholders sold; price from 50 cents to 45 cents, then no takers, down to 40 cents.
Then Taishan Casino Company bought the remaining 4% shares.
With Taishan Casino Company acquisition ended, price slid sharply.
In this market, no one thought Hudson Shipping Company could turn around soon; they preferred to exit timely.
Taishan Casino Company and 10 overseas concerted parties’ acquisition action concluded.
Holding 67% shares total.
Plus 15% via Al Capone, actually controlling 83% total shares.
No more share purchases; Fang Wen prepared next plan.
Staff on the two cargo ships all replaced with Chinese sailors, starting silver transport.
Taishan Casino Company’s overall listing must be realized soon.
And resolve Hudson Shipping’s debt problem.
