Chapter 394: What Is Professional? This Is Professional!
You were originally walking a tightrope between the two sides in a tug-of-war, trying to maintain balance, not wanting to be devoured by either side—one wanting your money, the other wanting you yourself.
The only good news is that these two sides have a blood feud and won’t cooperate, so a delicate balance can be achieved.
Now, this good news has been destroyed.
China and America actually cooperating on such a sensitive matter?
Chen Xiaoxian and Wu Jianzhong felt a chill after thinking it over.
“Exactly what you’re worried about—whether it’s just robbery or robbery and murder together.” Wu Jianzhong added.
Chen Xiaoxian asked: “If it’s robbery and murder, what are you going to do?”
Wu Jianzhong shook his head: “If it’s robbery and murder, what can we do? Of course, only surrender, hands and feet up in surrender.
If we lose America’s support, we have no room to resist, but fortunately this shouldn’t be possible.
At most it’s robbery.
The only good news.”
In any case, this middle-aged technocrat didn’t believe America would abandon them, thinking it was just during this term of the unconventional president, one unconventional action.
Just like how the other side closes deals globally, big T only recognizes money.
Good news changed from the two sides being impossible to cooperate in the past, to now both sides wanting to rob.
Over 15 billion US dollars in profit, Wu Jianzhong wondered how they would split it.
Chen Xiaoxian continued: “So our lives are completely in the Americans’ hands?”
Wu Jianzhong nodded seriously: “Exactly, our lives are in the Americans’ hands, this is a sorrow, but also a destiny we cannot escape.”
Rationally speaking, Wu Jianzhong was right, this is also the perception of 99% of local people.
But emotionally, Chen Xiaoxian felt it was completely unacceptable.
“Alright, relax, high probability it’s just robbery, robbery is easy to handle, they want money, give them money, want to short sell then short sell, the interests they can harvest from Taiwan Stock will only decrease, the harvestable interests have an upper limit, spending money to buy peace, why not?” Wu Jianzhong continued.
Chen Xiaoxian looked at his once high-spirited classmate, now like a gambler praying to the gods, praying for the opponent’s benevolence.
He couldn’t help but let out a cold laugh.
“Spending money to buy peace?” His voice wasn’t loud, trying to pierce the other’s illusion, the most illusory one, more accurately the fragile hope constructed by the entire bureaucratic system.
“Jianzhong, like me, you’ve also been on Wall Street, you should know very well that a jackal’s appetite has no upper limit, they won’t turn back into sheep just because they ate one full meal, not to mention the Morgan family aren’t jackals, they are the top carnivores on this Earth.”
After Chen Xiaoxian finished, he looked at Wu Jianzhong, the other was silent for a long time, just downed the sake in his glass.
After a while, he seemed to have sorted his thoughts, and with the calm tone unique to technocrats, trying to consider everything, slowly spoke.
“Xiaoxian, I know, I know everyone has been bleeding these four months, you’re on the front line, feeling it most directly, but.”
Wu Jianzhong deliberately slowed his speech rate, like convincing the other, more like convincing himself, “You need to look from a macro perspective, every economy has its resilience, Resilience, and we especially so.”
He stretched out his fingers, analyzing point by point: “Taiwan Stock falls below 20,000 points, to 18,000, many quality stocks’ price-to-earnings ratios have returned to very attractive ranges, our internal funds, the eight major banks’ market intervention orders, even some sharp-nosed retail investors and value investors, have started entering to take up positions, this will form a de facto valuation bottom.”
“Every downward attack by the shorts requires greater cost, while the potential profit space shrinks.
You get my meaning, when the expected return rate of short selling a stock is lower than the risk-free return of investing funds in other markets, capital will automatically flow away.
They are sharks, not philanthropists. No profit to be made, they will naturally leave.”
Wu Jianzhong looked at Chen Xiaoxian, his eyes carrying a confidence that only exists in theory: “So, yes, perhaps we are spending money to buy peace. But we’re not buying their benevolence, we’re using our strong foreign exchange reserves and national security fund’s silver bullets to fill the depression where they can profit, as long as the depression is filled, the cost of attack higher than profit, this financial war will naturally end, at most robbery, won’t reach murder.”
This was a textbook-perfect argument, Chen Xiaoxian thought, if this were in a Taiwan University classroom, I would applaud the other’s clear logic, perfect argument, but now it’s the trading front line, I fought out from the mill of flesh and blood, this theory seems so pale in the cruel financial world.
The real world may be even more cruel than the financial world.
“Jianzhong,” Chen Xiaoxian spoke, his voice unusually calm, “Your model is perfect, but it errs on one most fundamental assumption.”
“What assumption?” Wu Jianzhong asked.
“You assume their motive is purely robbery.” Chen Xiaoxian stared dead into the other’s eyes: “You’re right, if it’s just sharks coming for money, they’ll leave naturally when there’s no meat.
But what if it’s not sharks, but a group of marine biologists with dissection knives? Their purpose isn’t to eat meat, but to capture alive our whale, drag it back to the laboratory, dismember it, make it into a specimen?”
Wu Jianzhong’s brows instantly furrowed.
“They’re suppressing the stock price not for that 10% or 20% short selling profit!” Chen Xiaoxian’s voice unconsciously raised, “That’s retail investor play! They are Wall Street’s top predators! They spare no blood to beat a trillion market cap company like TSMC to 80% or 70%, to seize control of this company from shareholder structure, from inside, at cheaper cost!”
At that moment, the mobile phone in Chen Xiaoxian’s pocket issued the highest level risk alert.
He quickly opened it, that familiar Bloomberg terminal news title, like a judgment.
Chen Xiaoxian turned the phone screen to Wu Jianzhong.
“Activist Investor ‘Aethelred Capital'”
Wu Jianzhong felt unfamiliar with this name: “Aethelred Capital?”
“‘Activist investor’,” Chen Xiaoxian explained, feeling every word immensely heavy as he spoke, “Their strategy is the same in markets worldwide: buy low, become major shareholder, then force the board of directors to conduct strategy review, accelerate overseas factories, spin-off non-core businesses, replace management, until the company’s value is squeezed dry, they profit and exit.”
Chen Xiaoxian looked at Wu Jianzhong’s instantly pale face, and gave the final conclusion.
“Jianzhong, your valuation bottom theory exists.
But you didn’t calculate, for them, that bottom is not the signal to stop and leave, but the trumpet call to launch acquisition.
The Trojan Horse is already in the city.”
Wu Jianzhong leaned back in his chair, closed his eyes.
His defensive logic based on rational markets and limited profits was thoroughly shattered in the face of the cruel reality of robbery and murder.
The bald voice on television continued, like a ghost drilling into their ears:
“Think about it, is there such a coincidence in the world?
As soon as the other side applies pressure, America precisely hands you the knife, every knife chopping at TSMC!
What does this lead to? Leads to global capital starting to doubt our TSMC’s future.
This operation directly smashed Taiwan Stock from above 20,000 points to below 19,000!
Alright, then I ask our Financial Supervisory Commission, seeing this situation, don’t you find it strange? Shouldn’t you do something? Like, restrict malicious short selling?
Eh, the most exciting part is coming! Just as we’re internally discussing whether to take stabilizing measures, America’s Special Advisor for East Asian Affairs John Adams Morgan, just happens to bring Finance and Commerce personnel to visit us! Then tells you, you are the model of free markets, absolutely don’t do market intervention, or it will affect investor confidence!
This timing, isn’t it too coincidental?
Who is John Adams Morgan? No need to introduce Morgan, I believe the audience watching our program all know.
Let me introduce Adams, to avoid confusion, this is America’s true core family, their ancestors are America’s founding fathers, the second US President, his son became the sixth US President.
Descendant of Adams family and Morgan family marriage, they say give me some face okay? Do we dare refuse internally? One face rolls away at least ten billion US dollars from Taiwan Stock, that’s their face.
Meanwhile his son, I specially asked my reporter friend in America, John Adams Morgan’s son is Young John Morgan, the one recently hot with China’s Professor Lin Ran, hailed as the next Musk space maniac.
Why could he cozy up to China and produce a result? Because his son long ago has close business with China, core interests tied together.
Let me tell you, I don’t know if they privately agreed, if there’s a script.
But string these things together: the other side responsible for creating geopolitical waves; Wall Street responsible for using the wave to launch financial attacks to make money; White House steps in to tie your hands and feet, not letting you save!
These three roles, cooperating seamlessly!
So do you get it now? What we’re facing now is fundamentally not some pure economic problem.
You’re on a chessboard of great power game, the two sides, one Yanjing, one Washington, they may be in competition on many things.
But on how to handle our problem, they seem to have found a common point.
Washington wants TSMC’s supply chain, to de-risk; Mainland wants to strike our economic foundation.
Eh, these two goals, at this time point, surprisingly not conflicting!
So bluntly, they treat you as prey in a hunt!
Just one drives, one shoots.
Just we’re still foolishly thinking the shooter hunter is your bodyguard!
If you still don’t see this reality, still there ****, still thinking America will support you unconditionally, let me tell you, when your stock market left with only 10,000 points, TSMC’s factories all moved to Arizona, you’ll be crying without tears.
It’s that simple.
Alright, now let’s talk next topic, as mentioned earlier, Apollo Technology founded by Professor Lin Ran, will conduct the first Moon electromagnetic rail spacecraft launch in August two months from now, let’s properly discuss the significance of this.”
“Morgan, I have to say, your methods are indeed efficient.” Lin Ran said: “Aethelred Capital like a catfish, stirring TSMC’s board of directors upside down, next step, isn’t it time to discuss the specific timetable for acquisition and transfer?”
As an observer, Lin Ran felt the Americans’ operation was like butchering an ox, an art.
Every beat so perfectly timed.
From start, to research report then rating report, finally Morgan personally parachuting into Taipei was a stroke of genius, giving Yanjing perfect accusation opportunity.
Old John Morgan smiled, he didn’t look at Lin Ran, but at the night view outside the window.
“Professor, don’t be anxious.” He turned around leisurely, “The most exciting part of hunting isn’t the last shot, but enjoying the chase process, isn’t it?”
“We focus more on results.” Lin Ran said.
He couldn’t wait to see TSMC done for now.
Anyway TSMC won’t fall into China’s hands no matter what.
“Of course, we do too.” John Morgan walked to the water dispenser, poured himself a glass of water, he was already very familiar coming to Lin Ran’s office.
Perhaps because of the 1960s connection, Lin Ran was very tolerant to this old acquaintance.
“But direct acquisition? Professor, you think too simply. TSMC’s market cap even after evaporating 20% under our first quarter ‘help’, still a colossus over 400 billion US dollars.
Swallow in one bite? Would choke.
Not to mention, 4v’s official funds, together hold over 10% shares. Any public acquisition offer would be fought to the death by them with all administrative power on security threat grounds.”
“So what do you mean?”
Morgan’s eyes flickered with near cruel excitement, the stress reaction of a dandy finally finding something to do after too long:
“So, next two years, our theme isn’t ‘acquisition’, but ‘dismember’ and ‘drain’. This is finer work.”
He held up two fingers.
“First is technology gutting.
We now have a new tool: Aethelred Capital.
They are the catfish in the board of directors, also our timed bomb placed in TSMC’s heart.
We will through them, in name of maximizing shareholder value and global supply chain security, continuously propose at the board of directors, requiring TSMC to conduct deeper technology cooperation, production capacity backup licensing, and engineer exchange plans with Korea’s Samsung and Japan’s Rapidus.
Every time news comes out like TSMC licensing part of 2 nanometer production capacity yield rate control technology to Rapidus, or Samsung obtaining TSMC’s some advanced packaging technology license, guess what happens?” Morgan looked at Lin Ran.
“TSMC’s stock price will plummet due to decline in its uniqueness and irreplaceability.” Lin Ran said.
“Completely correct!” Morgan nodded, “Then, we short sell.
When stock price falls to the bottom, what will their official funds do? They will rush into the market like heroes, fight to death to defend, even release some good news of smooth company operations, stock price will rebound, and then?”
“You will short sell again from that rebound high point.” Lin Ran didn’t answer, Morgan answered himself.
Morgan laughed very happily: “It’s like a patient, we draw his blood on one side, transfuse a bit glucose on the other, ensure he doesn’t die too fast.
This way we can repeatedly draw blood. Every bad news of technology transfer is our short selling opportunity; every opponent market rescue is our next short selling perfect entry point.
We will go back and forth, harvest their wealth over and over.”
“How long will this process last?” Lin Ran asked.
“Mr. President’s term to January 2029.
Professor, we have a full three years to execute this technology gutting and wealth harvesting plan.
Why be anxious? Their foreign exchange reserves are very strong, enough for us to play a long time.”
He put down the glass, made the final summary.
“By 2027, or 2028, when TSMC’s most advanced technology and talent have been mostly backed up and replicated by us.
When Samsung and Rapidus’s high-end production capacity has no essential difference from his, when its sacred mountain halo has been stripped clean by repeated technology cooperations, when its stock price under our repeated harvesting, by then, it is meat we can easily eat.
We will unite top PE like Blackstone, Carlyle, can also include your foundation, form an acquisition conglomerate it cannot refuse.
We will launch a public acquisition offer with 30% premium.
For those minor shareholders already tormented by us for three years, this is an irresistible relief proposal.
And the other side authorities, by then their foreign exchange reserves and official funds long consumed in repeated defenses, what will they use to resist?”
He turned his head, gaze sharp, staring straight at Lin Ran, not at all like an eighty-something year old.
“That is the final blow, Professor.
Clean, legal, even in Wall Street’s view, a brilliant, textbook value investment.”
