Chapter 1088: Fall, fall, fall…

Chapter 1092 – Fall, fall, fall…

Afternoon, the boss of an investment company in Wall Street sat in his office and switch on the TV to watch the news.

Suddenly, the boss’s face changed and quickly grabbed his phone. “Dump all our Enron shares now! You all don’t need to care about the losses. Just dump everything! This is an order! If you cannot dump all our Enron shares within half an hour, you can pack your bags and get lost!”

Not only this boss. The bosses of many investment firms and brokerages ordered their men to dump Enron’s shares after seeing the news and reports on the news.

Those who had not been following the news were shocked. What is going on? Why is everyone dumping Enron’s shares? Enron had just announced high profits yesterday, and their share prices should be rising.

Someone guessed it might be a market adjustment.

The big players are dumping Enron shares, and this is the opportunity to get buy the shares.

So, when many people are dumping Enron shares, some companies start to buy in the shares. They are the ones who had not been following the news.

In the financial industry, it is not surprising for those who had not to keep themselves up to date with the news to lose money.

Enron immediately calls for an emergency board meeting. Not only all the directors are attending, even all the top management staff had to attend.

“Everyone, our share prices are falling like crazy. Can anyone tell me what we should do?” Enron’s Chairman asked.

“I think we should get someone to refute Feng’s claims through the media. He is not a professionally trained auditor, and what he said cannot be trusted!” Someone suggested.

“What about those two professors from Harvard? They are renowned experts in this field.”

“We can get them to amend their statements. I believe everyone has a price.” Other than this solution, this person could not think of anything better.

After watching the news today, this person had asked his broker to sell away all his Enron shares. Although dumping the shares now will result in heavy losses, his losses will be greater if he waits until tomorrow.

At this moment, the ones, who had not been following the news, found out that Enron is suspected of fabricating their financial reports online.

They immediately tried to sell away their Enron shares but found out no one is buying, and the share prices are tumbling.

The shares they are holding is now worthless!

Those brokerages and investment companies’ bosses, who had bought Enron shares in the afternoon, are crying. They thought they had gotten a good bargain, but it turns out to be a trap!

Now, the shares are to rot in their hands, and when the market opens tomorrow, the share prices will continue to fall.

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The ones who managed to dump Enron shares early were relieved. Although they had suffered heavy losses, it’s better than losing everything.

……

“Fall, fall, fall! Hahaha… Feng… You are amazing! Enron’s share prices had really started to plunge! Why is such a big company issuing so little shares? If not, we will be getting higher returns!” Kirilenko replied.

“This is considered good enough. You had told me that you want to invest in this company in the past.” Feng Yu rolled his eyes at Kirilenko. If Kirilenko had invested in Enron, he would have lost all his investments.

Yes… maybe the courts will order Citibank and other companies to make compensations. But the compensations will not be enough to cover the losses.

“I had fired that broker! He only knows how to follow the trend and nothing else. Why should I give him a high commission?” Kirilenko replied angrily. The brokers he hired are nowhere near Feng Yu’s staff!

This time, Feng Yu and Kirilenko had used short Enron shares through a brokerage, and they only had to pay minimum charges.

It’s a pity that Feng Yu and Kirilenko can only short a limited number of shares. Although the return is high in percentage, the actual profits are not a lot. But it is enough to cover the losses they got from dumping their technology shares.

As Feng Yu is chatting with Kirilenko, Ralph knocks on the door and enters. “Boss, Enron had made an official statement that you are tarnishing their reputation, and they had never fabricated their financial reports. They had hired lawyers to sue you and CNN, and are demanding a public apology and compensations.”

After Enron released this statement, its share prices did stop falling. The investors had split into two camps. One side is continuing to dump Enron’s shares, and the other side is buying in the shares at low prices.

Kirilenko frowned. “They are shameless. Did they say anything about Benford’s law?”

Feng Yu laughed and waved his hand. “It’s fine. I think the audit firm that audited Enron will be giving us an answer soon.”

That day, a top audit firm fired two senior auditors.

Feng Yu had just said Enron had fabricated their financial report, the audit firm fired two senior auditors. Who will believe that these two incidents are unrelated?!

After the sacking of two senior auditors was exposed, Enron’s shares start to fall again.

“Feng, should we buy in the shares for our short positions?” Kirilenko asked.

Feng Yu shook his fingers. “Don’t be anxious. The share prices had only dropped a little today. It will continue to fall tomorrow, and might even fall below 1 USD.”

“What? 1 USD? Their share price is over 60 USD this morning!” Kirilenko’s eyes almost popped out.

“Everything is possible. This company is involved in accounting fraud, and they will be charged in courts. Their credit ratings will also drop, and it will be a deadly blow to Enron. Furthermore, think about why did we short Citibank’s shares?”

“You are saying that Citibank will be implicated by Enron?!” If Citibank is implicated, their share prices will also tumble.

“Of course. Citibank is one of the most famous financial institutes on Wall Streets. They are also one of the culprits that created the internet bubble and had invested in many tech companies. Although there is no evidence pointing towards Citibank for Enron’s accounting fraud, they had lots of financial dealings. Do you think Citibank is not aware of it?”

Feng Yu is confident that Citibank will also pay a heavy price for this Enron scandal!

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