Chapter 567 Shorting Thomson
Interestingly, on October 2, when the US stock index continued to rise, the Wall Street Journal reported that because the crisis caused by the subprime mortgage market has basically ended, the US economy will continue to develop...
Then on October 9, the Dow Jones Industrial Average hit a record high of 14,164 points.
At this time, the stock prices of many companies have reached or are about to reach their highest prices in the past two or three years.
For example, the stock price of Thomson Group has risen from about US$42.5 when they first prepared to acquire Reuters Group in May to nearly US$47!
The market value of Thomson Group has also risen from about US$27.5 billion at the time to nearly US$30.5 billion, which is more than US$10 billion higher than the market value of SEM Group.
This also means that according to the acquisition plan proposed by Thomson Group before, their acquisition price for Reuters Group has been increased.
Of course, their main task at present is to persuade the relevant regulatory authorities in the United States and Britain to release the antitrust investigation of Thomson Group against Reuters Group.
To achieve this goal, in the recent acquisition plan of Thomson Group, Thomson Group and Reuters Group finally had to "give up the pain"...
They agreed to sell some databases to eliminate the antitrust authorities' concerns about competition.
These include Reuters' secondary market brokerage research reports, corporate earnings forecasts and macroeconomic databases, and Thomson's corporate basic financial information database.
Not only that, Thomson Group and Reuters Group also agreed to transfer the assets, personnel, intellectual property rights and customers that are compatible with the database at the same time, so as to ensure that the buyer can effectively compete with Thomson-Reuters Group in a shorter period of time.
It can be said that as Thomson Group gradually gives in to the regulators, it also means that the regulators are more and more likely to approve this acquisition. In particular, Bloomberg, the American regulator, once again revealed to Barron that according to the information he received, the relevant officials of the American Trade Commission (FTC) and the Antitrust Bureau of the Ministry of Justice have praised Thomson Group's concessions and may become positive about this acquisition in the future...
Once the United States passes the antitrust investigation on Thomson Group's acquisition of Reuters Group, the pressure will all come to the relevant British regulators.
However, in early October, Tianhe Capital's funds in HK also began to short Thomson Group's stock price in the Toronto Stock Market and the Nasdaq Stock Market.
This time, Tianhe Capital obtained a loan of US$1 billion from Standard Chartered Bank with its automotive and real estate businesses as collateral.
Their Initial Energy Fund (IE Fund) in HK will use these funds to short Thomson Group's stock price.
As early as September, IE Capital had quietly started buying shares of Thomson Group in the secondary market. Because their purchases were very covert, they did not attract the attention of Thomson Group.
It was not until October, when the share price of Thomson Group exceeded $45, that IE Capital began to borrow Thomson Group shares from the market.
On October 10, they tried to start the first large-scale market crash. On that day, Thomson Group shares worth more than $50 million were sold in a short period of time.
Although the market value of Thomson Group has exceeded $30 billion at this time, 70% of the shares are held by the holding company of the Thomson family, and the circulating shares in the market are less than 30%...
The first market crash of IE Fund has directly smashed the share price of Thomson Group from $46.25 to $45.32, and the share price has dropped by more than 2%.
The stock fell 2% almost instantly, which is actually very abnormal. Even after the stock index reached its peak, many stocks were falling after the opening today. However, it was still a bit puzzling for a stock like Thomson Group that was not involved in bad news to suddenly fall.
Therefore, seeing this scene, many people quickly opened Bloomberg News and other media to see if there was any breaking news or bad news that they ignored...
Of course, short selling is not a one-shot deal. After smashing the stock price, IE Capital continued to sell stocks rhythmically.
In addition, Barron also released some news through the media he controlled...
Of course, it can't be fake news, otherwise the SEC would have to talk to him for a crime of manipulating the market.
Some experts appeared in some media on the same day. Based on some of the public information about Thomson Group's acquisition of Reuters Group, they analyzed that Thomson Group's acquisition of Reuters Group would be difficult to obtain approval from the market regulatory authorities, otherwise a new giant would emerge and this industry would inevitably become a game of oligarchs...
These reports are very careful and there will be no false elements. They are completely normal analysis.
It was just at this time that many media outlets published such news that looked down on the Thomson Group's acquisition, which made some Thomson Group stock holders feel uneasy. In addition, although the Thomson Group's stock price had just risen to a high level, it immediately fell significantly today, which would also make some cautious investors seek safe havens.
On that day, the stock price of Thomson Group closed at US$44.87, and the stock price fell by nearly 3% compared with the opening price.
This first day was just a tentative attack by the IE Fund.
On the second day, before the North American stock market opened, the market received news from the UK after the market closed yesterday.
An unnamed official from the British Competition and Markets Authority (CMA) claimed in an interview with reporters that Thomson Group's acquisition of Reuters Group would be difficult to pass their review. Based on the principle of fair competition in the market, the British side did not want a large enterprise that could control the financial consulting industry to appear, because this meant that Bloomberg News and the merged company would account for more than 65% of the market share, which in itself was contrary to fair competition.
Affected by this news, after the Nasdaq and Toronto Stock Exchanges began trading, Thomson Group's stock price opened lower, opening at a price below $44.
In just one morning, its stock price fell to around $42.5, which is close to the stock price of Thomson Group in May this year.
It can be said that shorting the stock price of Thomson Group is the task of IE Fund this time, but in the entire European and American stock markets, the funds mobilized by Barron have already started a comprehensive shorting of the entire market at this time.
Black Swan Fund has invested most of the funds they obtained in the previous stage in shorting US stocks.
Shorting in the European market has also begun to accelerate.
In France, William Weber Capital finally received nearly 2.5 billion euros in gambling agreement income under the entanglement of NM Rothschild Bank. All of these funds have entered into shorting the financial industry, including banks.
Including the whole of Europe, DS Group and related funds are also shorting on a large scale.
It can be said that the scale of short selling this time is unprecedentedly large. The funds mobilized by Barron in all markets exceed US$50 billion!