Chapter 863: The threat of bankruptcy

'It's time to ship!'

Looking at the strings of data on the trading board, Xia Yu calculated in his mind for a long time before saying indifferently.

Song Yang, who was standing next to him, beamed with joy and quickly said, 'Boss, shall I go and notify them?'

'Notify them and gather at my house tonight.'

Xia Yu nodded slightly and gave the order.

Although the New York Stock Exchange was investigating the Galaxy Fund, Xia Yu was not idle.

The New York Stock Exchange was also under immense public and internal pressure. The saying that money can buy anything applies everywhere.

For more than ten consecutive days, the New York Board of Trade and the US Securities and Exchange Commission had not found any evidence against Galaxy Fund. How could they withstand the pressure and affect the operations of Galaxy Fund during normal working hours?

Therefore, the New York Board of Trade and the US Securities and Exchange Commission had to frantically search for clues in secret and keep a close eye on Galaxy Fund's accounts on the exchange.

As for those anonymous accounts, although they were controlled by Galaxy Fund, they could now be traded directly using machines, remotely controlled, without the need for offline face-to-face trading contracts. How could they be caught so easily?

As for trying to trace the trading terminal of Galaxy Fund along the data, it is simply wishful thinking. Xia Yu's computer skills in this era would definitely beat a group of experts, not to mention that computers were not yet popular and there were very few people in the financial industry who knew how to use them.

It is precisely for this reason that although many institutions on Wall Street speculate that the mysterious spot giant in the market is Galaxy Fund or its associates, they cannot find strong evidence.

That night, Xia Yu followed the plan he had already formulated and told everyone to start shipping.

After all, he had only cleaned out the inventories of major mining companies and bought more than enough production capacity for the next month. Now that the halfway mark had been passed, it was time to start shipping.

Otherwise, after a month, the amount of goods supplied to the market by major mining companies would increase significantly, inevitably causing price fluctuations.

Rather than passively accepting this, he should take the initiative and sell the spot goods to other financial institutions.

The ultimate goal of financial institutions is still to make money. If they accept the spot goods at a high price, how can they make any money if they don't continue to drive up the price?

Xia Yu's transfer of some of the spot contracts may seem like he's made less money, but he has brought a large number of financial institutions on board, which will help him to sell the remaining contracts smoothly. In fact, he has still made a profit, and a more stable profit at that!

Early the next morning, Xue He's team began looking for the next buyer, which they had already identified, including financial institutions and manufacturing companies in urgent need of copper and aluminium.

The Galaxy Fund was also busy, with Song Yang directing the traders to start selling futures contracts.

With Xia Yu in the trading room, he was able to intervene and control the pace in a timely manner, minimising the impact of selling contracts on the market.

Normally, Xia Yu would not intervene, but let Song Yang take command. This was a rare opportunity to hone his subordinates, so naturally he would not let it go to waste.

There were so many buyers that as soon as Galaxy Fund put up a futures contract, at most one second later, it would be bought by a trader from an institution that was closely monitoring the market.

At this price, many conservative institutions that were long wanted to cash in, so there were always sell orders. Now that Galaxy Fund had put up sell orders one after the other, it did not attract much attention.

...

If you were to ask which company in New York was causing the most panic, no one would say Phillip Brothers, and only then would they say Solomon Brothers.

Phillip Brothers, large conference room.

An emergency board meeting is currently underway.

Tender Wells is not only the CEO, but also the chairman of the board.

He sat at the top of the oval conference table, rose and bowed apologetically to all the directors present, saying, 'I'm really sorry, because my management errors have caused the company to be in this huge crisis.'

None of the directors present gave him any face. After all, the company has fallen into such a situation, and what they have lost is their money. No matter what the reason is, they can't be in a good mood with such a serious loss.

In particular, the representative of the Philip family fund, Kester Philip, looked as if he had just died of old age, his face slumped and his breath foul.

He said in a cold tone that implied anger, 'Wills, it's too late to talk about this now. I want to know the extent of the company's crisis!'

'Yes, time is of the essence, let's get down to business.'

'Every second that passes, the prices of high-grade copper futures and aluminium futures rise a little more. We don't have time to waste.'

'...'

The directors present all spoke at once, urging Tendler Wells to get to the point quickly.

Tendler Wells, who held the positions of CEO and chairman of the board, had a strong grip on the company and had previously tried to solve the problem on his own by covering it up. Therefore, he had been able to get away with it in the face of repeated inquiries from the other directors.

An emergency board meeting had been held before, but the main focus was on getting the directors to make an effort. The situation had not been as bad as it was now, so the directors had not been told in detail about the company's investments, and it was only natural that they were not aware of the truth.

Tender Wells had a thick skin, and although he was embarrassed, he didn't show it on his face.

He took a deep breath, gathered his thoughts for a moment, and said in a heavy tone, 'Directors, our situation is already very bad. The company is on the verge of bankruptcy. External estimates are accurate. According to the current situation, the company will lose at least one billion U.S. dollars!'

The figure of one billion U.S. dollars is completely different when you read it in the newspaper than when you hear it from Tender Wells' mouth. Everyone's heart no longer harboured the slightest bit of hope.

The meeting room was suddenly in an uproar.

Tender Wells continued expressionlessly as if he hadn't noticed: 'The company's share price has fallen to 7.74 US dollars a share, a drop of more than 72.2% from the recent peak of 27.87 US dollars. The company is now worth 1.161 billion US dollars, a loss of 3.012 billion US dollars from its peak.'

'And because of the influence of public opinion, investors have lost confidence in our company. The line of investors waiting to get their money back now could go all the way to the bronze bull. I've already ordered people to delay as long as possible, but everyone knows that investors have the right to get their money back, and we can't stop them for long!'

'The company is now on the verge of bankruptcy. If the prices of high-grade copper futures and aluminium futures continue to rise, our final outcome will be to file for bankruptcy liquidation!'

Upon hearing this, the directors present finally couldn't hold back any longer and exploded.

Kester Philip said resolutely, 'The company must not go bankrupt!'

The Philip Family Fund held a cumulative 27.8% stake in Philip Brothers, which was worth US$1.16 billion a month ago when the company's share price was normal.

However, now that the company's market value has shrunk, their stake is only worth more than US$300 million at the current share price.

Although the loss is huge, at least it is still worth something, isn't it? At least there is some consolation!

If the Philips Brothers company goes bankrupt, then the shares they hold will be worthless.

Not only that, but once the bankruptcy is liquidated, after the investors have recovered their funds, if the capital is used to offset the debt, then the shareholders will have to bear the excess debt.

The Philips Family Fund, as the company's largest shareholder, will bear the greatest debt.

If there is still a debt of 700-800 million US dollars after liquidation, the Philips Family Fund will have to bear 200-300 million US dollars of debt, which is enough to wipe out the Philips family.

The Philips family rose to prominence thanks to Philips & Co. It can be said that the shares of Philips & Co. are the Philips family's greatest wealth. Although they have used dividends to diversify their investments over the years, the amount is not too large, after all, not all investments are successful.

Excluding the shares of Philips & Co., the Philips family does not have much in assets.

If Philips & Co. really goes bankrupt, then Koester Philips will definitely lose his shares before bankruptcy, even if he gives them away for free!

He knew full well that the capital of the Philips Brothers Company came mostly from investors and banks, and that the company's net assets definitely did not amount to a billion dollars. Since Tender Wells would definitely lose more than a billion dollars, the company's assets would definitely be negative as long as it went bankrupt.

Rather than burdening the Philips family with debt, he would rather find a fool to give away the shares.

The fear was that no fool would want them, and they could not be given away!

'That's right, the company cannot go bankrupt!'

The resident director of Bear Stearns also said firmly.

Bear Stearns was a Jewish investment bank that worked closely with the Philipp Brothers company. The latter often turned to Bear Stearns when it wanted to use leverage, and Bear Stearns had now lent at least ten billion US dollars to Philipp Brothers.

If Philipp Brothers went bankrupt, Bear Stearns would not only lose its investment, but would also be unable to recover all the money lent.

'The company absolutely cannot go bankrupt, and must not go bankrupt!'

'...'

The resident directors of the other banks spoke up one after the other, their attitude surprisingly unanimous, and they all refused to allow the Philipp Brothers to go bankrupt, for exactly the same reason.

Seeing the reaction of the crowd, Tendler Wells, who was sitting at the head of the table, raised the corners of his mouth slightly before hiding them again. He had been waiting for this moment!

'Now that this is the situation, if the company does not want to go bankrupt and close down, it must obtain sufficient funds. But unfortunately, our company cannot borrow any money, and no bank will lend us any.'

Speaking of banks, Tendler Wells looked at the directors of those banks.

But at this time, these directors pretended not to hear and were clearly unwilling to get involved.

Of course, there was still one way to go, and that was for all shareholders to contribute money and re-inject capital into the company to increase its total net assets.

As long as the company was not insolvent at that time, it would naturally not go bankrupt.

But Tendler Wells knew that this solution would never be implemented, because no shareholder would be willing to invest capital under such circumstances. Even he himself, even though he only held a 3.2% stake, would not be willing to invest any more capital.

Since even he himself had no confidence, he naturally did not mention it, and the other directors naturally chose to ignore it.

For a while, the room fell silent, and the atmosphere became heavy and strange.