Chapter 866: Stock price flash crash, strategic adjustment

'Phillip Brothers has entered the countdown to death!'

Solomon Brothers, when he heard his subordinate report on the actions of the New York Board of Trade and the New York Mercantile Exchange against Phillip Brothers, John Gufran's face was gloomy, and after a long silence, he said with emotion:

At this moment, he felt a sense of forlornness.

Although Phillip Brothers had not yet collapsed, in John Gufran's opinion, it was almost as good as done for.

He had learned that Phillip Brothers had even failed to replenish the margin with the exchange on time, and the fact that the board of directors could even look at this directly showed that the situation within Phillip Brothers was even worse than outsiders could imagine.

What kind of a mess would it take for them to give up?

So in Johann Gufran's opinion, Philipp Brothers was beyond saving. Even if it could be rescued, Philipp Brothers would undergo a fundamental change, and if it changed its name, it would be a completely different company.

If it couldn't be rescued, then it would be dismembered, and the old financial company of sixty or seventy years would disappear.

'Hey, it's deserved to go down, just let our company follow the bad luck...'

At this thought, John Gufran's face turned as dark as water, and he felt an urge to rush to Albert Raphael's house tonight and beat him up.

If it weren't for Albert Raphael, Solomon Brothers would not have ended up like this!

Although it would not go bankrupt for the time being, it would also suffer heavy losses. If Phillip Brothers collapsed, most of the pressure would shift to their company.

'There must be something wrong here, maybe it's a conspiracy by the Chicago Consortium...'

'Forget it, things have come to this point, there's no need to explore the cause, let's just buy futures contracts as soon as possible to stop the losses...'

After thinking about it, John Gufran immediately walked towards the operations room.

...

'Boss, the stock price of Phillip Brothers has plummeted, should we temporarily stop buying stocks?'

Toby Moulton told Xia Yu as he quickly walked towards the operations room of Jiuding Securities.

Without stopping, Xia Yu said expressionlessly, 'Let's see what the situation is first.'

Toby Moulton said no more and followed Xia Yu to the operations room.

Xia Yu looked at the trading board and sure enough, it was red, and it was almost falling vertically, with very little fluctuation.

Then he looked at the latest stock price after the jump.

My goodness, the stock price had dropped to 4.02 US dollars per share, with a market value of 603 million US dollars, about to fall below 600 million US dollars.

(⊙o⊙)…

Just as Xia Yu was in a daze, the stock price had already dropped to 3.92 US dollars.

Accordingly, the market value of Philip Brothers officially fell below 600 million US dollars.

And the stock price was still falling all the way, obviously the market was panicking and people were scrambling to sell and flee.

However, there are not many fools in Wall Street institutions, and they know very well that there is still room for Phillip Brothers to fall, so why would they take it over?

Moreover, Phillip Brothers is now associated with bankruptcy. As soon as it is officially confirmed that it will go bankrupt, the stock will be delisted in no time, and buying now means losing money.

'Boss, there has been a sudden development at Philip Brothers, and the plan we made previously is no longer applicable. I suggest temporarily halting the acquisition of stocks and waiting and seeing for now,'

Toby Moulton said immediately after seeing his boss come back to his senses.

Xia Yu nodded slightly and said, 'You are right. I did not expect Philip Brothers to collapse so suddenly. Let's halt the acquisition. I estimate that the New York Stock Exchange will suspend the listing of Philip Brothers' stocks soon. Let's acquire them then.'

Xia Yu is not a god, and this time he misjudged the determination of the Philips Brothers to resist, and underestimated the extent of their losses.

It's normal to think about it. Not to mention Xia Yu, an outsider, it is estimated that even the directors of Philips Brothers may not be clear about the company's real asset situation. After all, no company will take the trouble to real-time count the company's assets, not to mention the more shady side of established companies. Without comprehensive statistics, it is difficult to figure out exactly how many messy assets there are.

Previously, the New York Board of Trade and the US Securities and Exchange Commission were able to reach a conclusion after just one day of investigation, not because they had completely accounted for all the assets, but because the losses of the Philipp Brothers company were so great that they could calculate an approximate figure just by roughly counting the assets.

Even an approximate figure was enough to reach a conclusion, after all, the losses were so great!

However, the early collapse of Philipp Brothers was actually more beneficial to Xia Yu. Just as it is now, if he were to acquire more than 20% of the shares, he would be able to save tens of millions or even hundreds of millions of dollars.

Just then, an employee walked quickly over, and Xia Yu and Toby Moulton turned to look.

The employee respectfully said hello and then said, 'Boss, manager, the latest news is that the authorities have given Philip Brothers one week. They must pay off their debts as they fall due and pay the deposit on time. If they fail to do so, Philip Brothers will be declared insolvent and the authorities will intervene further.'

'Anything else?' Toby Moulton looked at Xia Yu and then asked the employee.

'No.'

The employee shook his head and said, and Toby Moulton encouraged him to continue to pay attention to the news.

'Boss, it seems that the next week is the most critical period. What should we do?'

Toby Moulton looked at Xia Yu and asked, waiting for his instructions.

Xia Yu thought for a moment and said, 'Once there was trouble at Philipp Brothers, the futures prices for high-grade copper and aluminium went crazy. It's impossible to avoid bankruptcy on your own. It depends on whether the company will be restructured or liquidated. The best outcome would be for an institution to take over and restructure the company.'

In fact, there are two types of bankruptcy proceedings for a company: restructuring and liquidation.

The two are very different. Restructuring is a procedure to save a company from bankruptcy, while liquidation is a procedure after a company has gone bankrupt.

The former aims to actively prevent the debtor from going bankrupt and reflects the function of increasing the value of its assets, while the purpose of bankruptcy liquidation is to passively and fairly distribute the debtor's assets, reflecting the function of distributing assets after bankruptcy.

In the case of bankruptcy reorganization, the Philip Brothers company will still exist as long as it does not change its name, while in the case of bankruptcy liquidation, it will truly disappear.

Although the US Trading Commission and the New York Trading Commission gave the Philip Brothers company one week, Xia Yude was certain that it could not avoid it.

Although the general cause of bankruptcy is the inability to pay debts as they fall due, this is the general situation, and there are two main criteria for determining this.

The first is whether the debtor has the immediate ability to pay debts as they fall due; the second is whether the debtor's assets are sufficient to cover all of its debts (whether due or not).

Based on the current situation, even if Philip Brothers' debts are not due, it can be determined that it has lost its ability to pay, because the company is already insolvent and falls into the second category.

Not to mention that Xia Yu has already found out that the debts of Philip Brothers to two financial institutions are about to mature, with a total of more than 400 million US dollars. This money is not something that can be easily obtained, and it is not certain that any company is willing to take over the debt.

In addition to creditors, Philip Brothers also has to face the problem of getting back funds from a large number of investors. Before entering the formal asset liquidation process, investors can get back their funds, as long as Philip Brothers agrees to pay and has the money to pay!

However, once the company enters formal liquidation, its assets will be frozen, and at this point, the issue of asset distribution will be involved. Neither investors nor creditors can apply to recover assets.

So it can be imagined that the following week, Philipp Brothers will be overrun by people, investors seeking to recover their funds.

Whether they are given their money or not, Philipp Brothers will collapse even faster.

After considering all this, Xia Yu judged that the share price of Philipp Brothers still had room to fall, possibly to US$200-300 million.

Therefore, after a moment's quick thinking, he instructed Toby Moulton, 'Toby, you should first do the following preparations: first, investigate the latest shareholder situation of Philip Brothers; second, prepare a VAM conversion agreement, and at that time, use cash instead of shares to complete the VAM agreement; third, prepare for Philip Brothers to suspend trading and for us to take over the shares offline.'

'I have only one goal, to take over Philip Brothers!'