Chapter 233: The Short Man and the Giant

……

After nodding, Guo Shouyun stood up and walked to the window, looking at the lush mountains behind the villa, and after a while, "In fact, sometimes I am very conflicted, I want to end the energy crisis in California as soon as possible to avoid losses, and I plan to take advantage of the crisis to buy more public utility companies and turn the crisis into an opportunity!"

"The struggle between the dwarf and the giant?" said Qin Zhi, who was standing behind.

"That's right. After glancing at him, Guo Shouyun nodded, "One is the loss of the present, and the other is the opportunity of the future! The dwarf asked me to choose the present and avoid the loss." Giants made me accept my losses and choose the future. Sometimes I'm conflicted. After a pause, "Old Qin, if you had to choose, what would you choose?"

"I will choose the future, and I believe that the boss will make the same choice as me!"

"How do you know?" said Guo Shouyun with a smile. Barbé Douglas's acquisition plan has only just begun, and Qin Zhicheng is unlikely to know the plan.

"If you had chosen to avoid losses, you wouldn't have acquired Pacific and Southern California!" Qin Zhicheng smiled.

Guo Shouyun was stunned for a moment, and then laughed.

"I can't hide anything from you!"

"Is the boss going to short Enron to hedge this loss?"

"That's right!" Guo Shouyun nodded, "There will always be an end to the energy crisis in California, maybe two months, maybe three months, maybe half a year, but it will definitely not exceed this year." With our income from shorting Enron, it is enough to hedge the losses in this crisis. Taking a step back, even if it can't be fully hedged, then the amount of loss will be reduced to a smaller value!"

After nodding in agreement, "Why is the boss so adamant that the energy crisis will end this year?"

"The people of California have endured the energy crisis for more than a year, and if it continues to spread, there is no guarantee that what will happen!"

Of course, this statement is just a kind of excuse for Guo Shouyun, and the reason why he is really so sure comes from the memory of his previous life. In the previous life, even with the income from California's energy crisis, Enron did not survive this year. Now that he has learned more detailed business data about Enron, he is even more sure. Among other things, Enron's administrative expenses alone have grown to the point where they cannot be increased.

It is impossible to imagine an energy trading company with a market capitalization of $80 billion and a net income of no more than $1.5 billion, and her administrative expenses are as high as $2 billion a year. In addition to energy trading and pipeline business, more than 95 percent of Enron's industries are losing money. Numerous facts have proved that companies that lack industrial support lack the stamina for growth. In particular, Enron is still an empty shell giant that has been stolen by 'internal thieves'. Aside from his bluffing appearance, he has almost nothing left.

Qin Zhicheng nodded, and after thinking for a while, "If everything is as the boss expected, then in addition to shorting Enron to hedge losses, we should also have some evidence, once things become unmanageable, we can also end the energy crisis and reduce losses through these evidences." Only in this way can we truly take the initiative into our own hands!"

"You're right. But Enron's structure is complex and carefully managed. It's not easy to find evidence of their market manipulation!" Guo Shouyun said with a slight frown.

"Maybe the boss should think of a way from within Enron!"

"I understand that. It's just that there aren't many high-level executives who can grasp Enron's secrets. And we don't know where to start!"

"If the boss is embarrassed, I can recommend someone for you!"

"Who?"

"Tim Belden. He is an Enron West Coast energy trader, and he must know the inside story of California's energy crisis, and even participated in it!"

"Tim Belden!" Guo Shouyun's eyes deepened.

"He's my classmate when I was studying for a master's degree in financial engineering at Duke University, and I can get in touch with your boss if he needs it!"

After a moment of silence, a smile appeared on Guo Shouyun's face, "Sometimes, surprises always come so suddenly. ”

"Don't be surprised, but hopefully this meeting will give you what you want!"

Guo Shouyun nodded, "Whether it succeeds or not, I have written down your favor!"

Qin Zhicheng smiled and nodded.

"Oh, yes. The funds invested in shorting Enron this time are the funds of Pan Pacific Group, don't make a mistake when you record it!" Guo Shouyun reminded.

"Don't worry!"

……

“… In Enron's annual report, the number of profits from the "assets and investments" project is always a mystery. The annual report notes that the department reads "the construction of power plants around the world, the commissioning of their completion and the sale of them at a profit, and the fact that the division is also involved in the sale and purchase of equity and bonds in energy and telecommunications companies". The division's profit fell from $325 million in the second quarter of 1999 to $55 million in the second quarter of 2000. LinkedIn Wealth believes that Enron is manipulating its profits through the amount of asset sales in the Assets & Investments program. In this way, when the profit in any quarter falls short of Wall Street analysts' expectations, Enron can always meet or exceed the expected profit by increasing or decreasing the sale of project assets. ”??“ … Despite several years of Enron's claims to reduce its debt, in the first three quarters of 2000 it issued an additional $3.9 billion in bonds, bringing total debt to $13 billion at the end of September 2000 and raising its debt ratio (debt-to-total assets) to nearly 50 per cent, compared with 39 per cent at the end of 1999. In addition, its operating cash flow was $1.6 billion in 1998 and $1.2 billion in 1999, compared with $100 million in the first nine months of 2000. Although Enron's operating cash flow is gradually declining, its announced net profit is rising year after year, which in itself shows that Enron's profit does not come from its main business, but either from non-recurring income or fraud... ”

"Bang...!"

The water glass on the table was almost knocked over, which shows how angry the people who made such a big move really were in their hearts.

"Damn, they're slandering, they should take these bastards to federal court!"

A middle-aged white man with a dense beard and a strong physique waved his fists and said with an angry expression.

"We can do that. But when the judge asked us to show us the documents that proved that their press release was defamatory, we came up with a lot of evidence, and it turned out that Enron was doing worse than they said.

A Chinese with gold-rimmed glasses, yellow skin and black eyes spread his hands and said sarcastically.

"Maybe you softass can tell us how to do it?"

"A soft egg is always better than a stupid person, at least a soft egg can keep the company, and a stupid person can only make things worse!"

"Who do you say is a stupid person?"

"Whoever is talking is who?"

Looking at the two people who were arguing, the high-level people around Enron looked at each other, but they didn't see it. After all, one of these two guys is a close confidant of the current Enron CEO Jeffrey Jilin, and the other is the assistant of the other and the current CEO of Enron's most favored energy services division. They are Jeffrey Jilin's right and left hands. With the exception of Kenneth Lay and Enron CFO Andrew Fasto, no one is more elevated.

"Cliff, Lou, calm me down. Now that Enron is in crisis, if you feel that your personal grievances trump the safety of the company, you can resign, and I promise to approve it. ”

Seeing that Geoffrey Jilin was really angry, Cliff Baxter and Lou Pé glared at each other before calming down.

"Guys, now because of LinkedIn's continuous reports that are not good for Enron, the upward trend in Enron's stock price since March has stopped. Even after Bruce Kwok invested a large sum of money in Enron's short position, the stock price fell by $5.3. If this situation is allowed to continue, the situation will only become more and more unfavorable for us. So, I hope that you can work together to come up with a solution to change the current Enron predicament, otherwise our stocks will continue to depreciate, and I believe that no one wants to see such a situation. Jeffrey Jilin said in a deep voice.

"I have a question, Bruce Guo spent close to $7 billion on the acquisition of Pacific and Southern California, as well as on Apple's three projects, and $8 billion if you count the legendary comics. And just yesterday, he bought Oregon Electric and Gas for $800 million. Now, with the addition of shorting our funds, his overall investment has reached $9.3 billion. In the calculation of the maintenance of Pan Pacific Group's working capital, it must be more than 10 billion. Even with loans from Goldman Sachs and Morgan, his financial strength would not be so strong!" spoke a bald black man named Rick Cowce, Enron's chief accountant.

"I heard that his Thunder Fund made a lot of money in gold speculation!"

"No matter how much he earns, we have to figure out the exact amount. Otherwise, if you don't know the strength of the enemy, you will attack rashly, and you will not have much chance of winning!"

"Figuring out the Thunder Fund's revenue isn't easy. Especially when Bruce Guo is already on guard. ”

Looking at the people arguing in the conference room, Jeffrey Jilin was distraught by their arguing. But for a while, he didn't come up with any good solutions.

"Andrew, what do you think?"

Andrew Fasto, a financial genius with the title of 'prodigy' within Enron. It was his brilliant financial skills that raised Enron's stock price step by step, and it still has a market value of more than $60 billion until now. However, it is clear that an unstable foundation will not support a tall building. Enron, lacking industrial support, has come to an end. This is not something that can be changed by financial skills alone.

Of course, Andrew Fasto, as Enron's chief financial officer, knows this better than anyone. Therefore, he has been slowly selling his Enron stake since last year. After making a profit of nearly $127 million, he didn't have much equity in Enron. So, he didn't care too much about Enron's end. Even if Enron goes out of business in the worst-case scenario, he guarantees that his earnings will not be lost.