BXBX NOVEL Chapter 99: Squeeze
I got a call.
I grabbed my phone. It was Mark.
"Jack! Are you seeing this?!" Mark\'s voice crackled through the phone.
"Yeah, Mark, I see it... It was only a matter of time."
"They\'re getting torched! There is no way we are taking profits. We will let them stew," Mark said. "What about your funds? Are you holding or cashing out?"
"For now, I\'m just watching." I said, my eyes glued to the screen. "This could be the squeeze of the year. I\'m not selling a single share today. They have millions of shares to cover and no sellers. Let them drive the price up themselves."
"Fuuuck, Jack! This is insane. We have to celebrate this. Night party at my house—Danny\'s getting the coke. We\'re going to be fucking snorting lines all night."
"Mark... do you ever show up to work sober?"
He paused, then laughed. "Sober trading? Are you high?"
"Quit that shit, Mark," I said and I hung up.
The stock resumed trading and the tape went wild—more and more shorts were scrambling to cover as the price kept climbing.
Midday brought profit-takers, but every sell got swallowed up, pushing the stock even higher.
The climb didn\'t stop.
Then, boom—another volatility halt, just an hour before the close. When trading opened back up, the stock surged again, closing at $26.40.
\'Now I need to really think this through.\' I thought.
I held 4,560,000 shares, more than 40% of the available float—If I held onto the stock for the rest of the month, I\'d be required to file a document of ownership.
What\'s ridiculous is that, together with Johnson Trading Orlando, we were now holding over 11 million shares and yet the number of available shares should be just 10 million...
Alone we were holding more shares than should have ever existed!
It was an absolute shit show.
Just yesterday, over 200% of the shares were shorted. That number had dropped, but the stock was still royally fucked, stuffed full of fake shares.
But more importantly, I had no intention to become a long-term shareholder of Monster Beverage; the price was already inflated. Profits elsewhere would be much greater.
That meant that I needed to sell out of the stock by the end of the month.
...
Later in the evening, I got a call from Sam.
We needed to consider how to proceed.
WhitePath Europe had most likely covered quite an amount of shares today.
If we didn\'t start selling, the volume would quickly fall and the price would start falling with it.
To make the most of this, we should start selling tomorrow.
Sam told me that their current position in Monster Beverage was sitting at $180,438,720.
We have decided that we will sell around 30% of that position tomorrow, unless the price drops will become too significant. Then we will proceed with selling around 500,000 shares a day.
There was one more significant development.
Due to the success of Monster Beverage, traders seemed to get interested in the other stocks shorted by WhitePath Europe.
Squeeze after squeeze has been happening in those stocks today.
Johnson Trading Orlando\'s portfolio was currently sitting at $512,000,000.
WhitePath Europe, on the other hand, according to my calculations, would sustain losses of over 400 million dollars.
...
On Tuesday morning, the stock opened strong at $27.30 and it had no intention of stopping there.
It was aiming for the sky.
$28.72
$30.21
Halted.
$31.92
$34.21
Halted.
It was obvious—WhitePath Corp. had thrown in the towel. No one else had the firepower to create a squeeze of this magnitude.
At around $36, the price had stabilized and was now slowly trickling down.
I took a quick look at my dashboard.
[Charles Schwab]
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[Total Balance: $144,226,760.37]
[Available Balance: $7.77]
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[Market Value of Holdings: $162,700,800.00]
[Margin Borrowed: $18,474,039.63]
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Portfolio:
[Monster Beverage Inc. ($MNST)] [$35.68] {[ 4,560,000 shares ]}
[% Gain Over Last Month: +511%]
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I started selling.
10,000 shares at a time, every five minutes or so.
Normally, this would have sent the price down, but not today. Every share I unloaded was snapped up immediately.
And I wasn\'t the only one selling, as Johnson Trading began selling as well.
There was only one explanation. Evelyn and Doyle were desperately trying to dig themselves out of the hole they were in.
I had sold 860,000 shares in one day at an average of $33.18/share.
In the evening, Sam called me again.
We talked for a long time, but as the conversation was winding down, Sam\'s tone suddenly shifted into a very serious one.
"Jack," he said. "I will need to ask you for a favor... Do you remember the time when I said that if this didn\'t work out, it would be the end for me?"
"I do..."
"Well... the day I visited my father, I made a deal with him. If I lost this fight with my siblings, he would leave me out of the inheritance. But there was another side to this deal. If I managed to gain more out of this situation than my siblings, he agreed to prioritize me in the division of the inheritance."
"Alright... I get it. This is fantastic, but what is this favor you need from me?"
"Jack, I need you to come with me to my father\'s birthday." Sam said, pausing as if searching for the right words. "It might sound strange to you, but I need to have someone in my corner. A business partner; or a strong ally so to speak."
"Yeah, of course, I\'ll go with you," I replied without hesitation.
"Well umm, then... Great... It\'s next weekend."
"No problem."
"Thanks, Jack. I appreciate it."
I was about to end the conversation, but then I remembered something.
"By the way, there\'s something else I wanted to run by you." I said, "You know what \'Google\' is, right?"
"Hmm... Damn, it does ring a bell. It\'s the searching thing, no? I think Yahoo is using their software."
"Yes, the bell is ringing correctly. I see massive potential in it, Sam. I first considered investing in them myself, but in the end, I might need your backing. I\'m pretty sure they would require financial counseling and advice, and I can\'t offer that myself."
"Then what are you waiting for? Just go ahead and negotiate with them. But... do you really think they will grow that much? I heard that Yahoo was thinking of making its own search engine. There will probably be a few dozen search engines soon..."
"Oh, come on, think Sam. It\'s not that simple. They are a few years ahead of their competition. In the software world that\'s massive, especially for internet related stuff."
"Alright... and what\'s their model? Do they charge websites to display them at the top of search results or something like that?"
"They might as well, but what I\'m most interested in is this system called \'Google AdWords\'. Businesses can create ads that are displayed when users search for specific keywords. This way they can display only ads that users would be interested in, and the businesses only need to pay if the users click on their ad."
"Okay... sounds cool. How much money are they making on this?"
"Last year, they did 152 million dollars in revenue."
"150 million?! So it\'s not a small company anymore. Evaluations for software companies are crazy as well. You will need quite a bit of money if you want a significant stake."
"Yes. That\'s partially why I\'m asking for your backing."
"Well..." Sam considered this for a while. "Without you, I would not get to where I am now, so I\'m giving you the go-ahead."
...
For the rest of the week, I continued to sell off shares in Monster Beverage until I had fewer than a million left.
\'I don\'t need to fill out ownership documents...\' I thought.
Sam had sold off 60% of his stake and trimmed his position in the military stocks.
By the end of the week, I had $107,690,000 in available funds, and Sam was sitting his ass on over $160,000,000 in cash.