Obviously taking into account the legal risks involved, the article that ultimately accused the Internet industry of being a Ponzi scheme did not directly name them, but listed a series of detailed data. Even so, a discerning person can still understand at a glance which company the 'industry giant' mentioned in the article refers to.
After all, the power of many short-selling capitals and the Mellon family cannot be underestimated. A large number of media outlets across the United States have unified their efforts, which inevitably triggered huge social repercussions.
Even though the Westeros system made many responses in time, the Nasdaq still fell when the market opened on Monday, January 27. Igret Corporation, which bore the brunt, suffered a deepest decline of 1.3% within the first hour of the opening, with a book loss of more than 10 billion. Dollar.
Finally, on Monday, the Nasdaq index closed down 69 points, or 1.1%. As a leading stock, Igret's share price also fell by 0.7% in a single day, and its market value fell from a high of $751.9 billion last Friday to $746.6 billion. Other companies such as Cisco, AOL, Microsoft, etc. also saw their share prices drop. various degrees of decline.
Even if it doesn't meet expectations, such a 'good start' is quite exciting for some people.
So, that night, the next step was taken.
In an interview with the CBS evening news program, which is controlled by Westinghouse Electric, which has close ties to the Mellon family, a former Republican government official in the U.S. Department of Justice strongly criticized the Clinton administration's delay and perfunctory investigation of the Eaglet antitrust investigation and called on the federal government to Congress and the states of the United States should unite to put pressure on the White House to dismantle Yigret, a 'monopoly beast' that hinders the development of the new technology industry.
Not only that, on the morning of the next day, a large number of local newspapers and social network platforms once again had some influential senior government officials or public figures in the United States calling on the Federal Reserve to raise interest rates in order to control the growing overheating of the federal economy, especially the promotion of serious bubbles such as the Internet. The new technology industry has shifted to a healthy development track.
Whether it is an attack on Ygritte, the leading company on Nasdaq by market capitalization, or a call for the Federal Reserve to raise interest rates, compared to the article that was called an 'appetizer' on Monday, it is a direct hit.
On Tuesday, the Nasdaq fell sharply again.
Compared with Monday, the Nasdaq's single-day decline on Tuesday expanded to 1.6%, and Igret's stock price also expanded from a 0.7% decline on the previous day to 2.1% on the same day, with the market value evaporating by more than $15 billion in a single day.
The rain is coming.
Although the negative news for two consecutive days has not triggered a large-scale selling frenzy, everyone knows that if this continues, the result will only be a collapse. So? The technology stock forces led by the Westeros system also made the most decisive practical counterattack.
On Tuesday night, Federal Reserve Chairman Greenspan accepted an interview with ABC Nightly News and personally stated that in order to maintain the current prosperity of the U.S. economy, the Federal Reserve has no plans to raise interest rates in the short term.
Then comes Wednesday.
With major portals and major newspapers on the east and west coasts reporting that Yigrit has massively subsidized e-commerce through profit-making businesses such as advertising and software? With a huge loss of up to 1.7 billion US dollars in the past year, it has created at least 10 losses for the federation inside and outside Yigrit. In the promotional article for 10,000 long-term jobs, at the White House press conference in the morning, when faced with reporters’ questions? The White House spokesperson made a statement in public? Considering the close correlation between Yigret’s many businesses and the large number of jobs created for the federal government Opportunities: The Ministry of Justice will carefully consider the split plan for Ygritte, which will only urge Ygritte to improve certain market strategies that are harmful to small businesses and consumers.
After the White House made its statement, on the same day, Ygritte responded almost at the same time.
On the morning of the West Coast, Yigrit publicly signed a technology licensing and compatibility sharing cooperation agreement with IBM, Microsoft, HP and other technology companies that also provide data center services at its headquarters campus in San Francisco. The focus is to increase Yigrit’s The compatibility of unique Internet basic tool software with other data center platforms.
Obviously, Yigrit did this in response to the accusation that Yigrit bundled its software with data center services to force sales to users during an investigation launched by the Department of Justice at the end of last year. Not only that, on Wednesday afternoon, Yigrit announced again that in order to support the development of many small businesses, Yigrit would comprehensively reduce the price of its data center services by 15%, effective immediately.
This is still not over.
On Thursday morning, Igret executives held a press conference at an Amazon warehouse and logistics center in Florida that is about to be completed near Miami, announcing that it will launch a recruitment plan for 2,000 employees in advance. At the same time, after the logistics center near Miami is officially opened, in addition to the increase in the number of employees it employs, it will also bring no less than 10,000 jobs to the surrounding areas.
At this press conference, a judge from the Florida State Attorney's Office who was responsible for the antitrust investigation of Yigrit personally stood up and affirmed Yigrit's move, publicly stating that the Florida State Attorney's Office and Yigrit The company is in the final stages of settlement talks over last year's antitrust investigation.
For two days in a row, a series of news that were almost completely reversal attracted a lot of criticism from the short-sellers who controlled the public opinion platform, but the market feedback was immediate.
Eagle's decline on Monday and Tuesday came to an abrupt end on Wednesday, and it began to rise. In addition, because of Greenspan's personal statement, the Nasdaq also quickly recovered its lost ground, driven by the rebound in Igret's stock price, and easily returned to the high of above 6,300 points at the close of last Friday.
The rapid reversal of the whole thing was a complete crushing to some interested observers who knew a little bit about the inside story.
The disparity in strength between the long and short sides is too great.
Short capital can only use some local media or small online platforms as well as some retired former politicians to speak out and create public opinion, while the long side directly moved out of the White House and the Chairman of the Federal Reserve, and also controlled the Igret portal, ABC TV network, "New York" The Times and other mainstream media with national influence, the results of the collision can be imagined.
On the other hand, Igret's further opening measures and promotion of local employment have also brought the Ministry of Justice and state prosecutors' offices to a big step. Anyone with a discerning eye can see that last year, it was an antitrust investigation initiated by the White House to gain control. After Ygritte broke the situation, it was bound to end in an anticlimactic manner soon.
It is certain that Yigret will not be split up. Even if price cuts in data center services and technology licensing to other peers will have some impact on Yigret's revenue and monopoly advantages, in the end the benefits far outweigh the disadvantages.
Finally, Friday, January 31st.
After a lively week, the Nasdaq finally closed. Not only did it not turn to collapse, but it rose again by 1.8% in one week compared to last Friday, reaching 6437 points.
The most dazzling one is Ygritte.
It continued to rebound on Wednesday, Thursday and Friday. By the close of trading on Friday, the company's market value had reached US$773.1 billion, with a single-week increase of 2.8%.
It may seem like a single-digit percentage increase, but given the size of the Nasdaq market and Igret at this time, it's still a pretty huge number. Correspondingly, this week, short capital, whose book floating losses narrowed slightly in the first two days, ended up with losses continuing to expand after a week.
Sunday, February 2nd.
Simon came to New York yesterday and spent a day with Irene Lauder, and this morning he gave Grace his time.
Then at noon, we invited Amancio Ortega, the founder of Inditex from Spain. Although the Spanish businessman who created the Zara brand later became the richest man in Spain and briefly became the richest man in the world, for Simon at this time But it's nothing.
no way.
Simon is no longer richer than anyone else.
After lunch, the two happily finalized a plan to invest in Inditex, the parent company of Zara, with Westeros as the main body. Simon went to the residence of Chen Qing and Lin Su in the Upper West Side in the afternoon.
As soon as he entered the door, Chen Qing rushed over: "Boss, you are really amazing."
Simon stood in the entrance hall with a smile and raised his feet to let the waitress help him change his shoes. He said at the same time: "What a coincidence, I have always felt that way."
"Oh, but on Wednesday, we signed a cooperation agreement with IBM in the morning and announced a big price cut for YWS in the afternoon. It's too damaging. Boss, although Igret can definitely afford a price war, it's not necessary. , I think just signing the cooperation agreement is enough?"
The two of them said that they had already walked into the living room.
Simon did not answer immediately, but asked: "Where is Asu?"
"She just went out to buy some things. We plan to make delicious food for you tonight."
Simon nodded, and the two of them sat down on the sofa in the living room. Seeing that Chen Qing was still staring at him with bright eyes after finishing speaking, he said: "This is the original plan. Our YWS, if you pay enough attention, you should Understand, it’s very different from some other traditional data centers.”
Chen Qing leaned against Simon softly and said, "I know, it's cloud computing."
"Yes, cloud computing. In addition to maximizing the benefits of data center resources, this technology also has another advantage. The larger the scale, the lower the relative cost. In fact, from the beginning, compared with other providers For companies with similar services, Yigrit's profit margins in this area are very generous. It was only because we initially set higher prices to avoid the alertness of our peers. Now, the scale of Yigrit's data centers continues to expand, and relatively The cost is getting lower and lower, even if it is reduced by 15% this time, our gross profit margin is still far higher than that of other peers."
"Does this mean that prices will be lowered in the future?"
"Of course, in the final analysis, in business competition, compared with technical barriers and the like, low price has always been the most direct and effective moat. As long as your price is low enough, you don't need to worry about the emergence of competitors. Cloud computing technology, although Iraq Gretel is ahead of schedule for some years in research and development, but this technology, which has been conceptualized in the 1980s, is not difficult to overcome. If Gretel wants to ensure its first-mover advantage, the most effective way is to lower the price. , other competitors are unprofitable, and forced competition will only make us continue to lose money, so it will be difficult to pose a threat to Yigrit."
Chen Qing turned her head and thought for a while, then said: "Well, if you ask me to guess, after the Nasdaq collapses, Ygriet will definitely lower the price of YWS significantly again. By then, the bubble will burst and price competition will come with it, and other industry competitors will continue to do so." There is no way to chase Ygritte.”
Simon nodded: "Tidy."
Speaking of which, the reason why Amazon was able to occupy half of the global cloud computing business was that its leadership in technology research and development was not the key. In fact, it was Google that first developed a mature cloud computing solution to save costs.
The key to Amazon becoming king in the cloud computing business is price. Even when there were no competitors at the same level, this company realized that its profit margins were too large, so it took the initiative to lower prices and lower prices again, so it was large enough in its own right. When costs are getting lower and lower, an insurmountable commercial moat has been created for itself.
Other subsequent companies, because their business volume cannot be compared with Amazon and their relative costs are higher, they can only compete with Amazon with long-term losses. The result is conceivable that although they can eventually capture a part of the market, they will never be able to compete with Amazon. Compare.
Referring to memory, Simon personally intervened in Yigrit's YWS business and finalized the same strategy.
This 15% price cut taking advantage of the trend is just the beginning.
With Igret's current data center size 10 times that of other peers, it is impossible for either Microsoft or IBM to compete. Even in the winter of the Internet industry that can be expected after the bursting of the new technology bubble, other competitors can Not being able to survive is a big problem.
In the living room, after talking about this matter, Chen Qing asked curiously: "Boss, the Nasdaq is now at 6,400 points. How high do you think it can go in the end?"
Simon could only shake his head: "I really don't know about this."
How high the Nasdaq can go is probably something that everyone who pays a little attention to new technology is curious about at this time.
Compared with March 2000, when the Nasdaq turned to collapse around 5,000 points, this time, even Simon is not sure at all.
In fact, Simon had considered this issue very early.
First of all, we can be sure that the Nasdaq's current high of 6,400 points is still not too out of control.
Because this time, compared to before, the new technology market has more giants like Igret, which still has a market value of US$770 billion. In addition, Tinco Bayer, another company listed on the Nasdaq market, The market value at the close of trading on Friday also reached $321.7 billion.
These two companies, which have never appeared in history, have a combined market value of more than 1 trillion US dollars, which is enough to support the Nasdaq index of 1,000 points.
On the other hand, compared with the Internet industry when the Nasdaq collapsed around 2000, the Internet industry is still in its infancy. Because Simon has used the power of the entire Westeros system to promote it in recent years, this time the Internet industry, whether it is users In terms of scale and enterprise development, we are at least five years ahead of schedule. In some respects, it is not an exaggeration to say that we are ahead of the curve by 10 years.
Take Yahoo! When the Internet bubble burst around 2000, the company's market value of US$100 billion was only a mere two to three hundred million US dollars in revenue. Now, just for the Yigrit family, the revenue has exceeded 30 billion US dollars.
Others, such as Cisco, AOL, etc., are developing far faster than before.
This actually means that compared with the previous bubbles, this time the related industries have real performance support, and the bubble components are far less large than in the original time and space. Therefore, after crossing the previous 5,000 points, Simon himself has no idea how high the Nasdaq can go this time, not to mention others, and can only take one step at a time.