As the dot-com bubble burst, stock prices plummeted, and those investment banks that had previously been "stubbornly" optimistic about Nasdaq were stunned.
Wall Street has no shortage of smart people, but it certainly doesn't lack those who are headstrong and opinionated!
"Hold on!"
"Hold on!"
"I refuse to believe that this market is truly doomed!"
"The internet represents the future!"
These investment banks, still firm in their belief in the market, had all heavily invested in Nasdaq. Even as stock prices plummeted, causing them huge losses, they had to, and could only, go all in.
Bamorey Investment Bank.
It was a small investment company on Wall Street, founded in 1995. Its initial investments were in the internet industry, and after several years of development, it grew into an investment bank with 2,000 clients and over $500 million in assets under management.
"Sell off?"
Scott, the president and major shareholder of Bamorey Investment Bank, scoffed, "Now, internet and tech stocks across the US are falling, and the extent of the decline has exceeded our imagination. But if we sell off all our stocks now, will we truly be safe?"
"..."
The executives of the investment bank all remained silent.
After a long while, an executive sighed, "Yes, even if we sell off all our stocks, the massive losses are still something our Bamorey Investment Bank cannot afford!"
The tragedy of small investment banks.
The five major investment banks and some of the top medium-sized investment banks, even if they sold off all their stocks and incurred significant losses, could withstand it due to their enormous capital volume.
In the words of Sifford, Vice President of Investment at Merrill Lynch, "At worst, it's just one or two years of wasted effort. Merrill Lynch can afford the loss!"
Indeed, an entity of Merrill Lynch's size could afford the loss!
However, those small investment banks that had gone all-in on internet stocks could not afford such losses.
"Hmph!"
Scott, the president of Bamorey Investment Bank, snorted, "Even if we sell off all our stocks now, the company's bankruptcy is inevitable. Since that's the case, we'll fight to the end."
He had no choice!
Selling stocks sounded easy, but it still led to bankruptcy. Therefore, he could only go down this path to the bitter end.
"What if... a miracle happens?" Scott could only pray to God.
At the same time.
Looking across Wall Street, there were definitely not a few investment banks that, like Bamorey Investment Bank, chose to go down this path to the bitter end and hold on.
"If we don't fight, we're sure to die!"
Many people gritted their teeth and roared in their hearts.
If they had a choice, they would absolutely sell off these "junk stocks" immediately. But alas, they had no choice!
They weren't fools; on the contrary, each of them understood the stakes. It was still the same old saying: they couldn't bear the losses caused by selling off stocks, so they could only grit their teeth and hold on.
"Only by stabilizing Nasdaq's decline can we have room to counterattack. If stock prices fall further, we'll all be doomed."
All-out effort.
"You sell your stocks, and we'll take them."
"Take as much as you can get."
"The downward trend in stock prices must be curbed!"
...Gale Capital.
Andy Cherop looked at the stock price trend and immediately said to Kyle, "Boss, these guys really chose to hold on to the bitter end. In the past half hour, Nasdaq's stock price decline has actually been curbed."
Kyle looked at Nasdaq's trend and couldn't help but laugh.
Curbed?
Could they curb it?
The five major investment banks were selling off stocks on a large scale;
European and Asian capital were also retreating urgently;
As for 75% of American stockholders, they were even more panicked, wanting to dump all these junk stocks.
"Under such a general trend, can they hold on?"
Kyle laughed, "Today, if these stubborn guys can't come up with $200 billion, then whatever they say is useless. But... if they really had that much cash reserve, they would never hold on; they would have probably retreated long ago."
Andy Cherop nodded heavily.
A lot of money meant they could afford the losses.
But the most realistic thing now was that they didn't have much money!
As expected.
Facing the surging tide of the dot-com bubble, how could their desperate efforts as small and medium-sized investment banks resist it? The falling stock prices were only curbed for less than an hour before plummeting again.
No one could stop it!
The Federal Reserve and the US government also launched emergency bailout plans, investing a large amount of capital, hoping to salvage the Nasdaq storm.
But, was it useful?
It was useless!
These funds invested in the stock market bailout merely caused a few ripples, and then there was nothing left.
"It's over, Nasdaq can't be saved!"
Bailout?
How to save it?!
In early 2000, Nasdaq had over 900 listed companies. If measured by profit and loss data and industry scale, their combined "actual" market value was only over $5 trillion.
But, what about before the crisis erupted?
The combined market value of all Nasdaq listed companies had brazenly exceeded $20 trillion.
The degree of falsehood was as high as 4 times.
The amount of speculation and inflated value within was simply shocking.
Who could withstand such a huge capital gap?
No one could withstand it! Under this surging tide, any obstacle in its path would be ruthlessly destroyed.
Falling!
Falling!
Still falling!
The bursting of the dot-com bubble could no longer be stopped by anyone!
"It's completely over!"
"My investment bank... my investment bank... it was the fruit of decades of my hard work, but today, it's all lost in one morning!"
"A way out? What a load of crap! Even if I sell off all my stocks now, what's the result? I can't afford to pay back my clients!"
"Hahaha, what's the point of saying all this now? Now, it's either die or run away, there's no other choice!"
In less than a day, many people went mad.
Three days ago, the Nasdaq index had reached an all-time high of 5048 points, but today, the Nasdaq index was even below 4000 points.
Heaven and hell, just one step away!
In the blink of an eye, it was already 5 PM that day, and it was time for Nasdaq to close.
Many people stared blankly, fixed on the horrifying stock prices.
This day was worth remembering.
Today, 500 Nasdaq-listed companies went bankrupt, 40% delisted, 80% of companies saw their stock prices fall by over 80%, and over $3 trillion in market value evaporated.
Widespread lamentation would not even begin to describe a fraction of today's events.
"Phew~"
Kyle saw the closing and let out a sigh of relief, asking, "Andy, how much did we make shorting today?"
Upon hearing this, Andy Cherop immediately suppressed his excitement and said, "Boss, we shorted several companies today and made a full $200 million."
"That much?!" Kyle's pupils contracted.
Even though Kyle was prepared, he couldn't help but be startled.
Buddy, this was $200 million, not 200 million Vietnamese dong!
Andy Cherop laughed, "This is still because we weren't fully prepared. Otherwise, given today's situation, by expanding our gains, we could definitely have made even more."
Undoubtedly, Gale Capital became the big winner in today's stock market.
Similarly, the dozens of investment institutions that, like Gale Capital, chose to sell off their stocks early also made a huge profit today, each one stuffed to the brim.
"Hold your breath, this is just the beginning. There will be plenty of opportunities to make money later," Kyle narrowed his eyes, feeling great.
Indeed, in the coming period, shorting the stock market had great potential; describing it as "gold everywhere" would not be an exaggeration.
Subsequent operations basically no longer required Kyle to worry and exert effort. Andy and the others' professionalism meant Kyle didn't have to concern himself; they could do it very well, even better than Kyle doing it himself.
Nasdaq's dire situation only recovered after 2006. And then, damn it, there was the subprime mortgage crisis.
A troubled America!
"Eh?"
Suddenly, Kyle thought of someone and said, "Andy, do you know how Henry Yugenberg and his Hurricane Investment Company are doing today?"