In the 1940s, information spread much more slowly than it does today, and newspapers were the primary source of news.
At this moment, David Walsh, who was in New Mexico, had not yet received the news about the drastic drop in Walsh Mining's stock price.
A shareholder attempted to reach David Walsh to discuss measures to counteract the loss, but the assistant informed him that David was in the mountains with the prospecting team.
The stock price of Walsh Mining continued to decline over the next few days. On the second day, it dropped to 13.8 cents per share, and by the third day, it had further fallen to 12.1 cents per share.
Shareholders were increasingly anxious and managed to contact David Walsh on the third night. David was taken aback by the news of the stock price plummeting.
"The newspaper's report about Professor De Guzman's mineral vein theory being incorrect seems to have triggered the drop in our stock price," David exclaimed.
"David, you must find a way to prevent further declines," urged the second-largest shareholder, who held shares just behind David's. "If you fail to manage the company properly and ensure shareholder profits, I will call for a shareholders' meeting to replace you as chairman."
David Walsh, already frustrated and exhausted from his months of unfruitful prospecting, was now faced with mounting pressure. He felt helpless, knowing that unless a major discovery was made soon, the company's stock price would continue to drop.
Recalling his previous contact with the Los Angeles Times, David decided to reach out to them again, hoping that a clarifying report might mitigate the damage. He called them, proposing an interview to discuss the true state of Walsh Mining.
The Los Angeles Times, intrigued by the offer, agreed to the interview.
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Meanwhile, Hardy had stopped shorting Walsh Mining stock and began quietly acquiring shares. He had previously shorted the stock at $0.31 per share, and now, with the price down to $0.12 per share, he was preparing for a significant profit.
With his 5x leverage, Hardy anticipated making $500,000 from the drop. His strategy involved buying large quantities of Walsh Mining shares to capitalize on the potential rebound.
By the end of the day, Hardy had accumulated over 400,000 shares, which helped stabilize the stock price. Over the following days, he continued to buy more shares, raising his total to over 1 million.
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One day, two reporters from the Los Angeles Financial News arrived at the mining area to interview David Walsh. David, eager to refute the negative reports, welcomed them with a mixture of hope and desperation.
David was agitated when the reporters mentioned the negative report about Professor De Guzman's theory. "Why did you claim that the theory is wrong? It's purely speculative," he argued.
The reporters, maintaining their professionalism, asked if David had made any significant discoveries. David, who had found only pyrite and no substantial mineral veins, decided to deceive them.
He showed the reporters a pile of rocks and held up a piece of pyrite, pretending it was copper ore. He claimed that the presence of copper ore indicated the potential for valuable mineral veins, including gold.
The reporters, unfamiliar with mineral identification, took numerous photos and recorded David's optimistic statements. David boasted about the potential for Walsh Mining to become a major player in the industry.
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Days later, David eagerly awaited the publication of the Los Angeles Financial News report, hoping it would boost the company's stock price. When the report was finally released, David was stunned by its content.
The article, accompanied by a color photo of David grinning with the pyrite, exaggerated his claims. It suggested that Walsh Mining had significant potential and implied that the stock price was undervalued.
David, unsure if he had said everything as reported, watched as the stock price began to recover slightly. The power of media manipulation, it seemed, was strong enough to impact investor sentiment.
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Hardy, who had been discreetly acquiring shares throughout this period, continued to monitor the situation closely. With the stock price showing signs of stabilization and potentially rising, he prepared for his next move.
He had successfully executed his plan to manipulate Walsh Mining's stock price and was ready to leverage his position for further gains. The financial game was in full swing, and Hardy was at the center of it.