Chapter 30: Split Warehouse Operation
The following day, Friday, September 5.
Today marks the first day of the fall semester at Xincheng University, but Fang Hong decided to skip his classes.
In the early morning, he made up an excuse with a few of his roommates and left the dormitory, heading toward his residence in Binhu Community. Today was the last trading day of the week, so Fang Hong had one primary goal: to make money.
Quantum Jump, his startup, was on the brink of taking off. The internet industry is known for burning through capital, and once Quantum Jump's products launched, the funding would be gone in a blink. The giants in the market wouldn't give them much of a head start, so Fang Hong knew he had to act quickly. He needed to secure a strong foothold in the market, especially on micro-blogging platforms, before anyone else could catch up.
Fang Hong couldn't afford to sit on the more than one million yuan he currently had. To ensure the project stayed on track, he needed to act fast. His goal was to grow his account balance from seven figures to eight figures before the product's official launch.
The stock market opened at 9:30 AM, and Fang Hong's account had already entered Haili Shares the previous day. This stock opened 3.4% higher today. The price quickly rose by more than 6 percentage points within the first two minutes of the market opening.
But Fang Hong didn't make a move immediately. The stock had reached its daily limit yesterday, and he was confident that it would reach the second board today. He believed there would be a good premium tomorrow, so he didn't plan to hold on for too long.
As the minutes passed, Haili Shares rose by more than 7 percentage points by 9:40 AM before taking a small step back. Fang Hong stayed patient.
At around 10:08 AM, Haili Shares began to attack the daily limit price of 6.79 yuan. Fang Hong immediately sold his entire position at the daily limit price. In that brief moment, the turnover of the stock exceeded 600 million yuan.
With the more than one million yuan he had, Fang Hong successfully moved about 2,500 shares in this transaction.
From entering the market the day before to exiting today, Fang Hong had made a 13.92% profit on this stock over two trading days. The total profit from these two days amounted to 208,800 yuan, and his account balance rose to 1.708 million yuan.
In stark contrast, the broader A-share market was suffering. The market index had a weak opening and, by mid-day, had fallen by more than 3 percentage points, breaking through the 2200-point mark. Experts had previously predicted that the 2,000-point threshold would never be breached, yet there were fewer than 200 points left to reach that level.
"Liquidity..." Fang Hong murmured to himself, not rushing to make his next move. "Given the market's liquidity, it's hard to make significant returns with a single stock."
Yesterday, when he entered Haili Shares, the stock had reached its daily limit, but Fang Hong had only earned a meager 4%. He wasn't satisfied with this.
There were two main reasons for his dissatisfaction: first, his account balance had grown, and second, the market liquidity was growing weaker. If all his funds were concentrated in a single stock, as his account size increased, the returns would get lower and lower.
More importantly, with the increased funds, Fang Hong would soon be listed on the "Dragon and Tiger List." In this era, it was normal to make the list with a few million yuan in the account.
At first, being on the Dragon and Tiger List wasn't a problem, but the longer you stayed there, the more attention you would get. Eventually, it could become a double-edged sword.
Fang Hong was aware that if his reputation grew, everyone would notice his pattern. They would know that he liked to make quick exits from stocks, buying today and selling the next day. The result would likely be that the stock would open lower the following day, and the premium would disappear.
While he didn't mind being listed on the Dragon and Tiger List, Fang Hong knew that his current strategy wasn't the right one. He needed to evolve his approach.
"Let's split the positions for now!" Fang Hong decided. The market index might be tumbling, but there would still be stocks with daily limits. He could still make gains if he diversified his positions.
Within a short period, Fang Hong completed his trades and established positions in three stocks: Feiya Shares (002042), Jiaotong Nanyang (600661), and Aerospace Dynamics (600343).
"It's time to go to the bank," Fang Hong concluded. After confirming his positions, he logged out of the trading software and left the community residence. He headed to the bank.
The previous day, Fang Hong had made an appointment with the bank. At around 11:30 AM, he withdrew 150,000 yuan in cash. Instead of heading back to school, he returned to Binhu Garden Community.
In the afternoon, once the Industrial and Commercial Bureau opened, Fang Hong went there to finalize the registration of Qunxing Capital.
At this point, "Star" controlled two limited partnerships, Zhenxing and Shenxing, which in turn established Qunxing Capital, a 100% owned subsidiary. With this three-tier structure, Fang Hong had successfully completed the top-level design of his capital network.
The next step was to wait for Qunxing Capital to pass the review and obtain its operating license, which would allow them to directly invest in Quantum Jump, providing crucial financing for its development.
Later that day, at around 5:00 PM, Fang Hong returned to the school dormitory. He carried the 150,000 yuan cash with him. As he entered Dormitory 303, he found his roommates, including Xu Jingren, gathered in the room.
"Things are progressing with my career," Xu Jingren was saying. "I've been thinking a lot about it lately, even in class."
Fang Hong could sense that many of his friends were shifting their focus. Gaming wasn't as popular anymore. They still liked playing games, but now their priorities had changed. They had homework to do and were becoming more interested in the booming industry of Quantum Jump.
Xu Jingren continued, "The initial plan is to start with Xiaonei.com." Xiaonei.com would later be renamed Renren.com, which would go on to become China's version of Facebook, eventually succeeding and going public in the United States with a market value of more than 7.5 billion dollars.
As soon as Fang Hong entered the room, his roommates looked up. He walked over to the table and placed a brown kraft paper bag in front of them.
"The money is here. 130,000 yuan." Fang Hong opened the bag and turned it over, revealing thirteen neatly stacked bundles of 100-yuan bills in front of his roommates.
---