Bab 73: Chapter 73: Lively and Chic
"A few days ago, Walsh Mining Chairman David Walsh was interviewed by the Los Angeles Times, where he expressed unwavering belief in Professor De Guzman's theory. This reporter traveled to New Mexico specifically for this interview."
"During the interview, David Walsh claimed they had discovered a substantial copper vein in the mountains. According to tests, the copper ore is of high quality, and the vein could potentially develop into a massive mine."
"Additionally, Walsh Mining also found gold content in the associated ore, suggesting that the site might be a rich source with exceptional mining value. David Walsh stated that this discovery could position Walsh Mining as a leading mining giant both in the United States and globally."
"The photo accompanying the article shows David Walsh holding ore samples from the vein. He mentioned that once they determine the vein's size and gather sufficient samples, they will submit them for testing at the Ore Testing Center."
The release of this report from the Los Angeles Financial News immediately grabbed the attention of countless investors, particularly those with a keen interest in stocks.
"Is it true that Walsh Mining has uncovered a super-large vein?"
"The reporters went to the mining site and took numerous photos. How could it be fake?"
"With this news, Walsh Mining's stock price is set to soar!"
"It's not just a minor increase; it could skyrocket. Let's buy Walsh Mining shares quickly before the price goes even higher."
Investors rushed to the trading floor, clamoring to purchase Walsh Mining shares. They didn't verify the news's authenticity but were eager to seize the apparent opportunity for profit.
As a result, Walsh Mining's stock price began to climb dramatically. From its lowest point of $0.12 per share, the price surged to $0.16, and just today, it leaped to $0.38, continuing to rise.
Many speculated that if Walsh Mining indeed had discovered a major vein, the stock could soar even higher, potentially reaching several dollars per share.
Hardy observed the situation with satisfaction. He had accumulated 1.5 million shares of Walsh Mining and instructed his trader to keep buying, regardless of the high prices.
The trader hesitated, noting, "Sir, the price is already very high. Buying at this level might not be wise given the unverified news."
Hardy, however, insisted, "Continue purchasing, and if orders slow down, increase the price by 2 cents every two minutes. Don't stop."
The trader complied with Hardy's directive. Hardy's strategy wasn't just about buying more shares; he intended to fuel the frenzy further, driving up the stock price even more.
By the close of trading at 4 p.m., Walsh Mining's stock price had soared to $0.86 per share—a staggering 5.3-fold increase. Such dramatic rises were not unheard of in history, though Hardy knew it was rare.
David Walsh, upon hearing this news, felt a mix of euphoria and disbelief. In one day, his assets had quintupled. Overcome with excitement, he celebrated by planning a lavish lifestyle: buying cars, enjoying fine dining, and even contemplating flying in a private plane.
Despite his excitement, David was aware that the Financial News report was based on exaggerated claims. He was concerned about the long-term consequences of such misinformation. If the report's claims were revealed to be false, the stock price could crash, and he would face significant losses.
However, with the current stock price so high, David decided not to clarify the situation. Admitting the truth would likely lead to a panic sell-off, undermining the stock's value and his assets.
David opted instead to return to San Francisco, leaving the prospecting behind. He planned to borrow money against his rising stock value to enjoy the high life. By the following day, Walsh Mining's stock price surpassed $1, and David decided to borrow $300,000 from a bank.
He called a bank manager he knew, "Hello, Manager Simpson, this is David Walsh. Do you remember me?"
"Of course, Mr. Walsh. Congratulations on your stock's success. What can I assist you with today?"
"I need a loan," David replied casually.
"Certainly. How much do you need?"
"300,000 dollars."
"Not a problem. What will you use the loan for?"
"Consumption."
"Understood. And what about the mortgage?"
"I'll use part of my Walsh Mining shares as collateral," David said.
"That's acceptable. You'll have the money within a day, as we prioritize VIP clients."
David was pleased with the bank's swift service. By the afternoon of the next day, he received the $300,000 cash, having mortgaged a fraction of his shares based on that day's stock price.
He then proceeded to the casino for a night of high-stakes fun, fully enjoying the fruits of his stock market success.
Bab 74: Chapter 74 - Ups and Downs
That evening, David Walsh made a splash at a celebrity party with a beautiful woman on his arm. Reporters, ever eager for a story, swarmed him as he arrived.
"Mr. Walsh, we're from the San Francisco Entertainment News. Can we ask you a few questions?" one reporter inquired.
David, trying to maintain his composure, replied with a confident smile, "Sure, go ahead."
"Can you tell us the size of the mineral veins you've discovered and their reserves?"
David thought to himself, "How should I know?" but managed to respond smoothly, "The veins are quite large, but the survey isn't complete, so I can't provide exact figures yet."
"What about the ore you've dug up? Has it been tested for content?"
David answered, "We haven't sent it for testing yet. We plan to conduct a thorough survey first and then submit samples from various locations to get the most comprehensive data."
The reporter attempted to ask more, but David cut him off, "Sorry, I'm headed to a friend's party. That's all for now."
The next day, the newspaper published the interview, confirming Walsh Mining's discovery of a mineral vein. This news further boosted Walsh Mining's stock price, which had already been rising. The stock surged to around $1.60, but as selling orders piled up, it began to decline.
By the end of the week, Hardy had sold off all his Walsh Mining shares. Starting from an average price of $0.20, he sold at an average of $1.50, making a hefty profit of $3.75 million. Hardy was elated, having achieved a significant windfall.
Hardy had avoided more conspicuous methods like leveraging financial institutions, which could attract regulatory scrutiny. Instead, he opted for a discreet approach, using multiple retail accounts to trade, minimizing his risk of detection.
But just as Hardy settled into his success, a tabloid newspaper in Los Angeles published a damning article: "Walsh Mining May Be Fraudulent."
The report alleged that the ore displayed by David Walsh was pyrite, not copper, and that Walsh Mining had not found any significant mineral veins. The article claimed Walsh had used this deception to inflate the stock price.
The report shocked the market. Shareholders began to panic sell, and Walsh Mining's stock price plummeted from $1.56 to $1.25, eventually stabilizing only after a significant drop.
The Securities and Exchange Commission (SEC) launched an investigation into Walsh Mining. David Walsh, already under scrutiny, faced intense questioning. The SEC discovered that Walsh's claims about mineral veins were baseless. The ore in question was identified as worthless, and Walsh's actions were deemed as fraudulent stock manipulation.
As the investigation unfolded, Walsh Mining's stock price continued to spiral downward. It fell to $0.21 and then crashed to just $0.03 per share. Investors were devastated, witnessing their investments evaporate in a matter of weeks.
Amid this turmoil, Hardy made a modest profit from shorting Walsh Mining before the scandal broke. The dramatic rise and fall of Walsh Mining's stock served as a vivid reminder of the volatility and risks inherent in the stock market.
In the end, Walsh Mining's story was a cautionary tale of greed and deception, while Hardy, having reaped his gains, watched the aftermath with a mix of satisfaction and relief.
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