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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