Some might wonder why, if this is a plot for the oo network, it suddenly involves Shell Petroleum. Is there any relationship between the two?
Believe it or not, there is indeed a connection: the stock prices of Shell Petroleum and the oo network have suddenly become identical.
It seems that after falling several tens of billions of dollars from its peak market value, oil is now worth $480 billion. Shell and the oo network have the same total share capital, which is 10 billion shares.
This leads to Shell Petroleum's stock price, like that of the oo network, currently hovering around $48 per share.
Meanwhile, those who managed to escape Shell Petroleum's pitfall at the earliest opportunity were primarily financial institutions, and even then, they were the ones with less sharp instincts.
After all, the truly perceptive financial institutions had already completely offloaded their shares over several months before Shell Petroleum's collapse. Goldman Sachs, for example, had completely exited by November.
Only those with poor information, still believing Shell Petroleum to be a quality stock, remained trapped and only managed to sell immediately after the annual report was released.
However, financial institutions share a common trait: unless they encounter an overall market downturn or a financial crisis, their funds cannot remain idle. Instead, they must be immediately spent, invested in various products, and used to bet on the next wave of stock price growth.
After all, even if future investments continue to incur losses, it is the investors' money that is lost, and the institutions themselves bear no losses.
But if they win the bet and make a profit, the institutions can take a commission. Only a fool would stop investing.
However, investing in stocks is not an easy task. While there is a lot of capital in the stock market, no single stock can withstand the impact of billions of dollars. If they invest in only one company they favor, it is inevitable that the company's stock price will skyrocket, and they will be left holding the bag at a high price.
The best approach, of course, would be to identify a dozen or even dozens of companies and invest separately. But how can so many suitable companies be found in such a short period?
Therefore, the oo network, whose stock price is currently almost identical to Shell Petroleum's, immediately attracted the attention of these institutions that had just cashed out.
In the eyes of these funds, the oo network was a perfect substitute for Shell Petroleum.
First and foremost, their profitability was the same at their peak, and the oo network's profitability was even more terrifying, with $4 billion in profit compared to Shell Petroleum. Isn't the oo network stronger than Shell Petroleum?
Although the oo network company has virtually no tangible assets, no oil fields, no real estate, and not even any inventory, this means that the company has almost no tangible assets to support its stock price.
This was considered a significant weakness in the investment market before 2010, as it meant that once the oo network began to collapse, it would crumble into nothingness instantly. It was not impossible for it to go from $500 billion to zero overnight, given that the oo network had no assets.
Shell Petroleum, on the other hand, had so many oil fields, gas stations, various properties, and numerous companies along the entire oil production chain. These were all genuine, hard assets.
Even in the event of a catastrophic crash, with these fixed assets as support, the stock price would not fall below $200 billion, as its fixed assets were readily apparent.
Therefore, even though Shell Petroleum's profitability was no longer as good as the oo network's, no one truly believed that Shell Petroleum's value would be lower than that of a suddenly emerging internet company.
However, when those financial institutions urgently analyzed the reasons for Shell Petroleum's collapse, they discovered that the reason for Shell Petroleum's terrible massive losses was the oil fields it had invested in in the Middle East.
Some say that oil fields are a good thing. Oil is buried underground, and once you buy it, it's yours. You can't lose money no matter what.
But the problem is that these oil fields were purchased with borrowed money, not Shell Petroleum's own funds. That's one thing, but what's more serious is that the two countries where the oil fields are located are now at war, and a large number of extremists are attacking the oil fields, while also shouting about revenge against Westerners.
Finally, the oil fields, which were halfway through construction, were attacked by a large number of rockets, resulting in the destruction of all previous oil field facilities. Moreover, one of the oil fields experienced a severe blowout, and Shell Petroleum is now struggling to figure out how to cap the well. This oil field has been gushing for half a month, and it is said that large swathes of land around it have turned into heavily polluted black land. Some environmental organizations in the world are already planning to sue Shell Petroleum for environmental damages.
Even more critical is that the fourth quarter is when the first repayment for the newly built oil fields is due. The initial payment amounts to a staggering $12 billion, with $12 billion to be repaid annually for the next ten years.
This is what was previously mentioned as Shell Petroleum's "plucking flowers to cover its eyes" method of refreshing profits. Now it's time to repay the money.
After understanding the reasons behind this, a new idea emerged in the minds of these financial institutions: perhaps internet companies with no asset burdens are stronger than traditional companies with significant asset burdens!
First, fixed assets may retain value, but they also require huge maintenance costs and various taxes, which lead to high costs for physical assets.
For instance, Shell Petroleum's $200 billion in physical assets incurs about $10 billion in annual maintenance costs. Meanwhile, the largest physical costs for the internet are salaries and electricity. There are no enormous maintenance fees or taxes for these massive physical assets.
Second, the true value of an internet company lies in its users and traffic. This may seem ethereal, like a mirage that can vanish overnight.
But is that possible?
That is also impossible, because in reality, these users themselves cannot disappear. As long as their user data is held by the company, the company can retrieve these users at any time.
As for users abandoning an internet product and that product instantly losing all its users – that is also impossible because users themselves cannot leave those established internet companies.
Take Yahoo, for example. Although user defection has occurred for five years, Yahoo is still the world's largest portal website, with the most users among similar internet services.
Or Microsoft. Many people complain about Microsoft's operating system, but no operating system has ever been able to replace Windows.
Or consider the future Tencent and Alibaba. Both companies are universally criticized on the internet, especially Tencent. It's likely that no one in China hasn't cursed Tencent.
Yet, Tencent remains the undisputed king. How many people curse Tencent while using QQ, browsing WeChat, or playing Honor of Kings or League of Legends? These are all examples of "saying one thing but meaning another."
Therefore, a majority of financial institutions have subtly formed a new perception: internet companies may have better market value preservation capabilities than traditional companies.
This is a conclusion that Wall Street has always debated, and no one knows for sure whether physical enterprises or internet enterprises are stronger in terms of value preservation. However, based on today's comparison, the oo network is clearly much stronger than Shell Petroleum.
Thus, when the billions of dollars escaping Shell Petroleum urgently needed to find their next investment target, they naturally turned their attention to the oo network.
Looking at the stock price, it was $48 per share.
Good heavens! If Shell Petroleum, which only earned a few hundred thousand dollars a year, could have a stock price of $48 per share, why does the oo network, which earns $44 billion a year, also have a stock price of $48 per share?
Consequently, some more impatient institutions decisively poured all their funds into the oo network. After all, hesitating for another second might cause the oo network's stock price to soar.
As a result, under such impact, the oo network's stock price did indeed rise to $49.50.
This made the remaining hesitant funds anxious. After all, there were not many stocks left below $50, and delaying any further would increase their costs.
So, the next financial institution to act directly cleared out all the stocks below $50 per share. As for stocks at $50 per share, there were plenty; they didn't have to worry about not being able to buy them. After all, there were still about 1 billion shares at $50 per share waiting to be sold, which were the original shares issued by the oo network that no one had bought yet.
However, as the oo network's stock price climbed back to $50, and with numerous institutional funds eagerly watching from outside, it was clearly impossible to buy at a price lower than $50 any longer.
After all, institutions holding stocks at this point would not sell their shares at a low price. Even a fool could tell that the stock of Jiangnan Group was about to take off.
Ultimately, some institutions resigned themselves to it and began to buy the $50 shares in large quantities, with the number of sell orders decreasing.
Meanwhile, more funds continuously flowed out of Shell Petroleum. Seeing that the market was buying the oo network, they followed suit due to the herd mentality.
Initially, some people mocked these institutions, fearing that with a billion shares on the market, no one could possibly buy them all.
However, after a few dozen minutes, someone suddenly discovered that the oo network's stock price had jumped again, from $50 to $50.12.
At this point, many anxiously began to check the market order details. The previous order of up to 1 billion shares, worth $50 billion, had actually been completely bought out. The oo network had indeed issued all of its equity at the price of $50 per share.
And at this moment, the oo network's stock price had entered an upward trend, which even ten oxen couldn't pull back.