Over the past year, a large share of the rapidly booming hedge fund industry had been shadowing Cersei Capital's relentless long bet on the Japanese stock market. If it were confirmed that Simon Westeros had already cashed out ahead of time and everyone stampeded for the exit after him, the result would be nothing short of catastrophic.
After a brief spell of panic, James Robinson gradually calmed down.
Someone in the conference room picked up on a very important point in Noah Scott's account. "Noah, then what about Cersei Capital's Subfunds One through Five as they stand now?"
Hearing this, the corners of Noah Scott's mouth twitched in a fleeting hint of a smile that quickly turned bitter. "That's the key I hadn't been able to figure out until the Daily News article."
Nelson Scott followed up, "You mean 'Westeros Comes, and the Crash Comes With Him'?"
"Exactly." Noah nodded. "'Westeros Comes, and the Crash Comes With Him.' At this point, I think everyone has to admit that guy really does have that kind of impact. There is no way Westeros spending a whole week in New York at the start of October was a coincidence. In the same way, as far as the Japanese stock market is concerned, Westeros is practically a bringer of disaster. He takes one trip to Melbourne and the Japanese market nearly collapses. So ask yourselves, who most wants Westeros gone, and who has the strength to quietly take over all of Westeros Corporation's Subfunds One through Five without a sound?"
"The Japanese government!"
The bitterness on Noah Scott's face deepened. He put down the marker in his hand and returned to his seat at the table. "Yes, the Japanese government. At this point, we can basically be sure that for these last few months, what we've been following isn't Westeros at all. It's the Japanese government."
The conference room fell into a brief silence.
After a moment, someone ventured, "But still, the Japanese market is, well, it is still rising, isn't it?"
Everyone turned to look at him.
The Japanese market had continued climbing for more than three months after Westeros cashed out because most people had been misled by Cersei Capital into staying long. If the truth got out now, it would not be impossible for the Japanese stock market to crash outright next week.
James Robinson picked up the glass of water at his elbow and took a few sips before speaking again. "Noah, if we want to pull out of the Japanese market completely, how long will we need?"
Noah considered it. "If we want to avoid drawing attention, at least two weeks."
Nelson Scott reminded him, "Cersei Capital is still out in front."
"That's what worries me most." Noah glanced at his father. "If I can see this, other people will start to catch on too. Some might even have seen it earlier than we did and already be out."
"Forget about everyone else." James Robinson was now completely composed. "Noah, tell us your plan."
Noah said, "At last Friday's close, the Nikkei 225 index finished at 39,367 points. News that Westeros cashed out early may already have slipped out. The Bank of Japan is planning a second rate hike next month. So one way or another, forty thousand is going to be a turning point for the Japanese market.
"The conservative strategy is to use the next two weeks to withdraw all our capital and lock in our gains. The more aggressive approach is to close out our long positions while at the same time building short positions. That carries a lot of risk, but right now the Japanese market is still overwhelmingly long. It will be easy for us to build up a massive short book. Once the index turns and everyone starts shorting, it will not be nearly so easy to establish those short positions."
"Flip from long to short." James Robinson chose the second option without hesitation, then added, his eyes turning sharp, "Then we look for an opportunity to let it slip that Westeros has already left the field."
...
Simon knew nothing about the discussion taking place among Noah Scott and the others, but the way Cersei Capital's Subfunds Six through Ten had exposed the size of their short bets against North America after the mini crash was, to some extent, something he and Janet had allowed to happen.
Neither Simon nor the Japanese government would ever voluntarily disclose the details of that transaction back in early July.
Still, no secret stays buried forever. If too many people ended up getting skinned alive, Simon would pay for it eventually. By letting a few powerful, sharp-nosed capital players sniff out the truth early and pull out ahead of the crowd, even if the story leaked down the road, the smaller, weaker latecomers who failed to react in time would have no choice but to swallow their losses.
After all, Cersei Capital was an offshore private hedge fund. It had absolutely no obligation to disclose the inner workings of its operations, and there was nothing illegal about its dealings with the Japanese.
You follow the wrong lead, get burned badly, you have no one to blame.
Simon spent the weekend in San Francisco, negotiating a donation to Stanford University.
After several months of effort, Ygritte Inc.'s portfolio of basic World Wide Web patents based on "WWW" technology had been registered in the major countries of Europe, North America and Asia. Test versions of core applications like a graphical browser and web page design software were basically complete. With help from tech companies in which Westeros Corporation held stakes, such as Sun, Cisco and America Online, the hardware side of WWW technology, including servers and routers, was also ready to go.
What they lacked now was a platform on which to test all the technologies Ygritte had developed.
As one of Silicon Valley's main training grounds for talent, Stanford University was undoubtedly the ideal target. Simon planned to donate 10 million dollars to Stanford under the name of the Simon & Janet Westeros Foundation, primarily to upgrade the university's internal campus network.
At this point in time, a one-off donation of 10 million dollars was anything but small change.
However, most of that money would be used to buy equipment and software from high-tech companies in which Westeros Corporation held equity, so in the end it was still being spent on himself. The Simon & Janet Westeros Foundation's donation would help Westeros Corporation secure the corresponding tax breaks, and such a hefty gift would also burnish Simon's public image.
As a generous big-ticket donor, it would be child's play for Simon to slip a few students into Stanford in the future if he wanted to.
All in all, spending this money would kill quite a few birds with one stone.
After the donation ceremony on Monday morning, Simon did not rush to leave San Francisco. He attended Stanford's luncheon at noon, then in the afternoon headed to Ygritte's headquarters on Thurman Street, accompanied by executives from Sun, Cisco and several other companies.
As a rising star that had already begun to make a name for itself in the industry, everyone could see the immense commercial potential hidden in WWW technology that could link not just North America, but the entire world. Sun had already floated the idea of acquiring Ygritte outright. Steve Case at America Online was even more obviously itching to make a move.
Simon of course had no intention of handing Ygritte to any of them. His investments in Sun, Cisco, America Online and the rest were meant to form a complete industrial chain around the internet, so naturally he did everything he could to push cooperation among them.
The meeting on pooling their resources to first roll out a WWW network in California on the West Coast lasted the entire afternoon. The upfront investment was so large and the division of future profits so thorny that they could not hammer out anything too specific for the time being. Even so, when the meeting ended, everyone left with a clear sense of ambitious anticipation.
Toward evening, they all walked out of Ygritte's conference room together and came down to the lobby, where, as usual, they paused to look up and chat about the motto on the wall: "You know nothing."
Since he had to fly back to Los Angeles that night, they did not go out for dinner together.
The Gulfstream IV took off from San Jose Airport.
In the cabin, Jennifer sat beside Simon. "I keep feeling like your expression is a little strange whenever you look at that sentence on Ygritte's lobby wall."
Simon looked up from a packet of MCA documents and smiled. "Don't you think the way I look at you is strange too?"
Jennifer shot him a very harmless sideways glance, then peeked at the papers in his hand. She had, of course, collected them herself. "So your next target is Universal, huh?"
MCA, short for Music Corporation of America, had always been the official name of Universal Pictures' parent company.
Cersei Capital's stash of overseas funds was getting bigger and bigger. If he did not spend it soon, it would only depreciate.
Simon had set his sights on MCA, Universal's parent, a long time ago.
Before this latest mini crash, MCA's share price had held between 45 and 50 dollars. With a total float of close to 100 million shares, its market cap was basically the share price with eight zeroes tacked on. Sony had tested the waters last year, and MCA's chairman, Lew Wasserman, had responded with an asking price of 8 billion dollars, sending Sony scurrying away and obediently refocusing on the second-tier target of Columbia Pictures instead.
After the October 13 mini crash in North American stocks, MCA's share price had already slid to 41.5 dollars by last Friday. Simon knew that after this mini crash, the North American economy would once again slip into a year-long slump, one that would not truly end until the United States scored a resounding victory in the Gulf War.
During that period, MCA's stock would continue to fall, eventually dropping into the 30 to 40 dollar range. By then, Simon would be able to acquire MCA at a price roughly equivalent to the 6.6 billion dollars Panasonic had offered in his memories.
Beyond Universal Pictures, MCA also owned MCA Records, Universal Studios theme park and a bundle of very valuable cable television assets. As long as he swallowed this company smoothly, Daenerys Entertainment could instantly make up for its weaknesses in records, television and theme parks.
In answer to his assistant's question, Simon nodded. "Yeah. I just haven't decided whether to route Cersei Capital's money directly back home yet. You know what kind of tax bill that would mean."
Simon had no real intention of hiding his overseas assets, at least not hiding too much of them.
So Cersei Capital would certainly register its tax obligations with the IRS on schedule. However, under U.S. tax law, as long as the money stayed overseas, the declared taxes could go on being deferred indefinitely.