From legendary short seller to god of American capital

Chapter 310 Rockefeller Jr. hands over $300 million

Chapter 310 Rockefeller Jr. hands over $300 million

Monday, October 5.

Larry arrived at the New York branch of Paine Weber Securities early, because today was the Rockefeller family's day to pay their bills.

Last Saturday, Larry, Mr. Porter, and Citibank President Stillman and Rockefeller Jr. made a secret agreement. The Rockefeller family originally planned to make a forward contract so that, at least on paper, as long as they hadn't returned the 3 shares to Larry, their losses from shorting General Electric wouldn't be reflected, thus avoiding alerting other shareholders.

After all, paying out millions of dollars in one go would severely damage the Rockefeller family's reputation if it became known.

To be honest, the 3 shares of General Electric stock that Larry bought would have been worth $660 million if traded at $220 per share—an astonishing figure at the time. Even the Rockefeller family would have felt a pang of pain pulling out over $600 million at once.

Larry's proposed solution was to sell half of his shares, 1.5 shares, for a total of $330 million.

The remaining 1.5 shares, together with the previous 8000 shares, totaling 2.3 General Electric shares, were temporarily placed in Mr. Porter's Fund's account, meaning they were jointly held by the two companies for the time being.

One advantage of this is that the Rockefeller family doesn't have to come up with $660 million all at once, and Larry doesn't have to sign any forward contracts. Instead, they can choose to close their positions based on the subsequent stock price decline, ensuring that both parties can afford the price.

In exchange, Larry will use the $330 million to buy Standard Oil's subsequent non-public offerings of stock.

At this moment, the Standard Oil stock listed on the New York Stock Exchange only represents the few dozen oil fields and refineries that Rockefeller developed in the early days, while the rest of Standard Oil's vast monopoly assets are not listed.

The company's stock is rarely available on the market. To buy original shares of Standard Oil, one not only needs to be rich, but also needs to have a close relationship with the Rockefeller family.

Larry did not cash out all his shares because he wanted to use this opportunity to acquire a stake in Standard Oil, the core asset of the Rockefeller family.

Without this opportunity, even if he had millions of dollars to invest, the other party wouldn't pay any attention to him; but by taking advantage of the opportunity to jointly hold these shares, Larry could buy Standard Oil stock, not only receiving annual dividends but also holding these original shares to wait for them to appreciate.

Of course, Rockefeller's Standard Oil will eventually be broken up, but so what? After it's broken up into various oil companies, the stock value will actually increase.

Larry's proposal was a win-win-win situation: the Rockefeller family saved half the money, paying only to allow Larry to participate in the subsequent issuance of Standard Oil stock; Mr. Porter's fund, holding the stock on his behalf, also gained the right to receive General Electric's stock dividends and the holding fees; and Larry, on the surface, was only interested in Standard Oil's dividends, but secretly, his real purpose was to acquire Standard Oil stock, gradually become a major shareholder, and then take the opportunity to enter the oil industry.

Of course, Larry knew that this process had to be done slowly—it was crucial to avoid alarming old John D. Rockefeller, who was hiding behind the scenes, as that would be extremely dangerous!

At least until old Rockefeller meets his maker, I will make sure to act gently and harmlessly!

The three parties agreed that on Monday, the Rockefeller family would pay the $1.5 million consideration for the purchase of 330 shares.

It was only 8 a.m., and although the whole of New York City was already bustling with activity, for brokerage firms, they wouldn't be back until 9 a.m.

Preparations for today's opening activities only started at 10 o'clock, so there weren't many people in the business department. Mr. Porter greeted himself and went back to his office to sort out fund-related matters.

Larry stood behind the huge glass curtain wall, looking down at the street, the sunlight warming him.

Before long, two ornate carriages stopped one after the other on the street in front of the business office.

Larry's eyes lit up when he saw the Citibank logo on the carriage.

Bodyguards and assistants disembarked from the carriage one after another, but then John D. Rockefeller Jr. stepped down. He had already seen Larry behind the glass wall and raised his hand to salute him!

Larry was a little surprised, but he still rushed out and extended his hand to Rockefeller Jr., "Mr. Rockefeller, why did you come in person?"

John D. Rockefeller Jr. shook his hand, smiling, and said, "I must present your money to you personally!"

"Oh, okay! Please come in—" Larry gestured for the sales department to enter.

The two entered the securities company lobby and took their seats. Rockefeller Jr.'s assistant and bodyguard dismissed the sales staff and served them black tea.

"Where is Mr. Ford, the inventor of the automobile? Has he arrived?" Rockefeller Jr. looked around but saw no one else.

"Oh, I'm sorry! His car broke down and won't be fixed anytime soon. He took the train back to Boston last night to find some parts," Larry explained to Rockefeller Jr. with a regretful expression.

The other person showed a slight look of disappointment, but still gestured to his assistant to take a small leather suitcase.

"Here are $330 million in bank drafts from the National City Bank of New York!" Rockefeller Jr. opened his briefcase, showing Larry a thick stack of bank drafts, and continued, "Mr. Livingston, to be honest, I'm envious of how fast you make money! A brilliant mind plus first-rate luck—God has been incredibly generous to you!"

Larry quickly sat up straight and said with the piety of a Puritan, "Thank God—but I'm just making some speculative money, just like you said, it's all luck."

Rockefeller Jr. smiled and pushed the suitcase over, placing it in front of Larry.

Larry smiled, counted the bank drafts, took out 30 yuan, and returned it to him.

Rockefeller Jr. raised an eyebrow. "What do you mean by that?"

Larry held up a thick stack of promissory notes and patted it in the air. "I'll take the $300 million; the remaining $30—sir, would you be interested in doing some academic research together?"

"Academic? Research?" Rockefeller Jr. was a little confused.

Larry smiled slightly. "I can see that you are very interested in Mr. Ford's cars. I think this interest is not just about a new machine, but also about another kind of association based on the family business. After all, the gasoline produced by oil companies is now just thrown away as waste. If the automotive industry can be vigorously developed, then oil companies will have another way to make money."

Rockefeller Jr.'s eyes widened. He straightened up and nodded to Larry in acknowledgment, "That's right, I've also thought that if cars have a future, then the large amount of waste gasoline produced by the company will have a market."

"But gasoline still has many problems, such as storage and transportation—this stuff is very prone to explosion; in addition, according to Mr. Ford, gasoline now frequently causes knocking problems—these technical problems concerning the future application of gasoline need to be solved by scholars and experts. So, I propose that the two of us jointly establish a research institution, which would aim to solve the gasoline problem and promote the utilization of gasoline waste." Larry explained while looking into Rockefeller Jr.'s eyes.

There was a light in the other person's eyes; clearly, he had already thought about similar questions.

Larry had already noticed that Rockefeller Jr. was very interested in cars, so he took the opportunity to suggest that they establish an academic research institution to work together to solve the technical problems related to gasoline, thus building a closer cooperative relationship!

John D. Rockefeller Jr. thought for a moment and nodded in agreement. "That's a fantastic suggestion! Besides, there are still many technical problems in the existing oil refining process—I've heard my uncle say that if we use a better refining process, kerosene could yield 15% more and gasoline 5% more, but right now it's all theoretical, and the relevant technology hasn't been implemented yet!"

"Yes! A collaborative research institution. We can recruit relevant scholars and experts from various universities in the United States together. After the research results are produced, we can share them. If Standard Oil needs them, we can also sell the technology to Standard Oil for a fee —" Larry explained with a smile, but his eyes were always fixed on the other party.

Rockefeller Jr. kept thinking but also kept nodding. After Larry finished speaking, he looked up at Larry and said, "Very good! Your proposal is a win-win situation. An independent research institution can solve problems such as gasoline storage and transportation, and combustion. If gasoline can be used in the future, these are essential preliminary technologies. Mr. Livingston, I agree with your proposal."

Larry chuckled and pushed the $30 bank draft forward. "Your family has extensive connections at various universities, so why don't you find the right people for this? I'll provide the money first, and I'll help out when needed, how about that?"

John D. Rockefeller Jr. looked at the $30, his face slightly flushed. "Um—Mr. Livingston, I have to tell you the truth. Due to the failure of this investment, I may not have enough money to help you establish this research institution for the time being."

Larry understood after the other party explained.

John D. Rockefeller Sr. was very strict with the company's money, and he was the same with his son. After a failed investment, Rockefeller Sr. was very unhappy and reduced the amount his son could invest from the family trust. Therefore, John D. Rockefeller Jr. could only contribute around $100,000 to partner with Larry in establishing this research institution.

In other words, Larry will have to be the major shareholder in this situation.

Larry agreed without hesitation!

"Let's get started! Mr. Rockefeller, time waits for no one! I have some business to attend to out of town this week, so take the money and start setting up the organization. I'll be back in New York next week, and you can let me know if there's anything you need then." After saying that, Larry smiled at John D. Rockefeller Jr. and continued, "Your father lit up the world with kerosene! And you can power it with gasoline."

Rockefeller Jr. thought for a few seconds, then smiled and said to Larry, "Okay—so, shall we sign a temporary contract or—"

"No, no! John—well, please allow me to call you that, we hit it off right away! Besides, who are you? You are the sole heir of the Rockefeller family, do you think I don't trust you? You take the money and use it first, then we can write up the joint-stock company contract after we set up the organization—there's no rush! But you also need to show your father that you have the ability and vision to do things, and that you are worthy of being his successor!" Larry said with a smile.

Rockefeller Jr. hesitated for a moment, then took the $30 bank draft and handed it to his assistant.

"Okay, Larry! Let's work together, and may God bless us." Rockefeller Jr. looked at Larry and said solemnly.

After John D. Rockefeller Jr. left, it was Samuel Sachs, another boss at Goldman Sachs, who came to visit him.

The man maintained his憨憨的笑 (simple and honest smile), speaking in a deep, muffled voice, "Mr. Livingston, Henry told me that you're going to Rochester to handle all the acquisition work. Can I help you?"

Larry smiled and invited him to sit down. Instead of rushing into business, they chatted about everyday things first. After they had gotten to know each other well, Larry asked, "Mr. Sachs, I imagine Henry has already told you that our target is Bausch & Lomb, and we've already made some preparations—I'd like to hear the opinions of professionals!" Larry's underlying meaning was clear: since Goldman Sachs is professional and can provide services, then show me why you deserve to earn my service fee.

Sachs adjusted his thick-rimmed round glasses and said seriously, "Bausch & Lomb is a company heavily reliant on licenses from Zeiss. Their relationship with Zeiss is crucial. We can exploit this weakness to create public opinion in the newspapers, such as reports like 'German Craftsmen Monopolize Technology, Hindering American Optical Progress,' to incite xenophobic sentiment!"

Larry's mind went blank when he heard the suggestion!

This...this isn't right, is it? I just wanted to ask Goldman Sachs for some financial advice and maybe discuss the service fee for helping with the acquisition of Bausch & Lomb, but this guy actually—

He had initially thought that the head of Goldman Sachs, who appeared simple-minded, was also very serious and rigid after several meetings. He never expected that even a casual suggestion from him would be such a treacherous scheme as "inciting xenophobic sentiment among the masses."

My goodness! You really can't judge a book by its cover.

Larry remained silent, thought for a moment, and then said, "That's possible, but the problem is, isn't it wrong to just incite xenophobia?"

Sachs nodded, admitting, "It's definitely not good enough! We can secretly contact their chief lens grinder through the German immigrant community, promising him a high salary plus shares in the new company. That way, we can work both ways. With external public pressure and internal employee instability, we can intensify the pressure on Bausch & Lomb's management to comply!"

Larry looked at the saxophone, his eyes somewhat vacant.

I just said that stirring up xenophobic sentiments was bad, and I was trying to tell him to come up with a more civilized idea. But this guy took it as "we need to increase the dosage" and came up with an even more vicious plan!

He looks like Zhang Fei, but he's actually Jia Xu!

Larry was both amused and exasperated.

After thinking for a moment, Larry smiled and said to Sachs, "How about this—take a few of your capable assistants, and we'll go to Rochester together tomorrow. As for what to do once we get there? We'll see how things go. I'll cover all the travel expenses, including food, lodging, and transportation. If I need your help, I'll pay you accordingly for any consultation or services you provide."

"Yes, sir!" Sachs remained serious as he stood up to say goodbye to Larry. "We'll be at the train station at 10 a.m. sharp tomorrow! Don't worry, Goldman Sachs is very fair; they charge you for what they do, and they won't take a penny more than what you pay for."

Larry stood up as well, but then he remembered something. He took out his checkbook from his pocket and wrote an $800 check with a pen. "This is Mr. Goldman's service fee! I forgot to give it to him last time."

Sachs took the check, looked at the number with suspicion, frowned, and asked, "Sir, may I ask what kind of business this is? Is it going through the company's accounts or his personal income?"

Larry thought about it. This $800 was the reward that Goldman had told him last time: the president of Citibank was backed by the Rockefeller family.

"It should be considered a company matter—that's his answer to my inquiry," Larry replied.

Sachs's face lit up with a slight smile, then he said earnestly, "That's wonderful! I'll deposit this check into the company account as his performance bonus for this month. Later, around the New Year, we'll distribute it to him based on sales volume and shareholding!"

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