Chapter 22: The Ambiguous Market I Desire, The Discontented President Zhang

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Upon hearing this, Yan Fei furrowed his brow and asked in a deep voice, "Manager Zhang, can someone who works on email really develop a good social app?"

Zhang Song smiled and replied, "President Yan, email is also a type of social software, just with a stronger work-oriented nature. Whether it can be done, we’ll only know by trying. Besides, there’s no one more suitable than Zhang Xiaolong right now."

After their conversation, Yan Fei immediately decided to go to Yangcheng with Zhang Song to meet Zhang Xiaolong. After a two-hour drive, they arrived in Yangcheng around noon and invited Zhang Xiaolong out for lunch.

Yan Fei’s youth surprised Zhang Xiaolong somewhat, but his professional demeanor made the atmosphere at the table pleasant. They chatted happily while savoring Yangcheng’s local cuisine.

After the introduction, Zhang Song’s task was complete, leaving Yan Fei and Zhang Xiaolong to discuss cooperation in a private room. As their conversation deepened, Zhang Xiaolong realized Yan Fei was truly a kindred spirit.

With Yan Fei’s additions, Zhang Xiaolong’s somewhat immature ideas on mobile social software became increasingly refined. They grew more and more in sync, feeling as if they had found a lost brother.

Yan Fei looked at Zhang Xiaolong seriously and said, “Brother Long, I sincerely invite you to start a business with me and enter the mobile social field. This area is a blank slate globally, with only a handful of small companies that have yet to make a mark—and they’ve gone off track. Together, we can surely carve out a realm in this future trillion-yuan market.”

Zhang Xiaolong pondered for a moment, then said seriously, “Mr. Yan, I agree with your perspective. As for investing in this market, what are your thoughts? We can discuss that first.”

Yan Fei immediately responded, “I plan to invest 100 million yuan to establish a company with a registered capital of 100 million. I will grant you 10% of the shares free of charge. Of course, after future financing, shares will be diluted accordingly. Your annual salary will be five million yuan, and we will set up a 20% equity incentive pool that won’t be diluted by financing. When the company eventually goes public, you will hold at least 30% of that incentive pool.”

Hearing this, Zhang Xiaolong was deeply impressed by Yan Fei’s boldness. Such terms were perhaps unparalleled worldwide, and it was very likely that Zhang Xiaolong would become the company’s largest individual shareholder after Yan Fei.

Comparing this with his current 3 million yuan annual salary and a job he didn’t much enjoy, Zhang Xiaolong felt a surge of entrepreneurial impulse. He said resolutely, “President Yan, your boldness is admirable. If I hesitate now, it would be ungrateful.”

Both men smiled knowingly—a heroic camaraderie blossomed between them. They immediately began discussing company details, going over everything thoroughly until late at night.

The next day, Yan Fei left Yangcheng, entrusting all matters to Zhang Xiaolong. They had signed all agreements, and once Zhang Xiaolong registered the company, Yan Fei would transfer the 100 million yuan to its account. Zhang Xiaolong would serve as CEO, Yan Fei as chairman. Zhang Xiaolong would oversee all operations; Yan Fei would handle financing and strategic guidance.

Back home, it was already 10 a.m. Yan Fei quickly checked the CSI 300 index and saw it had opened much lower at 3210.85. It had since fallen below 3100 to 3051.46—a steep 5.52% drop from yesterday’s close.

A drop this sharp in just half an hour stunned Yan Fei. Although he had anticipated a decline, the severity exceeded his expectations.

Watching the market, Yan Fei observed bears placing large sell orders one after another, forcing the bulls back and driving the price down further. Trading volume surged, reaching over 30 billion yuan.

At 10:20 a.m., the CSI 300 index dropped to 3024.58. Bearish and bullish momentum began to balance. Yan Fei felt the market wouldn’t fall further.

Without hesitation, he immediately closed out his short positions—400 short contracts sold at once—pushing the index up to 3032.45. But bears struck back fiercely, dumping a massive 1,000-contract sell order that swallowed Yan Fei’s closing order and pushed the index down to 3019.12.

Seeing this large bearish order, Yan Fei was unfazed and even sneered, muttering, “A last desperate struggle. No way it can wipe out three days’ worth of gains. At 10:30, the bulls will launch a strong counterattack.”

Defying the bears, Yan Fei quickly placed a 500-contract long order, pulling the index up to 3026.48, while attentively watching for further bearish attacks.

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After switching from shorts to longs, Yan Fei’s holding value reached about 68.04585 million yuan, with an average long price of 3024.26. He still had a floating profit of 16.27 million yuan.

He quickly switched screens to check the Shanghai copper futures contract 0912. The market was opening flat, oscillating sideways for over an hour, with highs at 49,500 and lows at 49,010. Trading volume had increased significantly from yesterday, but the market was calm, with no intense battle between bulls and bears.

After watching for over ten minutes, Yan Fei felt today would likely be a day of sideways trading, losing interest in monitoring that market. He switched to the rebar futures contract 0912.

Looking at the green charts, Yan Fei relaxed. The opening price was 4,263 yuan per ton, now down to 4,240, trending further down. He estimated the closing price would be near 4,230.

Thanks to the drop in rebar futures prices, Yan Fei’s floating loss of over 50 million yuan was not only erased but turned into a floating profit of several tens of millions. This was the thrill of futures trading—one moment in heaven, the next in hell.

Suddenly, Yan Fei remembered something and called his mentor. Once connected, he said, “Uncle, I urgently need funds today. Can I withdraw four million yuan from my Huaxin Futures account right now?”

Li Feng replied gravely, “Funds settled today won’t be available until tomorrow, as the trading system hasn’t cleared yet. I’ll lend you four million. Submit an application, and tomorrow the amount will be deducted from your account.”

After hanging up, Yan Fei quickly sent the application. Within ten minutes, four million yuan was credited. He immediately transferred the investment funds to Ele.me’s corporate account with a note.

After transferring the funds, Yan Fei chatted briefly with Zhang Xuhau, learning that Ele.me had expanded beyond campuses and started covering some office buildings in Shanghai, with daily orders exceeding a thousand.

Satisfied with the progress, Yan Fei encouraged Zhang Xuhau to boldly expand the market, not fearing costs. The goal was to cover all of Shanghai by the end of September and push daily orders beyond ten thousand.

Just minutes after hanging up, Yan Fei’s phone rang again. It was Zhou Xiaohong’s voice: “Boss, I found a suitable candidate for general manager. You should come to the office.”

Yan Fei thought for a moment—he had nothing pressing—so he agreed and took a taxi to the company. Half an hour later, he entered the office building, where seven or eight employees were already present, and the layout was nearly complete.

Looking at the company’s logo wall—named by himself as Shen’an City Momo Technology Co., Ltd.—and the app icon he designed, Yan Fei felt pleased with the elegant display.

Zhou Xiaohong saw Yan Fei and hurried over, cheerfully exclaiming, “Boss, you’re here!”

The seven or eight employees Zhou recruited turned to glance at Yan Fei briefly, then resumed their work. Yan Fei scanned them and saw they were designing the company website and developing the Momo app, which pleased him greatly.

A middle-aged man emerged from the general manager’s office and approached Yan Fei briskly. “Hello, boss. I’m Li Fu. Manager Zhou mentioned you. I’m starting at the company today.”

Yan Fei nodded and, together with Li Fu, went to the chairman’s office. Zhou Xiaohong prepared tea while Yan Fei chatted casually with Li Fu, learning that Li Fu had previously developed instant messaging social software and once owned a small company, but it had failed amid fierce industry competition as Tencent monopolized the PC-era IM market.

Satisfied with Li Fu’s background, Yan Fei said gravely, “Our Momo company focuses on stranger social networking, emphasizing mobile social. The PC version just needs simple maintenance; no expansion there. Once you join, all your energy must go into rapidly capturing the stranger social market.”

Li Fu looked puzzled and asked, “Boss, why don’t we enter the familiar social networking market? It’s ten times larger than the stranger market.”

Yan Fei tapped the table and said solemnly, “Positioning. Momo’s positioning is stranger social—couple interaction, online dating. Don’t deviate from this. Don’t worry about anything else. Our goal is to dominate the future stranger social market. Momo will be unrivaled.”

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Li Fu nodded thoughtfully and said with conviction, “Understood, boss. You can trust me. We probably can’t beat Tencent in the familiar social field. Starting with stranger social is an excellent positioning. Initially, we can use location-based social and online dating as entry points to capture the youth market.”

“Exactly—great minds think alike!” Yan Fei laughed. “The company’s registered capital is 100 million yuan, currently fully funded by me personally. In the future, I will allocate 20% of the shares into an equity incentive pool, which will not be diluted by financing. If Momo becomes dominant in stranger social, you will hold at least 30% of that pool. Your current annual salary is 1 million yuan.”

Hearing such generous terms, Li Fu immediately pledged loyalty, “Boss, rest assured. I will work hard. Momo Technology will definitely become the leader in stranger social.”

After entrusting Li Fu with management, Yan Fei appointed Zhou Xiaohong as HR manager to oversee personnel and cooperate with Li Fu to run Momo Technology.

Time flew, and it was Thursday. Yan Fei watched the CSI 300 index for half an hour and saw the battle was intense. After the bulls’ fierce attack yesterday, their momentum now weakened, while the bears seemed low on ammunition. Both sides fought fiercely but only with small orders of tens or hundreds of contracts.

Seeing this, Yan Fei realized the bulls’ momentum might vanish soon. The nearly five-day rebound and consolidation might be ending, with a significant drop likely ahead.

Without hesitation, Yan Fei began closing his long positions with small orders. Within minutes, he sold all 500 long contracts at an average price of 3185.64, locking in a profit of 24.207 million yuan. After commissions, his total settled capital reached 92.2 million yuan, with cumulative funds at 104.47 million yuan.

After closing, Yan Fei’s eyes widened as a sudden 3,000-contract long order surged, pushing the CSI 300 to 3210.25.

Staring at the sharp uptick, Yan Fei cursed in frustration, “Bulls, you’re playing me! I don’t believe you. I’ll short now; if you’re strong, swallow my order.”

At 3,200, Yan Fei placed a 500-contract short order and watched as it was continuously taken. A smile crept onto his face as he muttered, “Just as I thought, these bulls are slow eaters. Their true colors are showing. Down you go!”

With Yan Fei’s words, the CSI 300 fell from its high of 3212.27. Under the pressure of multiple hundred-contract short orders, it broke below 3,200, settling at 3194.58.

Yan Fei watched for a few minutes and saw more short orders than longs. He was confident the market would close with a slight decline today and likely plunge tomorrow—another Black Friday.

Satisfied with his 500-contract short at an average price of 3205.24, Yan Fei planned to transfer the remaining 32.31 million yuan in his account to his personal funds tomorrow to pay the 70 million yuan investment for Dianping at month’s end.

Having handled these matters, Yan Fei returned to reading finance books, continuing his studies as time flew by. Soon, the anticipated Black Friday arrived. After breakfast, Yan Fei opened the Shanghai copper futures 0912 contract.

At 8:55 a.m., during the opening auction, a 1,000-contract order surged, driving the price up to 51,000—nearly the month’s highest.

Yesterday’s settlement price was 49,680, so this strong opening suggested a big rally today. Yan Fei pondered and decided to close his positions today, as he needed funds by Monday.

After five minutes of the opening auction, the price settled at 50,630. Yan Fei immediately sold off his 4,820 long contracts.