NOVPUBToday is the last Friday of May, and the entrance to the Vienna Stock Exchange is now swarming with people.
The "Austrian Securities Management Act" clearly stipulates that listed companies must publish financial statements once every three months, and the time is next month.
Since companies are listed at different times, the cycles for publishing financial statements also vary, and many companies release their financial reports at the end of each month.
Choosing Friday gives the market time to react over the weekend when the stock market is closed, preventing investors from impulsively selling off their shares all at once.
If it’s good news, naturally, there’s no need to wait until the end of the month, it can be announced at any time.
The financial statements of companies are also published in financial newspapers, just a few hours later than the announcements made by the exchanges, and there usually aren’t so many people around.
Now, however, is an exception, as the past few months have seen strikes throughout Europe. The performance of companies affected by the strikes naturally cannot be good, and everyone is mentally prepared for it.
Maldonado is also among the investors, and normally he does not check the announcements made by the exchange, as there simply isn’t enough time, even after seeing them on Fridays.
Today is an exception, as Dacol Textile Factory, which holds the majority of his shares, is about to release its financial report. Deep down, Maldonado is already hoping that Dacol Textile Factory’s losses will be minimal.
There’s no helping it, he’s already trapped. Since the outbreak of the strike, Dacol Textile Factory’s stock price has been in decline, with more selling than buying.
The stock price hasn’t hit bottom because Dacol Textile Factory is a large business with a complete industrial chain, possessing a strong ability to weather risks, so investors still have confidence.
Looking at the crowded crowd, Maldonado decisively enters the café across the street to wait. Just as he reaches the third floor, he hears someone calling out.
"Maldonado, over here!"
Maldonado responded and walked over, "You’re all here, it seems today’s results are not going to be optimistic."
The group consists of old friends who met through playing the stock market, having been in the industry for many years. They only gather to wait for the corporate financial statements when the market looks bearish.
A bald middle-aged man complained, "Damn, can’t you say something nice for a change? Even if it’s just to hoodwink us, it’s better than being so blunt."
Maldonado shrugged, "Forget it, Karen. It’s not easy to fool you. If the stock market was looking good today, you wouldn’t be here either."
Clearly, the two were well acquainted and spoke very casually.
As retail investors in the stock market, they may seem successful on the surface, but in reality, they are always anxious, not daring to let their guard down at even the slightest sign of trouble.
Just look at their receding hairlines to know they have been through their fair share of worries.
An elderly man at the side pointed to the exchange building across the street, "It seems they have announced it."
As seasoned stock traders, they have their own ways to judge the situation. For instance, now, while others were still squeezing in below, they could tell from the crowd’s reaction upstairs.
Karen put down the coffee in his hands and said helplessly, "It’s indeed bad news, Maldonado. I must say your words really stink!"
Maldonado’s face was bitter, "I didn’t want it either. Now I have to go down and confirm just how bad this bad news is. Anyone coming with me?"
The others looked at each other, and the elder spoke, "Let’s wait a bit longer. The market is already closed, and with so many people down there, we’re not in a rush for a little bit of time."
Time hurried by, the coffee on the table had already gone cold. When they saw the crowd below had mostly dispersed, they finally descended the stairs.
At that moment, they realized it wasn’t just retail investors like them that were present but also some "big names" from within the circle. Clearly, many were concerned about the corporate financial reports.
With trepidation, Maldonado checked Dacol Textile Factory’s report and saw the prominently marked "loss of 1.248 million," and with closed eyes, he couldn’t bear to read further.
The reason didn’t matter anymore; the astronomical figure of the loss had far exceeded his expectations, leaving him with only one thought in mind—"cut losses and exit."
Bear in mind, last year, the entire profit of Dacol Textile Factory didn’t even reach 1.5 million Divine Shield. This loss now meant that Dacol Textile Factory could declare that it won’t even break even for the year.
Maldonado could already hear someone cursing, furiously denouncing the management of Dacol Textile Factory as braindead, incapable of adapting.
...
If there were any choice, Old Lano would not wish to release the financial statement at this time. But there was no option, failing to publish the report on time would not only result in fines but also invite investigation from regulatory authorities.
Not many companies can withstand such scrutiny, and Dacol Textile Factory is no exception; even a minor issue found could deal a fatal blow to the business.
The attention from the outside world was too intense now; even a small issue could be exaggerated, and even Old Lano wouldn’t dare to fabricate the financial report.
Having struck for over a month, it would be unreasonable if the company didn’t suffer losses.
Shipments, total trade amount, tax figures—these were all verifiable data, making falsification no easy feat.
In theory, goods worth one Divine Shield could be sold for ten thousand Divine Shield, which is legal as long as the business pays taxes based on the transaction amount.
When transactions far exceed market prices, goods become luxury items, and what is required is the payment of luxury taxes. This tax rate is much higher than ordinary taxes.
Theoretically, as long as a company is willing to pour money into performance, turning losses into profits is very simple. In practice, however, such fools do not exist. The cost of fraud is too high, far exceeding the threshold that capitalists can bear.
On Monday, influenced by the dire news of Dacol Textile Factory’s significant losses, the Vienna Stock Exchange opened to a wave of selling.
In the exchange, sell orders were everywhere with no one taking over, so naturally, the share price kept plummeting. By the close of trading in the afternoon, Dacol Textile Factory’s share price had fallen by 14.7 percent.
At first glance, this drop might seem acceptable, but in reality, it was the nth time the share price had dropped since the outbreak of the Dacol Textile Factory strike.
The share price was already at rock bottom, and after another drop, the market value of the Dacol Textile Factory was only 63 percent of its peak.
It wasn’t just Dacol Textile Factory whose stock price fell; all companies’ share prices were affected, especially those experiencing strikes, which suffered the greatest losses.
Investors believed that companies undergoing strikes, like Dacol Textile Factory, would also face severe losses.
In the market economy, it was now a situation where pulling one hair would affect the whole body. Once production at a company was affected, neither the upstream raw material suppliers nor the downstream sales channels could expect to remain unaffected.
Stock price drops can also be contagious; many companies with good performance suffered undue disasters. By the end of the day, Vienna Stock Exchange’s overall market fell by 4.2 percent, and the market was filled with laments.
Affected by adverse market factors, the Vienna stock market continued to crash in the following days. Many company stocks fell to rock-bottom prices, ushering in an official stock market disaster.
By the close of trading on Friday, the Vienna Stock Exchange had fallen by 11.8 percent, and in just five short days, the Austrian stock market had evaporated billions of Divine Shields.
The stock market crash had arrived!
With the role of newspapers, news of the Vienna stock market crash quickly spread across the entire European Continent, and astute investors immediately sold off their stocks.
As economies have become more interconnected in Europe, a stock market crash in Austria meant that other European countries could not remain immune.
A strange scene unfolded, with sell-offs occurring constantly in London and Paris and few buyers in the market. No matter how much experts and scholars touted the benefits, the stock market continued to decline. n𝚘𝚟𝚙𝚞𝚋.𝚌o𝚖
"Rescue the market" became a hot topic following "strike," but before doing so, the strike issue had to be addressed.
If companies couldn’t resume production, how could stock prices be guaranteed? Capitalists were frantic, as only a very few have the privilege to ’shear wool’ in the stock market, with the majority being the sheared sheep.
To restore production as quickly as possible, capitalists showcased a variety of tactics.
Some capitalists chose to negotiate and compromise with workers; some chose to buy off and disintegrate them; others sent henchmen to capture workers’ families, forcing them to work; and still others resorted to unleashing Gatling guns to mow down striking workers, compelling them to return to work through bloody slaughter...
A plethora of ingenious methods continued to unfold across the European Continent, bringing laughter to the public while also being filled with bloodshed.
Where there is oppression, there will be resistance. Bloody slaughter brought not just a return to work but also a continuous series of workers’ uprisings.
Chaos reigned; the entire European Continent was in disarray. A hodgepodge of ideas rapidly spread, creating a chaotic spectacle.
In Vienna Palace, Franz, observing the turbulent situation, was also troubled by headaches. The Vienna Government intervened early, preventing a large-scale workers’ uprising in Austria, but the stock market crash was troubling enough.
Due to the stock market crash, many companies fell into financial strife. If not resolved, this could trigger a new economic crisis.
If it were merely a cash shortage, it could be manageable by seeking bank loans. However, these financially strapped companies had numerous other issues.
For instance, chaotic management, unresolved strike issues, conservative business approaches, outdated machinery and equipment...
All these problems converging led banks to the natural conclusion: high-risk businesses.
When the market was flourishing, banks didn’t mind high-risk businesses. High risks often came with high returns, and as long as the profits were substantial, banks lacked no adventurous spirit.
Now, the situation was different. The stock market crash had affected many aspects of banking, and most banks were contracting their lending.
Forget high-risk loans—getting low-risk business loans was difficult too. Banks simply didn’t lend without collateral.
Franz was powerless to help; he couldn’t knowingly approve bank lending with outstanding issues.
Engaging in such practices wouldn’t solve the crisis but would extend its duration.
While it might benefit economic development in the short term, in the long run, it would be like dragging the entire nation’s economy down to hell.
Expecting these companies to rise from the ashes? Franz felt it would be better to level them and rebuild. At least that would require lower investment costs and consume fewer social resources.
Survival of the fittest is a market principle, and Austria’s market was not infinite. In saving some companies, interests of others in the same sector were sacrificed, fundamentally breaking the principle of fairness.
...
