I am Hollywood

[Chapter 1176: Extreme Joy Leads to Sorrow]

The next day, the media chatter about the Federal Justice Department needing to impose restrictions on the Yahoo browser intensified significantly.

Although it was becoming clear that Microsoft had instigated the situation behind the scenes, other internet companies that had felt the pressure from the Firefly system evidently saw this as a golden opportunity. Almost all internet companies believed that if they could force Yahoo to relinquish its monopolistic advantage over browser software, they would surely gain a larger share of the market.

Companies like @Home stepped forward, and naturally, other internet firms were eager to jump on the bandwagon.

Although the Department of Justice had scheduled a hearing on the Yahoo browser for 2 PM Eastern Time, the media frenzy caused Yahoo's stock to plummet 3.3% just after 9:30 AM.

As Eric had anticipated, companies like AOL-Time Warner, @Home, and even Microsoft -- all of which were in competition with Yahoo -- saw their stock prices rise to varying degrees. The entire NASDAQ index also continued to maintain a rebound, following the trend of the past two weeks.

However, at 11 AM, following a notice from Firefly Investment's official website, many executives from the internet companies who had momentarily reveled in the excitement suddenly found themselves in despair.

The announcement stated that to raise funds for its next steps, Firefly Investment would be reducing its holdings in Yahoo, Cisco, Qualcomm, and other companies over the coming week. Although the brief announcement felt somewhat perfunctory, once the data was compiled, many were astonished to discover that this seemingly casual plan to sell off shares represented a total value of a staggering $3 billion.

If this had been several months prior during NASDAQ's peak, cashing out $3 billion in a week wouldn't have significantly affected the NASDAQ index. During the final weeks of Clover Fund's pullback, over $3 billion was cashed out weekly from the NASDAQ market.

Nonetheless, everyone recognized that the current situation was strikingly different from just a few months before. The NASDAQ had just experienced a dramatic crash, leading to significant losses for countless investors. Even though the index had begun to rebound in the last two weeks, those who had weathered the stock market crash were like frightened birds.

Despite the overall uptick of the index, the trading volume in the NASDAQ market was far from the robust activity observed months ago.

At this critical juncture, Firefly Investment -- once a strong supporter of the NASDAQ market -- suddenly announced a plan to sell off $3 billion worth of shares, sending shockwaves throughout the tech industry.

Even with many understanding that this move correlated with the upcoming Department of Justice hearing regarding Yahoo, a wave of panic quickly spread across the NASDAQ market.

If they were to sell off $3 billion in a week, what would happen the following week? Would Firefly Investment continue to sell?

Everyone knew that despite the recent NASDAQ crash, the technology stocks that Firefly Investment controlled still exceeded a value of $200 billion. The $3 billion sell-off was starkly significant -- it equated to the market capitalization of many new tech companies -- yet it wouldn't significantly impact Firefly Investment's proportions in the companies involved.

This suggested that Firefly Investment, following the first week's sell-off, could very well proceed with further cashing out.

With the NASDAQ still fragile from its recent rebound, how could the market endure several rounds of $3 billion sell-offs from Firefly Investment?

Various thoughts raced through investors' minds. In conjunction with Firefly Investment's announcement, a wave of sell orders for tech stocks flooded the market. Many investors instinctively began to follow suit, leading to a swift cessation of the NASDAQ's two-week upward trend.

...

From the moment Firefly Investment released its announcement and began unloading stock at 11 AM, the NASDAQ index plunged from a peak of 3,677 points all the way down to 3,612 points in just over an hour.

The stock prices of Firefly-associated tech companies -- like Yahoo, Cisco, Qualcomm, and Amazon -- fell sharply, with Yahoo's stock drop accumulating to an astounding 13.3% over just two and a half hours since the market opened.

However, this was merely the beginning.

By afternoon, some investors who had originally been on the sidelines sensed trouble and joined the selling frenzy. This inevitably exacerbated the selling wave, causing stock prices for new tech companies outside the Firefly system to also tumble.

...

Watching the NASDAQ index's decline, which appeared to be yanked downward by an invisible hand, the entire new tech industry could hardly remain calm, hastily formulating responses.

Subsequently, internet media platforms including AOL and MSN released statements condemning Firefly Investment's sudden sell-off actions. AOL pointedly stated in its press release that Firefly had accumulated cash reserves of at least $9 billion through previous stock sales of AOL and the transfer of Fireflyer shares, and if profits from Firefly's companies like Nokia and Cisco were included, their cash reserves might even have reached $10 billion.

In addition, AOL exposed that Clover Fund, under Firefly, also held significant cash reserves surpassing even those of Firefly Investment.

Given that the entire Firefly system boasted such substantial cash holdings, and with only a $3 billion acquisition of Sony Pictures as a noteworthy expense over the past year, Firefly Investment had no pressing need to sell its tech stocks.

The reason behind this move seemed malicious; Firefly Investment appeared to be leveraging the entire NASDAQ index to coerce the Federal Justice Department into dropping its investigation into Yahoo's monopolistic browser market share.

...

Although everyone understood that AOL's statements were factual, the forthrightness of AOL's stance revealed the naivety of what was ultimately a young company. At least, the AOL editor who permitted the article's publication certainly seemed uninformed about the political intricacies at play.

There were many things everyone was doing, but some discussions were definitely off the table.

Sure enough, less than ten minutes after AOL's article went live, Firefly's lawyers delivered a cease-and-desist letter to Steve Case.

Firefly also issued a direct rebuttal on Yahoo's portal, asserting that their sell-off plan complied with federal regulations. Furthermore, Firefly had duly notified the Federal Trade Commission of their intentions in advance and alerted shareholders via public announcement, demonstrating Firefly's responsible stance toward its investors.

Thus, AOL's conjecture about Firefly's intentions was deemed nothing more than malicious defamation. Firefly claimed that AOL should retract the related press release immediately and threatened to sue the editor who wrote the piece, as well as AOL, for defamation.

...

As many speculated whether AOL would confront Firefly directly, within half an hour, the article vanished from the AOL portal.

Though AOL did not offer a formal apology, its retreat prompted many smaller news outlets to become more cautious.

Others re-noticed that despite the multiple rounds of significant sell-offs, Firefly Investment maintained its position as a major shareholder in AOL-Time Warner, with over 4.1% of shares post-merger in the first half of the year.

Moreover, as various investment banks continued to reduce their stakes over the year, Firefly Investment's sustained shareholdings allowed it to climb the ranks among AOL-Time Warner's major shareholders.

Inadvertently, Firefly Investment's 4.1% stake had made it the second-largest shareholder of AOL-Time Warner, trailing only behind Ted Turner's 6.5%.

While due to prior circumstances, Firefly did not possess a seat on the AOL-Time Warner board and had even delegated its voting rights to the AOL management during the merger, this incident made it clear to external observers that even as a somewhat detached major shareholder lacking direct control, Firefly Investment's significant stake could not be overlooked by any major corporation.

While Firefly typically made no attempts to influence AOL-Time Warner, allowing for a competitive posture with the Firefly tech companies, the moment they exerted pressure, AOL-Time Warner had to promptly retract critical news within half an hour.

...

As the NASDAQ plummeted in response to Firefly Investment's sell-off plan, the Department of Justice hearing proceeded as scheduled that afternoon.

Following the pre-agreed strategy, Yahoo CEO Ian Gernier faced off fiercely against the Justice Department's inquiries, with Secretary Janet Reno present alongside dozens of reporters.

In response to the department's concerns that Yahoo's dominance in the browser market stifled the development of rival internet companies, Ian Gernier threw down the gauntlet.

He pointed out that outside of its browser, Yahoo had pioneered several internet services, including its portal, email, and search engine, a fact highlighted by many similar companies directly mimicking Yahoo's business models. Some of these imitators had gone so far as to infringe on Yahoo's core patents.

Instead of retaliating against these imitators, Yahoo had taken an open approach, voluntarily licensing numerous patents to foster industry growth, thus illustrating that Yahoo was a company committed to social responsibility.

Throughout the two-hour hearing, Ian Gernier successfully controlled the proceedings through meticulous preparation and quick wit.

Though Janet Reno did not announce a definitive Justice Department resolution at the conclusion, even those somewhat detached from the industry could glean a sense that the Justice Department would not proceed with any substantive action against Yahoo.

After all, as Ian Gernier pointed out during the hearing, unlike the expensive Windows operating system from Microsoft, the Yahoo browser was completely free of charge and did not add expense to users' pockets. Furthermore, its standardized interface benefited users' internet experiences.

Yahoo invested tens of millions annually in its free browser and was fully entitled to the platform profits generated by it. Yahoo had maintained a sufficiently open stance and bore no obligation to cater to companies mimicking its business model.

...

Immediately after the hearing, Yahoo published a full transcript and video recording of the event within moments.

Simultaneously, every media outlet associated with the Firefly system sprang into action to control the narrative. From that afternoon onward, public sentiment began to shift favorably toward Firefly.

Eric ultimately decided against attending the Washington spectacle in person. However, that afternoon, he received a phone call from Janet Reno, the moderate Justice Department Secretary, who mentioned that the department would formally announce the hearing's outcome the next day, while expressing hope that Firefly Investment would retract its selling plan to avoid further aggravating the NASDAQ market.

...

Amid this overwhelmingly one-sided hearing, NASDAQ's performance mirrored this sentiment throughout Monday's trading day, displaying a similarly biased trend.

In just one day, NASDAQ dropped 177 points, with some tech firms plummeting back to two-week lows within six and a half hours.

Despite the Justice Department's position on Yahoo's browser being stated clearly, Eric had no intention of abandoning the planned sell-off.

After all, to backtrack on the sell-off would be tantamount to admitting that Firefly Investment's actions were an attempt to pressure the federal government. This would not only reflect poorly on Firefly, but also embarrass the Department of Justice.

Thus, the next day, even as the Justice Department convened a press conference at 9 AM to announce that they would not interfere with Yahoo's software as long as it maintained its operating strategies, Firefly Investment continued to implement its sell-off.

The NASDAQ index persisted in its downward trend.

A siege against Yahoo that had hardly begun now seemed to unravel, leaving many with a profound sense of defeat.

Throughout Tuesday's trading session, the NASDAQ fell another 97 points.

While today's decline was slower compared to yesterday's drop, it was clear the rebound had halted altogether.

Wall Street's initial hopes for the NASDAQ to recover to 4,000 points faded as it plummeted to 3,403 points, yielding a mixture of despair among investors.

Having recently weathered a crash, Wall Street was navigating this rebound cautiously -- over the course of merely two weeks, they had failed to sufficiently cash out their tech shares.

Now that the situation shifted once more, cashing those stocks would only become more challenging.

Moreover, the previous rebound in NASDAQ had largely stemmed from positive news released by Firefly.

However, after feeling cornered by competitors, Firefly was unlikely to announce any new support for the NASDAQ market.

So, aside from Firefly, who could step up to play that role?

The answer was clear: no one.

The other possible case -- the Microsoft antitrust lawsuit -- had been settled.

And even Microsoft lacked the robust resources to genuinely shift the entire NASDAQ's movement like Firefly Investment could.

If it were another player in the capital arena, Wall Street might be able to exert influence. But against the established Firefly system, Wall Street found itself outmatched.

*****

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