Clearly aware of the legal risks involved, the article accusing the internet industry of being a Ponzi scheme did not directly name any company. Instead, it listed a series of detailed data points. Even so, it was evident to any discerning reader which "industry giant" the article was targeting.
The forces of numerous short-selling capital groups and the Mellon family proved formidable. Coordinated efforts by media outlets across the USA triggered widespread public reaction.
Despite the Westeros system taking timely countermeasures, the Nasdaq opened lower on Monday, January 27. Egret Corporation, being the most affected, experienced a drop of up to 1.3% within the first hour of trading, translating to over $10 billion in paper losses.
By the end of the day, the Nasdaq Index closed down 69 points, a decline of 1.1%. Egret's stock price also fell by 0.7%, with its market value dropping from Friday's $751.9 billion to $746.6 billion. Other companies like Cisco, AOL, and Microsoft also saw varying degrees of stock price declines.
Although the results fell short of expectations, this "opening shot" still managed to excite certain parties.
Thus, on Monday evening, further measures were taken.
On CBS Evening News, a program controlled by Westinghouse Electric, which is closely tied to the Mellon family, a former Republican Justice Department official strongly criticized the Clinton administration for delaying and undermining the antitrust investigation into Egret. He called on Congress and state governments to collectively pressure the White House to dismantle Egret, branding it a "monopolistic giant hindering the growth of the new technology industry."
The following morning, numerous local newspapers and social media platforms featured statements from influential government officials and public figures calling on the Federal Reserve to raise interest rates. Their reasoning was to control the increasingly overheated federal economy and to guide severely inflated industries like the internet sector toward a healthier development trajectory.
These new actions—both the attacks on Egret, Nasdaq's largest market-cap company, and the calls for the Fed to raise rates—struck directly at the heart of the issue. Compared to Monday's "appetizer" article, they were far more impactful.
On Tuesday, the Nasdaq took another significant hit.
The index fell by 1.6% in a single day, surpassing Monday's decline. Egret's stock price also plummeted further, with a single-day drop of 2.1%, erasing over $15 billion in market value.
A storm was brewing.
Although the two days of negative developments hadn't yet triggered widespread panic selling, it was clear to everyone that continued pressure could only lead to collapse. In response, the tech giants led by the Westeros system decisively launched their counterattack.
On Tuesday evening, Federal Reserve Chairman Alan Greenspan appeared on ABC's evening news, stating unequivocally that, to maintain the current prosperity of the U.S. economy, the Fed had no plans to raise interest rates in the short term.
Then came Wednesday.
Major online portals and East and West Coast newspapers published articles highlighting how Egret had used substantial profits from advertising and software businesses to subsidize its e-commerce operations. The articles pointed out that despite Egret's $1.7 billion loss in the previous year, the company had created at least 100,000 long-term jobs across the USA.
During a Wednesday morning press briefing, when asked about Egret, the White House spokesperson publicly stated that, given the close integration of Egret's business operations and the large number of jobs it created, the Justice Department would carefully consider any plans to dismantle the company. Instead, they would merely encourage Egret to improve certain market practices that could harm small businesses and consumers.
Following the White House's statement, Egret acted almost immediately.
On Wednesday morning, at its headquarters in San Francisco, Egret signed a technical licensing and compatibility-sharing agreement with IBM, Microsoft, HP, and other companies providing data center services. The agreement aimed to improve the compatibility of Egret's internet infrastructure software with other data center platforms.
This move was clearly a response to accusations raised during last year's Justice Department investigation, which claimed Egret was bundling its software with data center services to force sales on customers. Additionally, on Wednesday afternoon, Egret announced it would lower its data center service prices by 15% to support the development of small businesses. The price cut took effect immediately.
But that wasn't the end.
On Thursday morning, Egret executives held a press conference at a soon-to-be-completed Amazon warehouse and logistics center near Miami, Florida. They announced plans to accelerate the hiring of 2,000 employees. They also revealed that once the logistics center was operational, it would not only expand its workforce but also create at least 10,000 additional jobs in the surrounding area.
At the same press conference, a Florida prosecutor involved in Egret's antitrust investigation publicly endorsed the company's actions, stating that negotiations for a settlement between Egret and the Florida Attorney General's Office were nearing completion.
These rapid-fire developments over two days, which seemed to completely reverse the situation, drew heavy criticism from short-selling forces controlling smaller media platforms. However, the market's response was immediate and positive.
Egret's two-day decline halted on Wednesday and turned into a rally. This reversal also spurred the Nasdaq to recover, with the index quickly climbing back above Friday's closing level of 6,300 points.
For those with insider knowledge, the rapid turnaround was nothing short of crushing.
The disparity in strength between the short and long sides was simply too great.
The short-selling forces relied on local media outlets, small online platforms, and a handful of former politicians to create public pressure. In contrast, the long side leveraged the White House, the Federal Reserve Chairman, Egret's portals, ABC Television, and national media giants like The New York Times. The outcome was inevitable.
Egret's additional measures to promote local employment also gave the Justice Department and state attorneys general a graceful exit. It was clear to everyone that last year's antitrust investigation had been initiated by the White House as a strategic move. With Egret breaking through the impasse, the investigation would soon fizzle out.
Once it was confirmed that Egret would not be dismantled, the potential downsides—such as price cuts for data center services and technology sharing with competitors—were far outweighed by the benefits.
By Friday, January 31, after a tumultuous week, the Nasdaq closed not with a crash but with a 1.8% gain for the week, reaching 6,437 points.
Egret was the standout performer.
The company's stock price continued to rise over Wednesday, Thursday, and Friday. By Friday's close, its market value had climbed to $773.1 billion, a weekly gain of 2.8%.
While a percentage increase in the single digits may seem modest, given the scale of the Nasdaq market and Egret's size, the numbers were still staggering. In contrast, the short-selling capital, which had seen a slight reduction in paper losses early in the week, ended up with significantly expanded losses.
Sunday, February 2.
Simon had arrived in New York the day before, spending Saturday with Irene Lande and Sunday morning with Grace.
That afternoon, he had lunch with Amancio Ortega, the founder of Inditex, who had traveled from Spain. Though Ortega would later become Spain's richest man and briefly hold the title of the world's richest man, at this point, he was not particularly significant to Simon.
It didn't matter much. Simon no longer compared himself to anyone when it came to wealth.
After lunch, they amicably finalized plans for the Westeros company to invest in Inditex, Zara's parent company. Later that afternoon, Simon visited the Upper West Side apartment where Chen Qing and Lin Su lived.
As soon as Simon entered, Chen Qing rushed over and exclaimed, "Boss, you're amazing!"
Simon smiled as he stood in the entryway, letting his maid change his shoes. He replied, "What a coincidence. I've always thought so myself."
Chen Qing teased him further. "Ha, but that move on Wednesday—signing a partnership agreement in the morning and announcing a YWS price cut in the afternoon—was brutal. Boss, I know Egret can afford a price war, but wasn't that overkill? Just signing the agreement should've been enough."
They walked into the living room as they spoke.
Instead of answering immediately, Simon asked, "Where's A-Su?"
"She just went out to buy some groceries. We're planning to cook you a nice dinner tonight."
Simon nodded. After they sat on the couch, Chen Qing looked at him expectantly. Finally, Simon explained, "That was part of the plan all along. Our YWS is different from traditional data centers. If you've been paying attention, you'd know."
Chen Qing leaned closer and replied, "I know—cloud computing."
"Exactly. Cloud computing has two key advantages: maximizing resource utilization in data centers and reducing costs as scale increases. From the beginning, Egret's profit margins in this area have been much higher than those of its competitors. We initially set higher prices to avoid alerting them. Now, with Egret's expanding scale and lower costs, even a 15% price cut still leaves us with a much larger profit margin than our competitors."
"So does that mean prices will drop again in the future?"
"Of course. In business competition, low prices are always the most direct and effective moat. If your prices are low enough, you don't need to worry about competitors. While Egret got a head start in cloud computing, which originated in the 1980s, the technology itself isn't particularly hard to develop. To maintain our lead, the best strategy is to lower prices, making it unprofitable for competitors to enter the market. Forced competition would only lead to their losses, leaving Egret unchall
enged."
Chen Qing tilted her head, pondering. "So, if I had to guess, once the Nasdaq crashes, Egret will slash YWS prices even further. When the bubble bursts and price wars ensue, competitors won't stand a chance against Egret."
Simon nodded. "Exactly."
Simon recalled how Amazon once dominated global cloud computing by aggressively cutting prices, even when there were no comparable competitors. By doing so, it created an insurmountable moat. When the bubble burst, rivals found it impossible to compete with Amazon's scale and costs, often suffering heavy losses or being forced out of the market.
Drawing on this history, Simon personally implemented a similar strategy for Egret's YWS business. The recent 15% price cut was just the beginning.
With Egret's data center scale now ten times that of its competitors, companies like Microsoft and IBM couldn't compete. And in the expected internet industry downturn following the tech bubble's burst, many competitors might not even survive.
Back in the living room, after discussing the matter, Chen Qing asked curiously, "Boss, the Nasdaq is at 6,400 points now. How high do you think it can go?"
Simon could only shake his head. "That, I truly don't know."
This question was on everyone's mind—how high could the Nasdaq go?
Compared to the 2000 peak of around 5,000 points when the bubble burst in the original timeline, this time, even Simon couldn't predict the outcome.
Simon had considered the question extensively.
First, the Nasdaq's current high of 6,400 points was not yet out of control. This time, the market had Egret, with its $770 billion valuation, and Tinkerbelle, valued at $321.7 billion. These two companies alone, which didn't exist in the original timeline, accounted for over 1,000 points of the Nasdaq Index.
Furthermore, compared to the early 2000s when the internet industry was still in its infancy, Simon's efforts through the Westeros system had advanced the industry by at least five years, if not ten.
Take Yahoo, for example. In 2000, Yahoo had a $100 billion valuation supported by only $2–3 billion in revenue. In contrast, Egret now generated over $30 billion in revenue alone. Companies like Cisco and AOL had also far outpaced their original growth.
This meant that, unlike the original bubble, this time the industry had substantial earnings to back it up. While speculative elements still existed, they were far less pronounced.
As the Nasdaq surpassed 5,000 points this time, even Simon had no clear idea how high it could climb. He could only take it one step at a time.
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