Chapter 4: History of Shorting with 20X Leverage – Stark Industries

Interactive Brokers (IB), the world's largest online securities trading platform, had become quite familiar to Ethan Hayes. Over the past year, Ethan had been trading frequently, and while his principal hadn't dwindled, he hadn't made any significant gains either. The small profits he did make were often eaten up by the transaction fees, though IB's handling fee of only $0.005 per share was a bargain compared to the competition.

Today, Ethan contacted his account manager and secured maximum leverage financing—20 times.

Stark Industries

Stock price: $12/share

Increase: +12%

Market cap: $120 billion

Shares outstanding: 10 billion

Before today's market opening, Stark Industries' stock had fallen to $10 per share. Before Tony Stark's disappearance in the Middle East, the stock price was at $15, with a market value of $150 billion. During his two-month disappearance, the stock experienced a steady decline.

From Ethan's perspective, it was clear that someone had been buying up Stark Industries stock during this time. After all, even without Tony, the company's assets were worth over $100 billion. But when news broke that Tony Stark had been rescued, Stark Industries stock spiked again ahead of the weekend.

"It's time to act," Ethan thought. "The most valuable thing about Stark Industries is its weapons division."

Ethan's plan was simple: short Stark Industries before Tony Stark announced the shutdown of the weapons manufacturing department.

The future of Stark Industries would be clean energy, artificial intelligence, and robotics. But Ethan knew that the stock price surge in clean energy was just a facade—Stark Industries wasn't focused on it at the moment.

Ethan transferred his $44 million into IB and, with 20x leverage, borrowed 73.4 million shares. He sold them all, netting $880.8 million in cash.

Of course, if the stock rose by five percentage points, the brokerage firm would liquidate his position, and his $44 million would be gone. But Ethan knew that Tony Stark would soon hold a press conference and announce the permanent closure of the weapons division.

"The return of Tony Stark is good news for most investors," Ethan smirked. "But it's my chance to short Stark Industries and profit."

At the press conference, Tony Stark appeared before a sea of reporters, looking exhausted. With a cheeseburger in one hand, he addressed the crowd. "Hey, sit down, everyone. I want to see you, and you want to see me."

Obadiah Stane, seated next to Tony, watched him nervously as Tony continued, "I've decided to shut down Stark Industries' weapons manufacturing division, effective immediately, until we find a new direction."

As the words left Tony's mouth, the room erupted into chaos. Reporters bombarded him with questions, but Tony, flanked by bodyguards, exited the press conference without further comment.

Ethan, sitting in his apartment, smiled as he scrolled through the news on his phone. "It's finally happening."

He expected Stark Industries' stock to drop by at least 40% when the market opened on Monday. His target was to make $500 million, and the sharp decline in the company's valuation would help him reach that goal.

Knock, knock, knock.

Ethan set his chopsticks down and went to answer the door. "Hey, Miss Jones," he greeted Jessica Jones.

"Aren't you going to invite me in?" she asked.

"Of course, come in."

After closing the door, Jessica handed Ethan a photograph. Ethan examined it closely. Two black men dressed in hip-hop attire with guns in their waists were talking to a Chinese man, who was handing them a packet of drugs.

"Triad, Mrs. Gao's men," Ethan muttered. His pupils turned ice-blue, reflecting the cold fury he felt inside. Mrs. Gao was the head of the Triad in New York and a member of the city's criminal underworld.

"Her drug operation has always been based in Hell's Kitchen," Jessica said quietly. "The anti-drug team took pictures of your parents' killers. They were drug addicts, controlled by dealers. Now they work for Mrs. Gao."

Ethan walked into the next room, grabbed a thick envelope, and handed it to Jessica. "Miss Jones, this is your payment. I've had it ready for you for a long time."

Jessica looked at Ethan, her smoky, deep-set eyes lingering on his serious expression. "What are you going to do with them?" she asked.

Ethan thought of Mrs. Gao. He recalled how Daredevil had been thrown across the room by her and coughed up blood. She was likely connected to Kunlun, the same place Iron Fist had trained.

"I'm just a student," Ethan replied. "I can't take revenge myself, but I've set aside a sum of money."

In the dim light, Ethan's face flickered between shadow and light. Jessica took the envelope, though she hesitated. She didn't like the idea of taking his money—he was still so young. But her own financial struggles weighed on her, and the landlord had been breathing down her neck for rent.

"If you can, move out of Hell's Kitchen soon. Things are about to get even worse around here," Jessica said as she turned to leave.

"You're right, Jessica. I'm moving."

Ethan knew it was time. Not only did he need to conserve his wealth, but he didn't want to end up being handed over to welfare agencies again. When he first arrived in Hell's Kitchen, he'd found a fellow countryman, paid him off, and avoided being sent into foster care. Now that he was 18, he no longer had to worry about that.

He could finally move on, and once he found his parents' murderers and completed his system tasks, he had no reason to stay in Hell's Kitchen.

Jessica stopped in the doorway and glanced back. "Miss Jones, you deserve this payment. Over the past two years, I've made a lot of money from my writing."

Ethan didn't mention the specific novels he'd written, but he wanted to reassure her that she wasn't taking charity. He had come to Hell's Kitchen with a purpose. The day after moving into his apartment, he had asked Jessica to help him find his parents' killers.

Knowing his tragic backstory, Jessica had kept a close eye on him during his two years in Hell's Kitchen, protecting him from the dangers lurking around every corner.

"I'm glad to hear you're doing well," Jessica said, a hint of sadness in her voice. "Have you found a new apartment?"

"I have," Ethan replied. "I'm moving to Parker Lowe tomorrow night after school.