The pain is real. After a brutal July, October's sell-off has been just as vicious, with two rounds of aggressive dumping leaving investors gasping for air.
Private funds, finance bloggers, and influential market commentators all have their own tales of misery and tears.
As widely discussed, beyond the sudden crashes in small-cap tech stocks, the collective slump in AI applications, and the fading momentum of dividend stocks, three major market focal points have drawn intense attention.
Rumors of Major Liquidations in Optical Module Stocks
First, rumors circulated that large holders in Zhongji Innolight Co.,Ltd. (ASX: 300308) and Eoptolink Technology Inc.,Ltd. (ASX: 300502) had been liquidated. Eoptolink crashed 12%, while Zhongji Innolight fell 9% in A-shares and 8% in Hong Kong shares. While the authenticity of these rumors cannot be confirmed, the fact that these tech giants saw their stock prices halve in just one month raises serious questions about their stability.
As of now, Zhongji Innolight's gains for the year have been wiped out entirely, turning negative. Both Zhongji Innolight and Eoptolink stated, "The company's production and operations are completely normal, the supply chain is stable, capacity utilization is sufficient, and we can secure orders and deliver quality products on schedule."
A suspected large holder from a Jiangsu-Zhejiang team reportedly posted on a personal public account that they had cut all losses at the lowest point, with accounts heavily weighted in these stocks hitting liquidation levels and facing forced closures for the first time in years. Jiangsu-Zhejiang capital has taken a severe hit this time. The account currently has no related posts.
Regarding the rumored liquidation of major Jiangsu-Zhejiang holders due to Zhongji Innolight and others, Securities Times verified, stating, "It is understood that today, no chain forced liquidation occurred in Shenzhen-listed AI leader stocks as rumored online. Only individual stocks saw small-scale liquidations, with amounts under 100,000 yuan. The related rumors are untrue."
City Express reported that a Hangzhou brokerage official said, "We haven't heard any similar news for now."
However, some private funds noted, "From the market action, there are indeed some stampede characteristics, including yesterday's CATL."
A fund industry media outlet cross-verified, stating that a relatively reliable account is: institutions stampeded, all rushing to sell.
Notably, well-known commentator Li Yien, who previously urged everyone to reduce positions and proclaimed "time will prove optical modules," is now asking everyone to hold firm: "Just hold and stay calm here." He also said, "I've become a poor brother too."
CATL's Relentless Decline
Second, regarding Contemporary Amperex Technology Co., Limited (ASX: 300750), the stock price has been falling continuously and has now halved. As the largest weighted stock on the ChiNext, it dragged the ChiNext Index below 2600 points, with a monthly drop of nearly 20% and a 40% plunge over six months.
As mentioned earlier, whether Zhongji Innolight, Eoptolink, or CATL, all are heavily held by public funds. Among them, Zhongji Innolight ranks first in public fund holdings with a market value of 174.3 billion yuan; Eoptolink is second with 140.9 billion yuan; CATL is fifth with 59.1 billion yuan. Other small-cap tech stocks like Naura, Cambricon, Dongshan Precision, AMEC, and GigaDevice are also heavily held by institutions.
In fact, not only public funds but also many quant funds and private funds are uniformly tech-styled, with holdings highly overlapping with public funds. Many private funds have also suffered severe drawdowns. For example, several products under Wenbo Quant fell 20% this year, and Mingshi Fund, due to its high tech allocation and extreme elasticity, saw its net value drop over 6% in a single week last week.
Just now, well-known blogger "Feng Ge Wangming Tianya" posted his stock trading bill, showing a monthly loss of 1 million yuan and a October return of -17%. Besides losing 50,000 yuan on 1 million yuan of gold, what else did Feng Ge buy? According to his previous posts, one important position was lithium carbonate, which is closely related to CATL. Lithium carbonate is the core raw material for CATL's power batteries. Lithium carbonate has also halved from its May high and has now fallen below 100,000 yuan per ton.
On October 12, Feng Ge posted his account with a cost of 36.8 yuan, now down 480,000 yuan; on October 16, he lamented being badly burned by lithium carbonate. He said, "What I regret most now is letting my family down."
Major Indices Approaching September 24 Starting Point
Third, important stock indices are gradually approaching their September 24 starting points. As Dan Bin said, all major indices have fallen sharply, with the Shanghai Composite, ChiNext, and Hang Seng Tech all dropping back to early October 2024 levels or even lower. After going around in circles, it seems the market's ups and downs over the past two years have returned to the starting point. Rounds of expectations, rounds of volatility, and finally standing at the original starting point again.
Among them, Hang Seng Tech plunged 5% today, less than 100 points from its September 23 level. Behind the Hong Kong stock crash, multiple analyses have pointed to core issues: liquidity problems, foreign capital withdrawing, illegal cross-border brokerage activities by domestic capital, wealth taxes forcing many major shareholders to reduce holdings and cash out, and crazy IPO issuance draining market liquidity.
Regarding A-shares' continued decline, Dan Bin also expressed regret: A-shares still require "selling high and buying low" for flexible handling. As for whether he will stick with A-shares, he responded: Still holding on; otherwise, we could only buy A-share and Hong Kong stock funds domestically and would not have avoided the drawdown. According to Dan Bin's previous tech stock positions, domestic funds have already fallen significantly, with a 35% drawdown in July, and October's drawdown is likely not much less.
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