Chapter Twelve: Selling What You Don't Own

Arata did not come on the Friday.

At four o'clock that afternoon, with the warehouse swept and a neat table of figures laid out on the timber counter, a woman's voice on the office telephone had informed Tomoya, in the tone of a closing door, that Mr Arata had been called back to Fukuoka. The Americans' lawyers wanted one more round of signatures. The joint venture would have to wait until the twenty-ninth, the last working day of the year. Tomoya thanked her and put the receiver down, and was surprised to find that he was relieved. He needed the week.

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On the last Tuesday of 2006, the Executive Lounge had the hollow, held-breath feel of a ship between voyages. Half the tables stood empty. Most of the firms whose presidents drank there had already closed for the holidays, and those that hadn't were downstairs in the ballrooms at their year-end parties. There, for two hours, the guests would drink beer, pour each other's glasses with both hands and agree to forget the whole year, as the custom required. Somebody had hung a small fir tree beside the piano, and the pianist was working through 'White Christmas' at the pace of a funeral march. Beyond the windows, the trees along Marunouchi's main avenue had been strung with thousands of small white lights, and from the fiftieth floor they looked like a river of frost.

At table 3, two bankers were arguing about the PlayStation 3, which had gone on sale in November to queues round the block in Akihabara and was now impossible to buy. One said the queues proved that Sony had left the battery business of the summer behind it. The other said that investors had short memories, and that this was the whole of the stock market. Tomoya, passing with a tray of water glasses, gave it no more thought than he gave the weather.

He had glanced at the reservation sheet in the corridor, and the name beside table 15 had meant nothing to him. Sakurai Hiroshi. Director, Product Quality (Japan). Alone. Hakushu, no ice. Please do not seat anyone near.

At half past six, Sakurai came in.

He was about fifty, with thinning hair combed flat and round steel-framed glasses, and he looked like a man who had not slept for three days. He wore a navy windcheater with a small blue logo on the chest, over a shirt that had lost its stiffness somewhere on the way here, and a visitor's lanyard hung round his neck with the card turned face-in. He carried a small overnight bag, which he set on the seat beside him as if it held something alive. Miss Ishida showed him to table 15, in the corner by the window with the whole of Tokyo spread behind it, and he sat with his back to the view. When the Hakushu came, he looked at it for a long time. He drank half of it and did not touch it again. Then he pressed the heels of his hands against his eyes, and Tomoya saw that they were trembling.

Tomoya knew the logo. He had seen it on the lid of every second laptop in the windows of Akihabara.

He took a carafe of iced water from the service station and crossed the carpet. At the table he bowed. 'Good evening, sir. Hisa Tomoya, at your service. May I refresh your water?'

Sakurai took his hands from his face. His eyes were red-rimmed and unfocused. 'Thank you, Hisa-kun,' he said, quite mechanically, and pushed his glass an inch forward.

They had spoken. Tomoya poured, stepped back and let his attention rest on the grey, thinning head. The lounge dimmed. The hum rose, and out of it came a voice, close and faintly echoing, wound tight with exhaustion.

Thursday. Thursday. Thursday.

That was all, over and over, like a stuck record. Beneath it ran a few smaller currents: the departure time of a train from Kōriyama, a daughter's school concert he had missed, the dull ache of a man who had not eaten since morning. It was the surface of a very tired mind, and what Tomoya wanted was not in it. It was underneath, and it would have to be called.

He took his usual place a pace behind and to the side, tray against his chest, and put on the face of a young man who had been working up the nerve to ask a question.

'Excuse me, sir.' He bowed again, lower this time. 'Please forgive a waiter's curiosity. I noticed the badge on your jacket. My cousin has a little computer stall in Akihabara, and since the summer, half his customers have come in asking whether the batteries are safe. The new ones, I mean. The replacements.' He gave a small, helpless shrug. 'He never knows what to tell them. I wondered whether anyone from your company might know if the trouble is finally over.'

Sakurai went very still, like a man who has heard a noise in an empty house. The colour left his face by degrees. When he spoke, it was in the smooth, flat cadence of a prepared statement. 'I'm afraid I'm not in a position to comment, Hisa-kun. Please tell your cousin to follow the company's guidance.'

But the thought had already risen, whole and sharp, from wherever he had been trying to bury it. Heat flared behind Tomoya's eyes, and the lounge went out like a lamp.

He was standing in a low concrete room that smelled of hot plastic and machine oil, in front of a window of thick, wire-reinforced glass. On the other side was a steel test chamber the size of a wardrobe, lit from inside by a single white lamp. On a metal tray sat a black laptop battery pack, no bigger than a bar of soap, with thin wires running from it to a rack of instruments. Tomoya felt the cold sweat of palms that were not his own and the slow thud of a heart that was not his own either. Beside him stood a man in a white coat with a battery maker's name stitched on the pocket, and the man's face was the colour of paper. At the instrument rack, a technician counted aloud in a flat voice.

'Pack eleven. Forty-one degrees. Forty-four. Fifty-two.'

The pack began to hiss. A thin thread of smoke leaked from one corner. Then, with a crack like a branch breaking, the casing split and a tongue of white fire shot out sideways, spitting sparks. The chamber's vents roared open, and smoke boiled against the glass. The pack went up entirely in a bloom of yellow and orange so bright that it printed the wire mesh of the window on Tomoya's eyes.

Nobody spoke. The man in the white coat turned and bowed deeply from the waist to the man whose eyes Tomoya was looking through. When he spoke, his voice was scraped raw.

'Sakurai-san. That makes four out of sixty-three. They are packs from the lot we shipped in September, the replacements, and the cells came off the same line as the ones recalled in August. We found the metal particles and we believed we had cleaned the line. We were wrong. I am very sorry.'

Sakurai's thoughts rolled through the concrete room like a bell.

Replacements. The ones we handed out as the cure. Four in sixty-three. And the same lots went to the other makers, Apple's, Lenovo's, Toshiba's. Seven million cells in the field, perhaps more. Sony's board has decided. They will announce on Thursday morning, before the market opens, and every maker will issue the same notice in the same hour so that nobody is first. A hundred billion yen at the least. Tomorrow at nine, Sony's people are coming to this hotel to settle who pays for what. And the market knows nothing. The market believes it ended in August.

The test room dissolved.

Mahogany. Beeswax. The pianist, who had barely reached the end of her phrase. Sakurai was staring up at him with his mouth slightly open, and for a moment Tomoya thought the man had seen something in his face. Then Sakurai looked away and rubbed his eyes.

'It's nothing,' he said, hoarsely. 'That will be all, thank you.'

'I apologise for troubling you, sir.' Tomoya bowed, and withdrew across the carpet with his tray held steady and his legs feeling like wet paper.

He stood behind the bar for a long time, polishing a glass that was already clean. In August, the first maker had recalled four point one million battery packs, the largest recall the computer industry had ever known, and Apple had followed ten days later with one point eight million. In September, it had been the ThinkPads. Every pack had carried the same name on its cells: Sony. The shares had dipped and then recovered, because the market had decided, as markets do, that the bill had been paid. On the staff terminal in the corridor, he found that Sony had closed that afternoon at four thousand nine hundred and ten yen, a little short of five thousand and close to its highest in months. And the one man in Japan who knew otherwise was sitting at table 15, not touching his whisky.

He went back to the bar, picked up another glass and thought about what it would cost.

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Wednesday broke clear and bitterly cold, the first real winter morning of the year. The puddles in the lane had skinned over with ice, and breath hung in the air like smoke. Inside the old press works, the Probat was running its first batch of the day, and the smell of roasting coffee drifted through the building with the steady warmth of a stove. Beyond the wall, in the café, the morning queue was already out of the door. The foremen from Arata's site stood stamping their boots and blowing on their flasks, and a few young engineers from the Mitronix compound stood among them with their hands in their armpits.

In the little plywood office behind the roaster, a space heater ticked at their ankles. Tomoya had swapped his Wednesday and Thursday shifts at the hotel, and Kaito had initialled the form without a word. He sat at the trestle table in his shirtsleeves, with the ThinkPad open in front of him and the Matsui Securities Netstock screen glowing grey and green. Eichiro, in a cardigan, sat opposite with a mug of coffee going cold between his hands. Ryuhei stood against the wall with his arms folded.

'We're going to sell something we don't own,' Tomoya said.

Eichiro put down the mug. 'Explain that to me as if I were a fish wholesaler.'

'It's simpler than it sounds.' Tomoya took a sheet of paper and wrote on it. 'Sony is at four thousand nine hundred yen a share. I think that by Thursday afternoon it will be a good deal lower. So I borrow a hundred Sony shares from the brokerage, through the exchange's lending system, and I sell them today for four hundred and ninety thousand yen. On Thursday I buy a hundred shares back at, say, four thousand five hundred, for four hundred and fifty thousand, and hand them back to the lender. The forty thousand difference is ours.' He turned the paper round. 'It's what we did with Kyoto Glass, upside down. The brokerage wants thirty per cent as a deposit, and charges a small lending fee, a little over one per cent a year, counted by the day.'

'And if it goes up?'

'Then we lose, by the same arithmetic.'

'No.' Eichiro shook his head. 'It's worse than that, and you know it. If I buy a share, the most I can lose is what I paid for it, because it can't fall below nothing. If I sell one I haven't got, there's no ceiling. It can go to the moon, and I still have to hand it back.' He tapped the paper. 'People have lost their houses over this, Tomoya. Companies have lost everything.'

'In theory. In practice I'll put in a stop order. If Sony touches five thousand two hundred, the system buys back automatically, whatever I'm doing. The most we lose then is a little over a hundred and twenty million.'

'Which is a great deal of money.'

'It is. It's what the bet costs if I'm wrong.'

'And are you wrong?'

Tomoya looked at him steadily. He had already thought of what to say, and he disliked how easily it came. 'The man was at table 15 last night, talking on his mobile by the lifts. He was speaking Japanese, and he didn't lower his voice. He said the maker was going to announce a second recall on Thursday morning, a bigger one, and that Sony would pay for all of it.'

Eichiro said nothing for a long time. Behind his glasses, his eyes moved slowly over Tomoya's face, and Tomoya held still and let them.

'You keep hearing the most remarkable things in that lounge,' Eichiro said at last.

'People forget that waiters are there.'

'People forget a great many things.' Eichiro looked down at the paper. He did not ask again, and Tomoya understood that it was a kindness, and that it had a limit.

Ryuhei unfolded his arms. 'May I say something, Boss? About size.'

'Please.'

'I rang Matsui's corporate desk yesterday, as a matter of routine. For a company of our age, their ceiling on short positions is two billion yen. Not a yen above.' He pushed his glasses up his nose. 'It suits me. Sony trades about nine million shares a day, roughly forty-odd billion yen. Two billion is under five per cent of that, and a man who sells it in small pieces is a drop in a very large sea. If you wanted twenty billion, we'd be half the day's market, and anyone with a screen could see us coming.'

'Then it's two,' said Tomoya. 'Six hundred million as the deposit. That leaves us a little over two hundred and fifty million for everything else.'

'And the shares themselves?' said Eichiro. 'How do you sell two billion yen of Sony without everyone noticing?'

'The big funds use programs that sell in tiny pieces, in step with the day's volume. We haven't got one, so I'll do it by hand.' Tomoya tapped the screen. 'Ten thousand shares at a time, every few minutes, all day. There's also a rule that a short seller can't sell below the last traded price, so I can't dump into a falling market. Each piece has to sit at the last price and wait for a buyer to come to it. It's slow and boring, which is exactly what I want. Nobody notices boring.' He drew a line under the figures. 'And tonight I write the file. A page of reasons, from public sources only, why a careful analyst might think the market had priced the August recalls as finished and doubted the replacements. Nothing in it that a careful man couldn't have thought for himself.'

'The Surveillance Commission,' Eichiro said quietly.

'It will look at everything that moves before Thursday. I'd rather it found a sensible file.'

Eichiro looked at the margin agreement lying face-up beside the keyboard, with a blank line for the representative director's seal. He took the hanko out of his cardigan pocket and held it in his palm for a moment.

'It's the third time since September that I've put this on something that could take my house,' he said.

'You can say no.'

'I know I can.' He inked the seal from the little tin of red paste and pressed it down, and the red shone wet on the page. 'That's rather the trouble.'

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The first order went in at one minute past nine.

Sell short. Sony Corporation (6758). 10,000 shares. Limit 4,910. Margin. It sat on the board for four minutes before a buyer took it. Then the screen blinked and another line appeared, and Tomoya sent the next. In the café, the espresso machine hissed and the queue shuffled forward, and every few minutes, Eichiro came in with a fresh cup of coffee, set it down and went out again without a word.

By eleven, he had sold twelve lots. By the lunch break, nineteen. He did not look up from the screen. The price crept in one direction and then another, four thousand nine hundred and twenty, nine hundred and ten, nine hundred and fifteen, and he left each order exactly one tick above the last trade and waited. Once, Ryuhei came in and stood behind him for ten minutes without speaking, then went out again, nodding slightly.

At 2:57, he sent the forty-first. Forty-one lots of ten thousand shares came to four hundred and ten thousand shares, sold at an average of four thousand nine hundred yen, a little over two billion in all. At three o'clock the board froze, and Sony closed at four thousand nine hundred and ten.

Tomoya sat back and let out a long breath. The back of his shirt was soaked. There was nothing to do now but wait.

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At twenty-five past eight on Thursday morning, the door of the little office was shut and the roar of the morning rush came through the wall like surf. Eichiro was on his third cigarette. His hand shook, and a long grey worm of ash fell onto his trousers without his noticing. Ryuhei stood with his arms folded and his jaw set so hard that a small muscle ticked in his cheek. Tomoya sat motionless with one hand on the mouse, looking at the clock in the corner of the screen.

8:27. 8:28. 8:29.

At 8:30, a line appeared at the foot of Matsui's disclosure feed, between a Fukuoka bank and a firm that made sewing machines. It was written in the flat, bureaucratic Japanese of every timely disclosure. Sony Corporation: Notice Regarding Expansion of the Voluntary Replacement Programme for Lithium-Ion Battery Packs.

Eichiro made a small sound.

Tomoya clicked. It was a single page of black type. The company announced that further testing had shown that replacement packs shipped from September could, in rare cases, present the same fault as those recalled in August. It would extend the programme by approximately seven million packs, in cooperation with its customers. The expected cost was approximately a hundred billion yen, to be reflected in its results. In the same minute, in the English-language news from New York, where it was early evening on Wednesday, three of the world's largest computer makers issued their own statements. They used almost the same words.

For a moment nobody said anything at all.

At 8:40, the pre-open board for Sony came up, and it had changed. The usual neat staircase of figures had gone. In its place a single red number stood in the middle of an almost empty field. Special sell quote: 4,780. As they watched, it flickered and fell. 4,740. 4,700. 4,660. The sell orders piled up beneath it, three hundred thousand shares, six hundred thousand, a million, while the buy column stayed thin and pale.

'Is it going to stop?' Eichiro whispered. 'Like Kyoto Glass, only the other way?'

'Not today.' Tomoya's voice was quiet and level. 'The exchange limits a share at this price to seven hundred yen either way, about fourteen per cent. Sony's far too big for one piece of news to push it that far. Kyoto Glass was a small firm with no sellers. Sony has millions of holders. Some want out and some think it's a bargain, and it will find its level somewhere in between.' He took a breath. 'We want a good day, Mr Eichiro. Not a miracle.'

At 9:00 the market opened. Sony opened at four thousand six hundred and forty yen, down five and a half per cent, and kept sliding. 4,610. 4,590. By five past nine, the price had dropped three hundred yen in as many minutes, and the red figures on the screen rolled over like a slot machine.

Tomoya's hand moved.

Buy to close. Sony Corporation (6758). 100,000 shares. Market.

The order filled in under a second, at an average of four thousand five hundred and ninety.

'You're covering?' Eichiro said, in a high, strained voice. 'It's still falling.'

'I know why it's falling. I don't know where it stops.' Tomoya did not look round. 'Nobody does. A man who waits for the very bottom is a man who gets greedy, and a greedy man gives it all back.'

Ryuhei said nothing, but the muscle in his cheek had stopped ticking.

At twenty past nine, he bought another hundred thousand at four thousand five hundred and ten. At 9:41, with the screen showing the day's low of four thousand four hundred and twenty, down nearly ten per cent, he bought a third hundred thousand at an average of four thousand four hundred and fifty. At that point, a small, dry bounce began, the first sign that the market had decided it had gone far enough. At twelve minutes past ten, with the price back at four thousand five hundred, he bought the last hundred and ten thousand.

Order filled. Short position: 0 shares.

He took his hand off the mouse. For the first time in two days, he realised that his fingers hurt.

The market rallied slowly through the rest of the morning, and Sony closed at four thousand five hundred and sixty, down just over seven per cent, the worst day it had had in years. By then, Tomoya was no longer looking at it. He was looking at a grey line at the bottom of the Matsui page.

Realised profit: ¥159,000,000.

Eichiro was staring at the screen with his cigarette burning unnoticed between his fingers, and the long ash fell on his shoe. Nobody moved. In the café beyond the wall, a barista called out an order, and a table of students laughed.

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By the time the lights went out in Origin Coffee on Thursday night, it was snowing, a thin, dry, uncommitted snow that did not settle. In the little office, a single lamp lit the three men round the table, and the ThinkPad hummed quietly between them.

'Four hundred and ten thousand shares,' Tomoya said. 'Sold at four thousand nine hundred, bought back at an average of four thousand five hundred and twelve. A difference of three hundred and eighty-eight yen a share. A hundred and fifty-nine million, less fees and the lending charge.' He clicked refresh on the master account. The loading icon spun for a second. 'About a hundred and fifty-seven. Of which sixty-odd belongs to the tax office, so call it ninety-five that's really ours.'

The balance came up on the screen in clean, unarguable figures.

¥1,010,000,000.

Eichiro sat very still. He did not weep, as he had when Kyoto Glass paid out. He looked at the figure for a long time, took off his glasses and rubbed his eyes with finger and thumb.

'A hundred and fifty-nine million,' he said, in a small voice. 'In an hour and a half. It's what I'd earn in twenty years, give or take.' He put his glasses back on. 'I know it's wrong to feel pleased. I find that I do.'

'It isn't wrong,' Ryuhei said unexpectedly. He had not moved from the wall. 'Somebody was going to take the other side of that trade, sir. It might as well be somebody who has read the contracts.'

Tomoya said nothing. On the other side of his trade, he knew, there had been people. A man in Fukuoka who had bought a few hundred Sony shares for his retirement. A pension fund in Hokkaido. A salaryman who had followed the PlayStation queues and decided that the company was back. They had paid four thousand nine hundred for what was now worth four thousand five hundred and sixty, and they would never know that someone had stood at a pillar on the fiftieth floor and heard it coming. He thought of them for as long as he could bear to, and then he put the thought where he put everything else.

Deep in his chest, the hunger stirred and found the meal too small.

He closed the laptop. The click was quiet in the still room. He stood, straightened his cuffs with two precise movements and looked down at the two older men.

'Arata comes tomorrow night,' he said. 'It's the last trading day of the year, so everyone will be feeling generous. Mr Matsuda, I'd like the long table laid for four, the roaster running, and the room smelling of coffee when he walks in. Mr Eichiro, I need you to be exactly what you've always been, a decent hotel manager who got lucky with a boy.'

'And you?' Eichiro asked.

'I'm the boy.'

Eichiro looked up from the chair, and his voice was low and not quite steady. 'Are we going to crush him, Tomoya?'

Tomoya looked down at the man who had pulled him out of the river. For a moment, something in his face almost softened. Then the thin, razor-edged smile returned.

'No,' he said. 'We let him think he's a lion, and we work beside him. Lions grow old, Mr Eichiro. They sit in the sun and believe the grass belongs to them.' He picked up his coat. 'And when the time comes, we won't merely crush him. We'll take the whole pride.'