Chapter 140: Falling Stock Prices
by xennovelAs the stock price plummeted to 6,000 won, Jin Seo-yoon felt her lips burn with anxiety, unleashing her frustration on Director Im.
“President, it’s definite. The investment has already been approved by Son Hoon-jae, the president of Electronics. They’re currently negotiating the per-share price for equity participation. The stock price will rise again. Just be patient a little longer.”
True to Director Im’s confident prediction, the stock price, which had fallen to 6,000 won, suddenly rebounded, soaring back to 10,000 won in an instant.
It didn’t stop there. As if propelled by a turbo engine, it hit the daily upper limit day after day, finally breaking through the 20,000 won mark.
However, the moment the stock price reached 20,000 won, sell orders flooded the market as if on cue, triggering a three-day losing streak.
The fluctuating stock price elicited cheers from some and sighs of despair from others.
Throughout the latter half of 1999, the stock market’s focal point was the turbulent stock price of New Data Technology.
Just in time, CEO Lee Sang-soo also held an emergency press conference.
Rumors had been circulating on stock market websites for days, claiming, ‘SoftBank, led by Masayoshi Son, is investing in New Data Technology,’ and ‘They’re partnering with Yahoo for a NASDAQ listing,’ making it clear that a major announcement was imminent.
CEO Lee Sang-soo averted his eyes from the reporters’ flashing cameras, looking up at the ceiling. Once the conference hall quieted down, he began a brief presentation at the microphone.
As he continued with vague pronouncements about solutions to current issues and future visions, the reporters’ expressions grew increasingly sour.
The emergency press conference was proving to be a sham, filled with commonplace information and devoid of any real news.
CEO Lee Sang-soo kept glancing at his watch, and as noon approached, he concluded the presentation.
“The tedious part is over. It’s probably a good time to make the announcement now.”
As he shifted the topic, the reporters refocused their attention.
“New Data Technology has decided to partner with Soonyang Group to foster a global brand…”
He used the name ‘Group’ instead of ‘Soonyang Electronics’ to amplify the impact of the announcement.
The partnership agreement with Soonyang Electronics, involving equity participation, was scheduled for 11 a.m. today. To prepare for ‘any eventuality,’ tight security was maintained until the safe time slot, and reporters were only allowed into the conference hall after thorough identification checks.
The sell-off that occurred as soon as the stock market opened this morning must have been swept up by the manipulation forces.
In just a few hours, the stock price skyrocketed again, and the retail investors who had sold their shares in the morning session were forced to listen to the press conference news with a sinking heart.
As soon as Soonyang’s equity participation was announced, questions from reporters poured in. President Lee hedged or answered off the record when faced with difficult inquiries.
Oh Se-hyun, after confirming the news flash from the press conference, hastily made a few phone calls and then burst into hearty laughter.
“President Lee Sang-soo was trying to plan his escape, but he made a blunder. He shouldn’t have done that… unbelievable.”
“What’s wrong?”
“He sold one million of his shares to Soonyang Electronics. Now President Lee’s stake is around 10%. Soonyang Electronics has become the second-largest shareholder.”
The founder and CEO sold his shares. Although still the largest shareholder, this would provide an opening for problems later on. There was no way to avoid suspicion that he had planned to cash out and leave.
“Since he got 20 billion won in cash, won’t he do a rights offering? That’s the only way to increase capital, isn’t it?”
“Probably. He’ll likely put about 10 billion won into the rights offering. Still, he pocketed 10 billion won.”
Oh Se-hyun was worried about his junior, and I was worried about my aunt.
She might get caught up in the soaring stock price and forget our advice. She absolutely had to sell at 40,000 won to secure a fourfold profit. Only then would she experience the thrill of gambling and become intoxicated with victory, slipping out of our control.
From then on, we could just leave her alone, and she would collapse on her own.
How much money would she lose before crashing?
* * *
“Do-jun, do we really have to sell? Isn’t this foolish?”
“Sell, Aunt. Representative Oh’s instincts are almost always right.”
“It keeps going up.”
My aunt skeptically shoved the newspaper in front of my face.
“When the stock price drops, sell orders will flood in all at once. You know that. If you miss the timing by even a moment, it’s irreversible. We’ve already made enough.”
My aunt quietly called me aside, trying to avoid Oh Se-hyun’s nagging. But when the same words came from my mouth, she couldn’t hide her disappointment.
“Did you sell too? All of it?”
I had to answer carefully. After all, aren’t people the kind of creatures who get envious when their cousins buy land?
“We’ve already sold everything. At around 38,000 won. A 25-fold profit is enough, don’t you think?”
Of course, I was still holding onto it.
“What? T-twenty-five times?”
I spoke casually to my aunt, who was stammering with her mouth wide open.
“Yes. We bought it when it was listed. Was it 1,500 won?”
“Hey! Why didn’t you tell me beforehand?”
“Since it was company business, I didn’t know either. Investment firms always keep an eye on the stock market, so they didn’t miss the listing.”
“Even if the company bought it, your investment money would be included, right?”
“I don’t have much left now. It all went into Uncle’s election funds, and the Sangam-dong land I received in return is still there. I think about 500 million won went in.”
She probably wouldn’t hear anything else anyway. It was obvious that the only thing left in my aunt’s mind was the number 25.
“Aunt, there will be plenty of opportunities to earn pocket money in the future. Don’t be attached to it now. Sell it all.”
I couldn’t even imagine how much cursing I would endure because of what I was saying. Considering my aunt’s fiery temper, I had to be prepared for her grabbing my collar.
Since my aunt was in a position where she was temporarily ‘misappropriating’ company funds, she couldn’t take any more risks.
In the end, I only received a call saying she had sold everything when it was slightly over 40,000 won. She didn’t tell me how much she had invested or how much profit she made.
I convinced my aunt, but an even more difficult mountain stood before me.
Oh Se-hyun was so dumbfounded that he didn’t even raise his voice.
“Two hundred and fifty thousand won? Is that your prediction?”
“It sounds absurd, doesn’t it?”
“You know it. That’s a relief. I thought you’d gone crazy.”
“But Uncle, think about it carefully.”
“About what?”
“Whenever I’ve said something that sounded crazy, what was the result?”
“That’s why I’m staying put. Otherwise, I would have taken you to the hospital or gone after whoever fed you that nonsense.”
He knew he couldn’t win against my stubbornness, and he also knew that even though it sounded crazy, there was a chance that unbelievable results might happen again.
“I’m going to liquidate. My personal investments, I mean.”
I smiled at Oh Se-hyun, who was accepting it more easily than expected.
“You’ll regret this. Hehe.”
* * *
If no ordinary investors or manipulation forces had been involved with New Data Technology, what would the stock price have been?
Although it was the peak of the venture boom, anyone in Yeouido could sense that it was nearing its end.
20,000 won? 40,000 won? Perhaps that was the maximum?
When the stock price was teetering around the 50,000 won mark, unable to break through, a piece of good news ignited its momentum.
CEO Lee Sang-soo personally announced a new business model aimed at listing on the US stock market.
The media was also part of the scheme.
They devoted significant space to promoting ‘Dialpad,’ a product that utilized the ‘VoIP (Voice over Internet Protocol)’ technology announced by CEO Lee.
They were quick to praise its superior technology compared to ‘venture wannabes’ whose stock prices were soaring for no reason, merely riding the KOSDAQ wave.
They touted the 500,000 members gained in a short period but completely concealed the fact that profits were declining as the number of subscribers increased.
The opinion that a significant portion of the 500,000 subscribers were university students with low spending power, which would limit the effectiveness of Dialpad’s advertising promotions, was nowhere to be found.
When the faltering stock price surged again, hitting 100,000 won, Oh Se-hyun turned pale.
“Everyone’s gone mad. The market capitalization is now in the trillions of won. For a company with 30 billion won in sales and a deficit, this stock price is insane, there’s no other way to explain it.”
“Are there any people buying stocks now who are considering such things? The prevailing sentiment is that you’re a fool if you miss out on this frenzy.”
“This will crash at any moment. It’ll all become worthless paper. It could be tomorrow.”
Oh Se-hyun became increasingly anxious as the stock price rose, urging me to sell the shares quickly.
“Uncle, even if my prediction is wrong, the company will only lose 3 billion won, and I’ll lose 500 million won of my personal money, right? Even if Miracle loses about 3 billion won, it won’t be noticeable. The same goes for my money. Let’s watch it until the end.”
It was true.
Even if it crashed right now due to unforeseen circumstances, there would be nothing to regret or feel sorry about. My only concern was that my aunt might re-enter this game.
Having tasted the sweetness of a fourfold return in a short period, the amount of money was too substantial for her to stay still. Isn’t she the peculiar type who considers hundreds of millions of won like the money in an average person’s wallet?
* * *
Having sold all her shares at 40,000 won based solely on Jin Do-jun’s words, Jin Seo-yoon was infuriated when the stock price surged once again, as if mocking her. She couldn’t focus on her work.
However, the stock price continued its upward trend, and Jin Seo-yoon began buying again, secretly, without anyone knowing except Director Im, who was in charge of procuring the funds.
A gambler who has tasted the thrill of making a large sum of money with a single choice and decision will keep playing even if their wife is caught and used as collateral. Jin Seo-yoon was no exception.
A gambling den where a fourfold return wasn’t the limit, but 25-fold was possible.
She paid the businesses in the department store with promissory notes. From the cash flow coming in from 11 department stores and hotels, she poured everything into New Data Technology, except for the essential payments, thinking it would be over in two months at most.
Furthermore, she paid high commissions to players in the Myeong-dong private loan market and started trading under borrowed names, intending to keep all the profits as slush funds.
Initially, she was able to secure a significant amount with 10 billion won, but as it surpassed 100,000 won, the volume she held significantly decreased.
Of course, the stock price continued to rise, but as she ‘misappropriated’ too much money, anxiety began to creep in. Director Im’s worries, constantly fueling her unease, also played a part.
“President, at this rate, we won’t be able to stop the rumors. There are even whispers that the promissory notes might bounce due to financial difficulties.”
“Ignore them. It’ll be over by the time they confirm the rumors.”
“But….”
Jin Seo-yoon couldn’t hold back her anger and shouted.
“Do you know what the current unemployment rate is? Our department store minimized restructuring. Should we follow Soonyang’s other subsidiaries, or even Daehyun Group or Jungil Group, and lay off more than half the employees to knock some sense into them?”
“I-I’m sorry.”
“Keep your mouth shut. If you can’t stop the rumors, you’ll see what real restructuring looks like. I’ll replace more than half of the tenants and demote the hotel staff from manager level down to temporary positions. Do you understand?”
Even as she yelled and rebuked, Jin Seo-yoon’s mind was uneasy.
She wanted to stop at this point, but her mind changed whenever she looked at the stock price fluctuation chart. Seeing the steadily rising graph, she could see that a month’s worth of department store profits was being generated in a week.
Feeling anxious, she called people who could put her mind at ease—people who would say things that would allow her to sleep soundly.