The Conglomerate Family Became A Villain [EN]: Chapter 128

128. Heading to NASDAQ (1)

Robert McNamara served as the U.S. Secretary of Defense during the Vietnam War.

Appointed by the renowned President Kennedy, he was the first CEO of Ford Motor Company from outside the Ford family.

In essence, he was a professional manager, not a military expert. During the Cold War, he enhanced the efficiency of the U.S. Department of Defense and, by confronting hard-line military figures, arguably prevented World War III.

Of course, he wasn’t infallible. He couldn’t prevent the Vietnam War’s escalation and subscribed to the domino theory regarding communism’s spread [the belief that if one country falls to communism, neighboring countries will follow].

“Secretary McNamara’s speech?”

“I thought Charlie might be interested.”

Sarah mentioned that Secretary McNamara was scheduled to speak at the World Trade Center.

‘Now that I think about it, this is before 9/11, so the World Trade Center must still be standing in its original form.’

The World Trade Center, with its iconic twin towers, was the world’s tallest building upon completion in 1972.

Even in 1984, it remained one of the world’s tallest skyscrapers.

“Secretary of Defense McNamara—is this about war?”

“Of course not. He’s been the President of the World Bank for over 10 years.”

Robert McNamara’s tenure as President of the World Bank exceeded his time as Secretary of Defense.

This fact was not widely known, even to Jung Hyun-woo.

“Hmm. If he’s been the President of the World Bank for over 10 years, he’ll likely discuss the global economy.”

“Probably.”

“Shall we go?”

“It’s at 3 o’clock.”

Jung Hyun-woo frowned slightly.

“Isn’t the meeting with Mr. Arnault at 1 o’clock?”

“If we finish the meeting early, we should be able to make it, right?”

Sarah estimated about 30 minutes for travel, allowing them to arrive with a little time to spare.

“Let’s make a reservation first.”

Given the limited seating, they secured a reservation.

However…

The two were unable to attend Robert McNamara’s speech.

Firstly, the meeting with Mr. Arnault started later than planned, and due to conflicting viewpoints, it ran significantly over time.

Jung Hyun-woo checked his watch and frowned deeply.

“So, you’re suggesting we need to reassess the company’s valuation?”

Herni Arnault shrugged and replied.

“A significant event has occurred, so it’s only natural.”

He cited Bank of America’s stake acquisition as a reason to postpone Victoria Corporation’s IPO [Initial Public Offering – the first time a company offers shares to the public].

“Victoria Corporation experiences significant events every year. If we reassess the company’s value each time, when will we ever go public?”

Jung Hyun-woo insisted on proceeding with the IPO without delay.

‘Is JP Morgan reconsidering the listing?’

If JP Morgan wasn’t committed to listing on the New York Stock Exchange, they would need to find another partner.

‘This is an unavoidable choice.’

Herni Arnault raised his voice, as if deflecting blame.

“Mr. Jung, you’re not planning to sell shares every year, are you?”

He attributed the IPO delay to Jung Hyun-woo’s share sales.

Jung Hyun-woo didn’t back down and immediately retorted.

“Mr. Arnault, I don’t believe share sales are the only major events.”

He reminded Henri Arnault of the potential launch of City Service for Citibank or a completely new system for general companies.

Herni Arnault sighed briefly after hearing this.

“Hoo… If such innovative services are launched, I agree that the company’s value should be reassessed each time.”

If Citibank partnered with Victoria Corporation like Bank of America, the impact would be substantial.

‘The company’s value will at least double, if not triple.’

Herni Arnault estimated Victoria Corporation’s value could exceed $20 billion, potentially reaching $30 billion.

‘Market dominance will command a premium.’

A market capitalization of $30 billion represented over 30% of IBM’s value, the world’s leading company in market capitalization.

Sarah interjected.

“Mr. Arnault, wouldn’t it be difficult to reassess Victoria Corporation’s value every time an event occurs? Wouldn’t it be better to let the market determine the valuation?”

The idea was to list on the New York Stock Exchange and allow investors to evaluate the value of new products or events.

Herni Arnault frowned.

“Ms. Hilton, that’s difficult.”

He preferred to avoid uncertainty.

‘The stock price could rise absurdly, but the market might not properly value it.’

Jung Hyun-woo continued to object, clenching his fist and raising his voice.

“Mr. Arnault, if JP Morgan continues to make excuses, Victoria Corporation will have no choice but to find another partner.”

His words carried the weight of a final warning.

Herni Arnault hesitated, taken aback by his firm stance.

“Th, that is…”

He couldn’t help but wonder why Jung Hyun-woo was being so assertive.

‘Could it be that he’s breaking the deal with us and wants to work with Bank of America?’

If that happened, he would be in serious trouble.

‘Tch, I can’t follow in Neil’s footsteps.’

Herni Arnault didn’t want to retire prematurely like Neil Hamilton.

“I understand. Then we will definitely produce proper data by March.”

“March?”

Herni Arnault made a final attempt to delay.

“It won’t be any later than that. If the time extends beyond that, I won’t object if you find another partner.”

“You said we could find another partner?”

“That’s right.”

Sarah sensed that the disagreement was narrowing.

“Mr. Arnault, if proper data comes out in March, when can we go public?”

Herni Arnault turned to her and replied.

“If we follow the formal procedures, it will be October at the earliest. But we will proceed with the IPO process alongside the valuation of Victoria Corporation. This way, we can go public in May or June.”

The implication was that they could debut on the New York Stock Exchange by the summer of 1985 at the latest.

Sarah turned to Jung Hyun-woo and said.

“Charlie, I think it’s okay to compromise at this point.”

Jung Hyun-woo sighed deeply.

“Hoo… Okay. Since Sarah says so, let’s do that then.”

As he accepted the compromise, Herni Arnault gave an awkward smile.

“I’m glad we’ve reached an agreement.”

Jung Hyun-woo asked, as if casually throwing out a question.

“So, how much does JP Morgan value our company at?”

It was a question seeking their opinion, not a formal report.

Herni Arnault replied with a smile.

“That’s difficult to say.”

“Everything is difficult.”

“Words come with responsibility.”

Herni Arnault was acting like a politician.

Jung Hyun-woo didn’t appreciate his evasiveness.

“Mr. Arnault, do you know that?”

Herni Arnault forced a smile and asked back.

“Know what?”

“If you don’t take risks, you can’t get treasures.”

High risk, high return.

Herni Arnault chuckled inwardly at the advice from someone not even twenty years old.

‘A kid whose blood hasn’t even dried yet…’

However, he couldn’t voice this. Jung Hyun-woo was JP Morgan’s VVIP customer.

“I’ll keep Mr. Jung’s advice in mind.”

Just as he was about to rise from his seat, Sarah lightly tapped the table.

“Mr. Arnault, isn’t the meeting not over yet?”

Herni Arnault paused.

“Were there other matters besides the IPO?”

Sarah nodded.

“There’s the data center investment. You didn’t read the fax I sent, did you?”

She had sent a fax outlining the topics to be discussed prior to the meeting.

Herni Arnault sat back down.

“I remember seeing the term ‘data center,’ but is it important enough that we need to agree to it?”

Victoria Corporation, or rather Jung Hyun-woo, wanted to build a new data center.

Since JP Morgan owned 10% of Victoria Corporation’s shares, Jung Hyun-woo and Sarah wanted their input.

Jung Hyun-woo nodded.

“Victoria Corporation will build a large data center on the outskirts of Boston. It will be a facility that can be used for at least 10 years, or even 20 years.”

They envisioned a long-term facility.

‘That means it will cost money.’

In fact, Herni Arnault didn’t fully grasp the concept of data centers.

“Is a data center a place to store data?”

Jung Hyun-woo inwardly clicked his tongue.

‘He doesn’t even know what a data center is.’

When Herni Arnault joined JP Morgan, computers were still relatively new.

Jung Hyun-woo had to explain the necessity of a data center.

“JP Service generates a lot of data every day. This data is recorded on computer storage devices, not on paper. But computer storage devices have limitations.”

He summarized the reasons for a data center in a way Herni Arnault could understand.

Herni Arnault was quick-witted, so the explanation sufficed.

“So, you’re saying that a data center is needed because of the limitations of computer storage devices.”

“That’s right.”

“But do we at JP Morgan really need to be involved in such details?”

Herni Arnault considered it an unnecessary request.

‘Can’t they just build it?’

But his thoughts shifted.

“Mr. Arnault, what if the construction of the data center costs more than $100 million?”

Herni Arnault’s eyes widened.

“Did you say $100 million?”

“It could cost more than that.”

A data center involved more than just computers.

It required facilities to maintain optimal computer conditions and a network system connected to the outside world.

“That’s… If the construction cost is $100 million, it’s very difficult.”

In 1984, $100 million could build a dozens-story building in Manhattan.

“That’s why we wanted JP Morgan’s opinion.”

Victoria Corporation’s sales and net profit were steadily increasing.

Nevertheless, spending $100 million on a data center was a significant undertaking.

Herni Arnault frowned.

“Is that $100 million data center really necessary?”

“It seems like you don’t believe me.”

“It’s not about belief. I’m asking if it’s absolutely necessary.”

Jung Hyun-woo’s expression hardened.

“If you contact JP Morgan’s technology team, you can get an answer to that question.”

He was determined to build a data center.

‘Now that we’ve launched American Service, a data center is essential.’

Herni Arnault raised his right hand, palm facing out, signaling a desire for calm discussion.

“I understand. Let’s assume Victoria Corporation needs a data center. But does Victoria Corporation have the funds to build it right now?”

It was Jung Hyun-woo, not Victoria Corporation, who profited from JP Morgan’s stake acquisition.

Unless he invested money into Victoria Corporation, building a data center would be challenging.

‘If you want to build it, you should use your own money.’

Even if Jung Hyun-woo used his own money, it would indirectly affect JP Morgan.

If Jung Hyun-woo withdrew $100 million, JP Morgan’s account would be reduced by that amount.

“I want to do it half and half.”

Herni Arnault frowned.

“Half and half means…”

“I will invest $50 million in Victoria Corporation to secure initial funds. And JP Morgan will lend the remaining $50 million.”

Half his money, half JP Morgan’s money.

Herni Arnault shook his head.

“Impossible.”

He wouldn’t prevent them from building a data center, but he wouldn’t lend $50 million.

“Even with collateral?”

“It’s too large of a loan.”

“Don’t you also take out loans to construct buildings?”

“Aren’t the profits and value of buildings relatively fixed?”

Herni Arnault believed that, unlike buildings, data centers couldn’t be easily sold.

‘Isn’t it just like a factory line?’

Even if a factory line is sold, it rarely fetches its true value.

Jung Hyun-woo slowly nodded.

“I understand. I’ll explore other loan options.”

He considered the conversation partially successful.

‘I failed to secure a loan, but I obtained their consent.’

If no one offered a loan, he would build the data center with his own funds.

‘I have to build it anyway.’

Jung Hyun-woo waved his right hand.

“Let’s move on to the next topic.”

Herni Arnault raised his eyebrows at the word “next.”

“Are there any other items on the agenda?”

He had only prepared for the IPO and the valuation of Victoria Corporation and was now sweating.

‘Is there something else besides the data center?’

Jung Hyun-woo raised his voice slightly.

“Ms. Hilton should have included all the discussion points in the fax, correct?”

“…”

Herni Arnault had only read the first page of the fax.

‘This is troublesome.’

Jung Hyun-woo shrugged, as if resigned.

“The third item is a new collaboration between JP Morgan and Victoria Corporation.”

A new collaboration.

It was a topic requiring prior preparation.

‘I have to postpone this.’

Herni Arnault wiped his forehead.

“Mr. Jung, I don’t think we have time to discuss new collaborations today.”

Jung Hyun-woo frowned.

“Are you saying you have another schedule?”

Herni Arnault desperately wanted to leave. He nodded vigorously.

“That’s right.”

“Then when does that schedule end?”

Jung Hyun-woo was in a foul mood after missing Robert McNamara’s speech.

‘Tch, it would have been a valuable opportunity to hear the insights of someone who managed the Cold War.’

Of course, Robert McNamara’s speech wasn’t about the Cold War or war.

Herni Arnault leaned forward and asked.

“Mr. Jung, are you suggesting you’ll wait until my schedule is over?”

Jung Hyun-woo replied firmly.

“It’s an important topic.”

He wanted to conclude the third topic and return to Boston.

‘I don’t visit New York often, so I need to address everything while I’m here.’

Herni Arnault had no choice but to concede to Jung Hyun-woo, who was much younger.

“If you wait at the hotel, I’ll contact you.”

Jung Hyun-woo raised his right hand halfway.

“It’s inconvenient to return to the hotel, so I’ll wait at the New York branch [of Victoria Corporation].”

“I understand. Then I’ll contact you there.”

Herni Arnault left the conference room and sighed deeply.

“Hoo…”

He felt completely drained.

‘Damn it.’

If he had read the fax thoroughly, he wouldn’t be in this situation.

‘I don’t know how I ended up here.’

The reason he, usually meticulous, only read the first page was because he had underestimated Jung Hyun-woo and Victoria Corporation.

He thought he could easily handle the IPO.

That complacency and arrogance had cornered him.