The Conglomerate Family Became A Villain [EN]: Chapter 275

275. The Big Short (1)

$49.99.

This wasn’t the price of a color TV during a Black Friday sale.

It was Victoria Corporation’s closing price on May 9th.

After the market closed, Robert, Sarah, and Jung Hyun-woo sat down together.

“Is it okay to have a meeting about stock prices during work hours?”

Robert spread his hands and replied,

“Of course, it is. We’re a corporation, and it’s natural to think about the interests of our shareholders.”

Jung Hyun-woo shrugged and turned to Sarah.

“What do you think, Sarah?”

Sarah sighed briefly.

“Well… as COO, I have to say that this decline is something we can’t ignore.”

The reason $49.99 was significant was that it proved Victoria Corporation’s market capitalization had fallen below $100 billion in just six months.

“Could it be that the Nasdaq is just generally doing poorly?”

Sarah responded coldly to Jung Hyun-woo’s question.

“Charlie, why are you acting like you don’t know?”

The Nasdaq wasn’t doing badly.

It had risen 8% compared to January, injecting vitality into the American IT industry.

Some people even said that if it weren’t for Victoria Corporation’s slump, the Nasdaq would have risen by more than 10%.

“I guess we have to surrender.”

Sarah raised her voice slightly.

“Do you think there are short sellers [investors who bet on a stock’s decline]?”

“If not, how else can we explain only our company’s stock falling like this?”

Sarah sighed inwardly.

‘Ha… Charlie knows the answer but is just beating around the bush.’

She found his reluctance to face the situation uncharacteristic.

“Charlie, there are no short sellers.”

Robert stated firmly.

“Robert?”

“I’ve checked with JP Morgan and Bank of America.”

“They might have shorted it…”

Robert cut him off.

“Charlie, why are you beating around the bush when you know better than us?”

He knew that Jung Hyun-woo was constantly on the phone with John Pier [likely a contact at JP Morgan] and also talking to Lyra Marine at Bank of America.

Jung Hyun-woo stuck out his tongue at his sharp question.

“I guess I was wrong.”

“Charlie! Don’t try to weasel your way out of it like that!”

Jung Hyun-woo closed his eyes and said,

“I just… I didn’t expect people to react like this.”

This was sincere.

He had made a lot of money in Japan through Victoria Fund and was pouring that money back into the Nasdaq.

However, investors’ reactions were cold.

First, they didn’t support Victoria Fund’s withdrawal from Japan, and second, they considered his Nasdaq investments to be misguided.

“Charlie, should we change it now?”

Sarah asked, suggesting a change in investment direction.

Jung Hyun-woo answered with his eyes closed.

“Sarah, I don’t think the direction we’re going is wrong.”

Sarah picked up his words.

“The Japanese bubble will collapse, and the Nasdaq and the IT industry will lead the American economy?”

“Isn’t that what we believe and why we’re gathered here?”

Robert answered his question.

“We believe that, but the problem is that investors don’t.”

Wall Street, as well as American economic media outlets, were criticizing Victoria Corporation’s investments daily.

Jung Hyun-woo clicked his tongue inwardly every time he heard their criticism.

‘They were talking about the Japanese bubble before, so why are they criticizing us now?’

The American media’s tone changed when funds and investment firms that invested in Japanese real estate began to make significant profits.

‘They’re blinded by money. Japan is a bubble.’

Jung Hyun-woo opened his eyes and asked,

“So, are you saying we should go back into Japan?”

Buy back the real estate sold to Kajima Group [a Japanese construction company] at a higher price.

It was impossible.

No, it shouldn’t happen.

Robert strained his neck and said,

“Charlie, that’s not what we’re saying.”

Jung Hyun-woo raised his voice slightly at his words.

“What do you mean that’s not what you’re saying? Then what are you saying we should do?”

“I think it would be good to reduce investments in the Nasdaq.”

Robert wanted to steer the meeting in a moderate direction.

‘I shouldn’t provoke Charlie here.’

He knew that Jung Hyun-woo was in a sensitive state.

“Reduce investments in the Nasdaq, huh.”

Sarah stepped in to support Robert.

“How about disclosing that we’ve over-invested in Apple and Microsoft?”

Jung Hyun-woo scratched his head.

“Do we have to disclose that?”

“The people who invested in our company want that.”

They didn’t care about investors’ opinions when investing in Japan. But with the stock price falling sharply, they couldn’t ignore investors’ opinions.

“That’s not good.”

Sarah and Robert knew that he wasn’t someone who changed his mind easily.

“Then how about spreading rumors that it’s because of the American government?”

Jung Hyun-woo asked Robert.

“That our withdrawal from the Japanese market was due to pressure from the American government?”

“Yes.”

Jung Hyun-woo’s voice grew heavy.

“Then investors will run away even more, won’t they? They’ll think Victoria Fund is a company that can’t invest as it pleases.”

Moreover, the opposition party could turn the Victoria Fund incident into a gate [a political scandal], claiming it was economic oppression by the government.

‘It’s never good to get involved with politics.’

His thinking was correct.

Robert placed both hands on the table and said,

“Maybe our company’s stock price had a bubble.”

Victoria Corporation was definitely a good company. But when asked if it was a company that could become the number one in America, many people had doubts.

In particular, many people paid attention to Victoria Fund. Victoria Fund had invested in the Japanese real estate market and made astronomical profits.

However, Victoria Fund was not an affiliate of Victoria Corporation. This was because Victoria Corporation only had a 30% stake.

“So, you’re saying we should cleanly admit defeat.”

Robert nodded.

“Charlie, think back to when we first started JP Services. Didn’t we think even $10 billion was amazing?”

When they were just planning JP Services, no one thought about a market capitalization of $10 billion for the current company.

Even Jung Hyun-woo only talked about $10 billion after JP Services opened.

“Let me think about it.”

Robert’s words applied not only to Jung Hyun-woo but also to him and Sarah.

‘Let’s not try to artificially prop up the stock price. Maybe Robert’s words are the most realistic.’

Robert was a very sensible businessman.

“Robert, how far do you think it will sink?”

Robert answered Jung Hyun-woo’s question.

“It could drop to $30.”

Jung Hyun-woo and Sarah groaned simultaneously at his answer.

“Ugh…”

“$30 won’t be easy.”

Robert said,

“Even if it drops to $30, the market capitalization will still be $60 billion.”

$60 billion.

This was a huge amount, four times the annual budget of South Korea.

“Let’s think about it a little more.”

With Jung Hyun-woo’s words, the meeting ended without a conclusion.

* * *

May 27th.

Fenway Park in downtown Boston.

A Boston Red Sox home game.

Jung Hyun-woo and Sarah were watching the game in the infield seats, not the VIP room.

The problem occurred at the end of the 5th inning.

An old man approached him and raised his voice.

“Charlie, you’ve wiped out my retirement fund!”

A security guard standing in the hallway approached when he heard the excited voice.

“Is there a problem?”

Jung Hyun-woo answered gently instead of getting angry.

“It seems there’s something wrong with our company’s products.”

He turned to the old man who had raised his voice.

“Sir, Victoria Corporation’s stock price will rebound soon.”

“Soon? It just keeps falling!”

Victoria Corporation’s stock price was down about 25% from its peak.

Considering that other Nasdaq stocks had risen, Victoria Corporation’s 25% drop felt even greater.

Jung Hyun-woo stood up and said as politely as possible,

“Sir, please be patient.”

The old man’s criticism continued.

“If you have time to watch baseball here, you should be thinking about saving the company!”

Jung Hyun-woo bowed again and apologized to his criticism.

“I’ll work hard.”

His appearance of apologizing to the old man was that of a polite Asian man himself.

Was that why?

One by one, the surrounding spectators began to take Jung Hyun-woo’s side.

“Hey, don’t be too hard on Charlie.”

“Charlie pays a lot of taxes in Boston.”

“Stop it. My brother also works at Victoria Corporation.”

“I also have Victoria Corporation stock, but I’m holding on.”

The old man narrowed his eyes as the people around him protested.

“My money is gone!”

Jung Hyun-woo, seeing that the 6th inning was about to begin, turned and apologized to the people around him.

“I’m sorry for causing a disturbance.”

He took Sarah’s hand and tried to leave the stadium.

“Charlie, are you okay?”

Sarah asked, and Jung Hyun-woo shrugged and replied,

“I could definitely tell that our company’s shareholders are angry.”

He knew that changes in stock prices were not just numerical changes.

‘Still, it hurts to actually meet a protesting shareholder.’

When they reached the hallway, the bodyguards followed.

“I didn’t step in because the other party was an old man.”

Jung Hyun-woo nodded at the head of the security team’s words and said,

“You did well.”

He left the stadium with the bodyguards and headed home.

The bulletproof S-Class left the parking lot and entered the road.

Sarah held Jung Hyun-woo’s hand and said,

“Charlie, I think it would be better to refrain from external activities for the time being.”

She was quite surprised by what happened today.

‘To think I couldn’t even watch baseball properly at the stadium.’

The protests of angry shareholders were not just happening on Wall Street or at shareholder meetings.

“I think that would be a good idea.”

He wouldn’t get shot in the street, but he might get hit with rotten eggs.

“I think I need to rethink Robert’s story.”

“You mean give up defending the stock price?”

“Yeah.”

Sarah thought she couldn’t just sit back and watch the stock price fall like this.

“Sarah, I have an idea. Would you like to hear it?”

Sarah tilted her head and asked,

“What idea?”

Jung Hyun-woo replied,

“Let’s list Victoria Fund [take it public on the stock exchange].”

Sarah’s eyes widened like full moons.

“List Victoria Fund?”

“If we apply for an IPO [Initial Public Offering] on the New York Stock Exchange, wouldn’t the stock price rise?”

Currently, Victoria Fund was the largest unlisted investment firm.

“You’re saying you’re going to officially enter Wall Street?”

“If Victoria Fund’s IPO is successful, Victoria Corporation’s stock price will rebound.”

Jung Hyun-woo’s words were correct.

If Victoria Fund’s IPO was successful, Victoria Corporation’s stock price could break through $50 again.

But there were problems.

“If Victoria Fund is listed on the New York Stock Exchange, you won’t be able to freely move money in and out.”

Listed investment firms had an obligation to prioritize disclosure when making large-scale investments.

“We can invest honestly.”

He meant that he wouldn’t lobby with slush funds like when he first invested in Japan.

“Hmm, let’s think about it a little more.”

Sarah didn’t accept his proposal right away. She thought she needed to hear more expert opinions.

* * *

June 3rd.

Victoria Corporation’s stock price fell to $46. This also meant that the market capitalization of $90 billion was on the verge of collapse.

Jung Hyun-woo and Sarah left Boston for New York that day.

“Welcome to Wall Street.”

The person greeting them with a bright voice was Peter Lynch.

Sarah and Jung Hyun-woo had visited Magellan Fund [a well-known investment fund], not Victoria Fund.

“Hello.”

Jung Hyun-woo and Sarah knew that he was making an effort to greet them with a bright face.

‘He must be thinking about how we feel.’

As Sarah and Jung Hyun-woo sat down, Peter Lynch cleared his throat lightly.

“Ahem, ahem. It’s difficult to bring back a customer who has left.”

Sarah raised her voice slightly.

“Are we customers who have left?”

Peter Lynch smiled and replied,

“You used to be VVIP customers [Very Very Important Person].”

“Not anymore?”

“Now you’re VIPs.”

Sarah burst out laughing at his customer service.

“Peter has become a more interesting person than before.”

“Really?”

“Yes.”

Peter Lynch’s Magellan Fund had achieved amazing results over the past few years. Nevertheless, his attitude and expression remained unchanged from before.

“We came today because we have something to discuss.”

At Sarah’s words, Peter Lynch spread his hands.

“Customers, what is it? Magellan Fund always loves its VIP customers.”

“Love is a bit much. Charlie says he has a new plan.”

Peter Lynch turned his gaze to Jung Hyun-woo.

“Charlie, another new plan?”

Jung Hyun-woo nodded slightly and raised his voice.

“I’m trying to enter Wall Street. What do you think, Peter?”

“Enter Wall Street? Do you mean you’re going to IPO Victoria Fund?”

Jung Hyun-woo nodded at Peter Lynch’s question.

“I’m considering that method.”

“Hmm…”

Peter Lynch sighed briefly without answering.

Jung Hyun-woo could tell that his sigh had a negative meaning.

“You mean it’s not good.”

Peter Lynch picked up his words.

“Victoria Fund’s returns have fallen sharply this year.”

Victoria Fund was still making a lot of money in 1988, but it wasn’t the same as last year.

‘The funds being managed have become too large.’

Jung Hyun-woo strained his neck slightly.

“Peter, if we make money like last year every year, we’ll become a black hole that sucks up money.”

Peter Lynch also knew that he couldn’t make money like last year.

“Charlie, if you list this year, it won’t be as good as last year.”

It meant that Victoria Fund’s assets had grown, but its vision had darkened in reverse.

Sarah intervened between the two and asked,

“Peter, how much do you think it will be roughly?”

Peter Lynch finished calculating in his head and answered.

“Since the assets being managed are $150 billion, the market capitalization will be about $20 billion.”

The market capitalization of investment firms was usually much lower than the assets they managed.

Jung Hyun-woo took the strength out of his neck and said,

“That’s much lower than I thought.”

Peter Lynch asked,

“How much did Charlie expect?”

“I thought it would be at least $50 billion.”

“To achieve a market capitalization of $50 billion, you’d have to make the same returns as last year this year as well.”

Jung Hyun-woo picked up his words in a dry voice.

“That would be difficult.”

Peter Lynch nodded and said,

“That’s why Victoria Corporation’s stock price is falling.”

He knew the real reason Jung Hyun-woo had come.

‘Charlie’s biggest concern must be the drop in Victoria Corporation’s stock price.’

Jung Hyun-woo put his hands together and asked,

“Peter, what will happen to Victoria Corporation’s stock price if Victoria Fund is listed?”

Peter Lynch replied coldly,

“It will fall.”

He was saying that the brilliant idea Jung Hyun-woo had thought of was not a brilliant idea.

Jung Hyun-woo felt his mouth dry.

‘Am I in a desperate situation?’

He had to find a new way again.