The Conglomerate Family Became A Villain [EN]: Chapter 161

The Key to Return (1)

Following Jung Hyun-woo’s City Center speech, Victoria Corporation’s value soared among investors.

John Peer, the head of JP Morgan Investment Bank, reported the projected market capitalization to Henri Arnault, adding his assessment.

“It seems Mr. Jung’s skills are even better than we anticipated.”

The most crucial aspect of an IPO [Initial Public Offering, the first sale of stock by a private company to the public] was its ability to attract investor interest.

In that regard, the City Bank and City Center speech were more than sufficient to capture investors’ attention.

“$28.2 billion? Isn’t that a bit high?”

Herni Arnault was skeptical that such a large sum would materialize.

“That’s not just my opinion, but the team’s consensus.”

Henri Arnault sighed softly.

“Hmm, was Charlie Jung’s performance really that impressive?”

“Several funds are already making moves.”

There were even rumors that Vanguard Fund was interested, suggesting even more activity behind the scenes.

“So, how much do you project will actually come in?”

“I think we’ll see over $10 billion in subscriptions.”

However, $10 billion in subscription funds didn’t guarantee that all of it would be used to purchase Victoria Corporation shares.

The amount Victoria Corporation was offering for subscription this time was only 10% of the company.

Moreover, since JP Morgan calculated the market capitalization at $28 billion, only $2.8 billion out of the $10 billion could be used to buy shares.

‘The real question is how the stock exchange will react to the remaining $7.2 billion.’

If investors who failed to secure Victoria Corporation shares in the IPO started buying on the open market, Victoria Corporation’s value would skyrocket. But if the opposite occurred, it could fall below the subscription price.

‘A successful subscription doesn’t guarantee success in the main market; many IPOs collapse after the initial offering.’

Wall Street, as he’d witnessed for twenty years, was inherently chaotic.

“Execute as planned, and report any issues to me immediately.”

“Understood.”

Herni Arnault placed John Peer in charge of Victoria Corporation’s IPO.

A successful IPO would significantly boost John Peer’s reputation and likely lead to another promotion.

‘Rapid promotion, huh.’

He hadn’t thought John Peer possessed that level of competence.

‘But luck is a skill in itself.’

Henri Arnault turned his head and looked at the sky. The setting sun was visible between the buildings.

“If luck is also a skill, then Charlie Jung’s skill can be considered extraordinary.”

A great success occurred when luck and skill aligned. He believed that Jung Hyun-woo had been presented with the opportunity for such a triumph.

* * *

While Wall Street was buzzing with investment fever, Robert was frowning deeply.

“This modular system sounds promising, but the feasibility seems incredibly low.”

He viewed the modularization concept presented by Jung Hyun-woo as something akin to a magic trick.

‘It’s something that only exists in cartoons.’

Jung Hyun-woo shrugged at his words.

“It might be impossible with current technology, but I believe it will be achievable in the near future.”

“Of course, it will be possible eventually. But Charlie said he would develop it within three years.”

“Isn’t three years from now considered the near future?”

Jung Hyun-woo was well aware of the rapid pace of IT development.

‘Even the simultaneous use of a mouse and keyboard, which feels awkward now, will soon become second nature.’

He recalled the IT revolution spearheaded by Intel, IBM, Microsoft, and Apple.

Moreover, Moore’s Law [the observation that the number of transistors in a dense integrated circuit doubles approximately every two years] was still holding true.

“Charlie, even if development becomes technologically feasible within three years, we lack the capacity to develop it. Aren’t we already short-handed developing City Services for City Bank?”

Jung Hyun-woo acknowledged the manpower shortage for City Services.

“That’s why we’re planning to recruit talent from the West Coast.”

His intention was to entrust the development of City Services to graduates from Stanford and the California Institute of Technology [Caltech]. Furthermore, he wanted to assign the modular system to individuals from Silicon Valley.

However, Robert shook his head.

“Charlie, that’s not enough.”

He believed that developing a modularized network system would require Victoria Corporation to double or triple its development staff.

‘Even if we move the headquarters to Silicon Valley, I’m not sure we can find that many qualified people.’

Hiring a large number of skilled workers was a challenge in any industry.

Nevertheless, Jung Hyun-woo remained committed to expanding the company by recruiting graduates from both coasts.

“Robert, wouldn’t it be possible if we aggressively recruited graduating students from top universities on the East and West Coasts?”

He envisioned attracting the brightest minds from Stanford, Caltech, MIT, Harvard, and Yale to Victoria Corporation.

But Robert didn’t believe that would be sufficient to fill all the necessary positions.

“Charlie, new employees are inexpensive, but they lack experience. This large-scale project requires a significant number of seasoned development professionals. Trying to complete it with inexperienced developers will take a decade.”

Robert’s voice rose, spraying saliva with each word.

He felt that Jung Hyun-woo had been barely managing to solve problems until now, but this modular system was beyond his reach.

‘This project can’t be solved through individual brilliance alone.’

The financial modular system was such a massive undertaking that it couldn’t be handled by a single genius developer.

‘In short, Charlie’s natural talent alone isn’t enough to make this project succeed.’

Sarah, who had been listening to their discussion, cautiously spoke up.

“Then this project faces two key challenges.”

Jung Hyun-woo nodded, acknowledging her point.

“Technical feasibility and manpower acquisition.”

Sarah looked at Jung Hyun-woo and continued.

“Charlie believes the first problem will be naturally resolved through technological advancements, and he’s attempting to address the second by establishing a West Coast branch, correct?”

“That’s right.”

Sarah turned her gaze to Robert.

“Robert, you don’t believe either of those are viable solutions?”

Robert answered firmly.

“The modularization project is too risky. If we fail here, we won’t recover.”

He seemed to consider the failure of the financial modular system a foregone conclusion.

Sarah assessed both their opinions before sharing her own thoughts.

“I’m not qualified to comment on the technical aspects, so I’ll defer to your expertise. However, I believe there’s a solution to the manpower issue.”

Robert tilted his head, surprised that Sarah, not Jung Hyun-woo, claimed to have a solution to the manpower shortage.

“Sarah, do you really think you can handle this problem?”

“Not just handle it, but solve it.”

Robert groaned softly.

“Hmm.”

Jung Hyun-woo was also curious about Sarah’s proposed solution.

“Are you suggesting an alternative to establishing a West Coast branch?”

He asked the question and pondered.

‘Is she suggesting a plan to attract experienced people from Silicon Valley to the West Coast branch?’

Offering competitive salaries could attract more mid-level developers than anticipated.

However, Sarah’s solution differed from his expectations.

“Charlie, what do you think is the primary reason for a company to go public?”

Jung Hyun-woo sighed briefly and answered her rhetorical question.

“Venture companies go public to secure substantial investment from investors.”

“And why do they seek investment?”

“Well, to fund their business operations, of course.”

Jung Hyun-woo tilted his head, noticing her repetitive questioning.

“Is there something wrong with that?”

Sarah nodded.

“There’s a fundamental flaw in that thinking.”

“What is it?”

Jung Hyun-woo had only asked for a solution, but Sarah was suggesting a problem with their underlying assumptions.

“I don’t think either of you fully grasp this simple concept.”

Robert frowned.

“Sarah, you seem to believe we can simply hire program developers with the money raised through the IPO. But it’s not that easy, which is why we’re expressing our doubts.”

He believed that Sarah was the one who didn’t understand the complexities of the situation.

Sarah turned to him.

“Robert, I’m not suggesting we simply post job advertisements and hire people.”

Robert raised his eyebrows.

“No, Sarah. How else do you hire people without advertising the positions?”

Jung Hyun-woo organized his thoughts.

‘Is Sarah planning a hiring system in partnership with universities?’

However, the top universities in the United States had already established such systems since the mid-1980s.

‘There’s not much room for us to innovate there.’

But Sarah didn’t seem to share that view.

“Robert, there’s a much faster and easier way than interviewing and hiring individual employees.”

Robert’s voice rose in frustration.

“Sarah! There’s no such easy solution, which is why Charlie and I are so concerned!”

Unlike him, Sarah remained calm. She responded in a low, gentle voice.

“Instead of hiring individuals, you can acquire an entire company.”

Robert froze.

“Acquire a company?”

Jung Hyun-woo’s eyes widened at her suggestion.

“You’re suggesting we acquire an IT company and leverage their entire workforce for our project.”

Instead of interviewing dozens or hundreds of candidates and hiring the necessary individuals, they would acquire a company with hundreds of employees already in place.

The cost would undoubtedly be high, but it would save a significant amount of time.

‘Moreover, this approach would allow us to secure the skilled developers that Robert emphasized.’

Jung Hyun-woo considered it a brilliant solution.

‘It’s a Columbus’s egg [a deceptively simple solution to a difficult problem]-level solution, but precisely what we needed.’

Sarah elaborated on the plan in a soft voice.

“The turmoil in the North American game industry hasn’t subsided. Companies like Activision and MIM barely avoided bankruptcy, but were acquired by private equity funds at bargain prices. What if we acquire one of those companies?”

Robert swallowed hard.

“You’re suggesting that instead of developing games, we have them develop the programs we need.”

“Since the nature of the programs they produce is different, there will be a learning curve. But it will be much faster than hiring new employees and training developers from scratch, right?”

Most of Victoria Corporation’s developers had been acquired through a similar process.

She envisioned transforming companies like Activision and MIM in the same way she had when founding Victoria Corporation.

Robert stroked his chin.

“Even if some people quit in the process…”

“It will still be significantly more beneficial to us.”

Jung Hyun-woo actively supported her proposal.

“The game market is slowly recovering, but it’s still in a slump. We can buy them from private equity funds at a discounted price right now.”

He didn’t mind paying a slight premium.

Robert listened to them both and sighed deeply.

“I was being short-sighted again.”

He blamed himself for failing to keep up with the ideas and insights of younger generations.

‘Am I already becoming obsolete?’

It was an age that would never be considered old in other industries.

But he belonged to the old guard in the IT field.

Jung Hyun-woo clasped his hands together.

“Sarah, please compile a list of software developers that are struggling or have already been acquired by private equity funds.”

Sarah smiled and acknowledged his request.

“Okay.”

Jung Hyun-woo turned to Robert.

“Robert.”

Robert shrugged.

“You want me to contact the listed companies and negotiate an acquisition contract?”

“It would be more effective if Robert took the lead, anyway.”

Robert’s age, experience, and media presence surpassed both Jung Hyun-woo and Sarah.

“Understood. As soon as the acquisition decision is made, I’ll visit the private equity fund or the company’s representatives and begin negotiations.”

It was his job to travel across the United States once again.

After the meeting, Jung Hyun-woo returned to the president’s office and spoke with Sarah.

“It would have been difficult to persuade Robert without Sarah’s proposal.”

Sarah was somewhat blunt.

“Charlie was mistaken this time.”

“Was the plan flawed?”

“Unlike Charlie, there were gaps in the blueprint.”

Jung Hyun-woo took a sip of coffee.

“I admit it. I made a sudden announcement and presented an incomplete blueprint to both of you.”

Sarah raised her voice slightly.

“Are you sure about this?”

“Now that a solution has been found, shouldn’t we proceed as planned?”

“Not the project, but the shares.”

Jung Hyun-woo had decided to offer his own shares instead of issuing new shares during this IPO.

“We plan to invest all the proceeds from the sale of shares back into the company.”

“Not that, but the shareholding ratio.”

If he offered 10% of his shares this time, Jung Hyun-woo’s shareholding would fall below 50%.

This meant he would no longer have sole control of the company.

“You have Sarah.”

Even if Jung Hyun-woo’s shares decreased, combining them with Sarah’s shares would ensure they retained over 50% control. Of course, Sarah was aware of this.

Sarah stared at him.

“Charlie, do you trust me that much?”

Jung Hyun-woo felt like he was repeating a familiar conversation.

“If I didn’t trust Sarah, I wouldn’t have founded Victoria Corporation in the first place.”

His trust in her was unwavering.

Sarah listened to Jung Hyun-woo’s answer and sighed deeply.

“Hoo… Absolute trust.”

Someone absolutely trusts you.

She didn’t dislike it.

* * *

Just before quitting time, Jung Hyun-woo received a call.

“This is Charlie.”

The voice on the other end sounded somber.

“Hyun-woo, it’s me.”

The caller was Shin Young-jin, the president of Samjung Electronics [Likely a fictionalized version of Samsung Electronics].

“Ah, President Shin.”

“I apologize for calling so early in the morning.”

Jung Hyun-woo smiled.

“It’s quitting time here.”

“Ah, that’s right. I forgot about the time difference because I was preoccupied with company matters at dawn.”

Jung Hyun-woo responded warmly, as if understanding.

“It’s alright. If you worry about the time difference, the contact will be delayed.”

What mattered was the content of the call, not the timing.

‘For someone like President Shin Young-jin to forget the time difference, he must have given this call a lot of thought.’

He had a hunch about the reason for President Shin Young-jin’s call.

“That’s…”

When President Shin Young-jin hesitated, Jung Hyun-woo prompted him.

“President Shin, you wouldn’t be calling unless it was important, would you?”

President Shin Young-jin sighed deeply.

“Hoo… I didn’t want to ask you again.”

Jung Hyun-woo knew from Michael Dell that Samjung Electronics was facing difficulties.

“I heard that DRAM [Dynamic Random-Access Memory, a type of computer memory] prices have plummeted.”

“You’re aware of that?”

“Recently, I heard that a $3 DRAM has dropped to $1.”

The DRAM price crash was a consequence of the semiconductor war between the United States and Japan.

“The shrimp’s back burst in the whale fight [an idiom meaning being caught in the crossfire between powerful entities].”

As of 1985, Samjung Electronics lacked the resources to compete in the semiconductor war between the two global giants.

“I’ve already spoken with Michael. You don’t need to worry about the contract for the time being.”

Jung Hyun-woo assured him that the contract between Samjung Electronics and Dell Computer wouldn’t be terminated.

But the Dell Computer contract wasn’t the reason for President Shin Young-jin’s call.

“It’s not about that.”

Jung Hyun-woo paused, surprised.

“You’re saying it’s not about the Dell Computer contract?”

“The contract volume with Dell Computer isn’t that significant.”

The volume contracted with Dell Computer represented less than 5% of Samjung Electronics’ total production.

In other words, even if the Dell Computer issue was resolved, the remaining 95% of the problem persisted.

“Hmm, is it a problem with another company?”

He wondered if there was another American company with a large supply contract with Samjung Electronics.

President Shin Young-jin shook his head.

“It’s not just a problem with a specific company.”

It was a problem affecting Samjung Electronics as a whole.

“Hmm. You mean…”

“Hyun-woo, would you consider buying corporate bonds?”

President Shin Young-jin was considering issuing corporate bonds to overcome the difficulties caused by the DRAM price crash.

At that moment, an idea flashed through Jung Hyun-woo’s mind. He lowered his voice.

“President Shin.”

President Shin Young-jin’s brow furrowed at the lowered tone.

“Is it difficult?”

“What are your thoughts on equity investment?”

Jung Hyun-woo wanted to acquire some of Samjung Electronics’ shares instead of buying corporate bonds.