The Conglomerate Family Became A Villain [EN]: Chapter 277

277. The Big Short (3)

Jung Hyun-woo and Sarah’s expressions darkened slightly upon hearing Jeremy Spin’s second plan.

“It seems you don’t like this idea.”

Sarah shook her head at Jeremy Spin’s question.

“That’s not it. It’s just that I came here having already considered this as a countermeasure…”

Jeremy Spin finished her sentence.

“You mean it’s not special enough.”

Jeremy Spin’s second solution was to open the Victoria Fund to the public and raise investment. He argued that if they could increase the investment to $500 billion, they could rebound Victoria Corporation’s stock price.

Jung Hyun-woo lightly raised his right hand and said,

“The problem is raising the investment.”

A $500 billion investment was higher than the market capitalization of NTT, the world’s number one company.

And that wasn’t all.

If they managed to raise $500 billion, the Victoria Fund would become the world’s number one fund.

‘The tail wags the dog.’

The Victoria Fund had to become the world’s number one to overcome Victoria Corporation’s crisis.

Jeremy Spin lowered his voice.

“$500 billion is from a long-term perspective.”

Jung Hyun-woo sighed briefly after hearing his words.

“Haa… Jeremy, we need a short-term rebound.”

In the long term, there would be no major problems because the Japanese economic bubble would collapse.

The problem was Victoria Corporation’s stock price, which was currently falling.

“For a short-term issue, wouldn’t it be better to look for something in the technical area?”

Technical area.

He meant strengthening marketing with Victoria Corporation’s new technology or products.

“Unfortunately, we don’t have anything like that right now.”

Jeremy Spin shrugged lightly after hearing his words.

“Charlie, there’s no need to worry too much. If Plan A goes well, Victoria Corporation’s stock price will rebound.”

He thought that the first plan he mentioned earlier would be enough to rebound Victoria Corporation’s stock price.

‘I don’t know how greedy Charlie is, but it will be possible to return to $100 billion.’

In fact, it was a great achievement just to have the market capitalization stay around $100 billion.

“Charlie, let’s try to increase the investment to $200 billion first.”

Jung Hyun-woo nodded at Jeremy Spin’s suggestion.

“Let’s do that.”

The three of them thought it was better to focus on Plan A since Plan B was nothing special.

It was when the three were focusing on the company’s stock repurchase.

Jung Hyun-woo lightly tapped the desk after hearing Jeremy Spin’s story that the value of the yen was continuing to rise.

Tap.

“Jeremy, that’s it!”

Sarah and Jeremy Spin raised their eyebrows at his exclamation.

“Charlie?”

“Charlie, did you have a good idea?”

Jung Hyun-woo nodded greatly and replied.

“The $500 billion. We’ll raise it in Japan, not the United States.”

Jeremy Spin’s eyes widened at his answer.

“Are you saying we should open the Victoria Fund not only in the United States but also in Japan?”

Jung Hyun-woo got up from his seat and gestured with his right hand. The gesture looked like a simulation gesture from a science fiction movie.

“As of 1988, all of America’s investment is heading to Japan. Even if we try to raise investment on Wall Street, it will only be about $20 billion to $30 billion. But Japan is different. Tokyo and Osaka are overflowing with money. If we dig into that area under the name of the Victoria Fund, we will definitely have a chance of success.”

Jeremy Spin stroked his chin with his right hand after hearing his answer.

“If we fund in Japan, how much investment can we raise?”

Jung Hyun-woo replied with a confident voice.

“We can definitely raise $100 billion.”

The funds currently managed by Victoria Corporation were $150 billion.

If they could raise approximately $30 billion in the United States and $100 billion in Japan, the managed funds could increase to $280 billion.

This was equivalent to the managed funds of the top three funds in the United States. In other words, if the Victoria Fund successfully funded in Japan, it would be able to stand shoulder to shoulder with Magellan Fund or Vanguard Fund.

Jeremy Spin accepted his proposal positively.

“John is in Tokyo, too.”

He meant that there was no need to dispatch a new CEO or COO to Japan for the Victoria Fund’s Japanese funding.

“But we need to increase manpower.”

Jeremy Spin nodded at Jung Hyun-woo’s opinion.

“I agree. With the current manpower, we’ll be too busy just with the withdrawal work.”

This time, Sarah spoke to Jung Hyun-woo.

“If we buy American stocks with the money we raise in Japan, the American government will like it.”

“I think we need to talk to the American government about that.”

“The American government?”

“If there’s no reward for patriotism, won’t it end up as unrequited love?”

Jung Hyun-woo wanted to receive incentives from the American government while promoting this project.

* * *

Summer of 1988.

John Peer officially announced Victoria Fund’s investment in Victoria Corporation.

The investment was announced in John Peer’s name because he was the official CEO of Victoria Fund.

The stock market reacted immediately after John Peer’s announcement.

“Victoria Fund is finally starting to buy Victoria Corporation’s stock.”

“It was strange that they were only buying Apple and Microsoft.”

“Now Victoria Corporation will rebound, too.”

“Of course.”

Victoria Corporation was a leading company in the American IT industry.

It didn’t make sense that a fund investing in the American IT industry wasn’t buying Victoria Corporation stock.

However, there were those who raised objections to this investment by Victoria Fund.

“But is it right for Victoria Fund to buy Victoria Corporation stock?”

“That’s right. It looks like Charlie Jung is buying his company’s stock with his own fund.”

“This could be intentional pumping [artificially inflating the stock price].”

“Is it stock manipulation?”

“You could see it that way.”

The Nasdaq Exchange executives also held a meeting regarding this matter.

After a two-hour meeting, they concluded that there was no problem.

Nevertheless, public opinion did not flow in one direction and remained evenly divided.

Ring, ring, ring.

Jung Hyun-woo reached out and answered the phone as soon as it rang.

“This is Charlie.”

“Charlie, this is Jeremy.”

The person who called Jung Hyun-woo was Jeremy Spin.

“Are you calling because of the market’s reaction?”

Jeremy Spin replied in a dry voice.

“I think it’s half successful.”

Half successful.

It was an answer that he couldn’t be very satisfied with.

Jung Hyun-woo nodded at Jeremy Spin’s report.

“But Victoria Corporation’s stock price has recovered to $50 again.”

Victoria Corporation’s closing price today was $50.11. This meant that Victoria Corporation’s market capitalization had recovered to $100 billion.

Jeremy Spin raised his voice slightly.

“Are you satisfied?”

Jung Hyun-woo replied in a brighter voice.

“How many people can say they are satisfied with our company’s stock price right now? But I am personally satisfied.”

Victoria Corporation’s $100 billion was nothing more than a castle built on sand.

It was a market capitalization of $100 billion that could collapse at any time.

Nevertheless, the reason why Jung Hyun-woo said he was satisfied was because he had reversed the downward trend.

‘Stock is a psychological game.’

If a stock that falls every day rebounds significantly, those who were considering selling their stock were likely to change their direction to holding it.

Jeremy Spin took his words.

“Charlie, I think the same way. But I think we can rest assured only if it goes up to around $55.”

Jung Hyun-woo thought the price of $55 seemed far away.

“I don’t know if we can go up to $55 just by opening the Victoria Fund.”

Jeremy Spin put strength into his voice, unlike usual.

“It will be possible.”

He seemed to be thinking positively about opening the Victoria Fund.

“Jeremy, you’re surprisingly positive.”

John was neutral, but Jeremy Spin was often pessimistic.

‘If the pessimistic Jeremy says it’s possible, it’s safe to say that the chances of success are high.’

Jeremy Spin said with a confident voice.

“Charlie, we are preparing a large-scale marketing campaign to open the Victoria Fund.”

Large-scale marketing.

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

“Victoria Fund prepared the marketing?”

“If we open the fund quietly, who will invest in the Victoria Fund?”

That was right.

It was necessary to tell people not just that the fund was open, but that a fund that would make them money was open.

“Um, I didn’t pay attention to that.”

“Charlie has Victoria Corporation, after all.”

It was a moment when trust in Jeremy Spin grew even more.

‘When John retires, I should leave the company to him.’

Jung Hyun-woo nominated Jeremy Spin as John Peer’s successor. However, Jeremy Spin, like John Peer, had the possibility of early retirement.

“We have signed a contract with a marketing company, so the effect will be good.”

He did not create the marketing strategy himself, but entrusted the work to a marketing company.

Two weeks later.

Victoria Fund announced the opening of the fund following its investment in Victoria Corporation.

And at the same time, billboards were installed on TV, newspapers, and even major league stadiums.

Americans could see the phrase “Victoria Fund Open” anywhere.

Wall Street investors frowned at Victoria Fund’s aggressive operation.

JP Morgan Financial Group Chairman Edmund Norman had the same reaction.

“It seems the management of Victoria Fund has changed.”

JP Morgan Investment Bank President Henri-Arnaud took his words.

“Edmund, the management of Victoria Fund hasn’t exactly changed.”

Edmund Norman tilted his head.

“Even though the management hasn’t changed, the policy has changed so drastically?”

“I think Victoria Corporation sent a signal.”

“Signal?”

“SOS [a distress signal].”

He meant that Victoria Fund had to help because Victoria Corporation, which could be said to be the parent company, was sluggish.

“Hmm, was Victoria Corporation that bad?”

Edmund Norman had checked all of Victoria Corporation’s recent performance and guidance.

“The company itself is performing, but the stock price has been steadily declining.”

“I know that Victoria Corporation’s stock price is declining. But wasn’t it falling to the point where Victoria Fund had to step in like this?”

Edmund Norman saw the recent decline in Victoria Corporation’s stock price as a healthy correction as the bubble burst.

But Jung Hyun-woo, Jeremy Spin, and Sarah didn’t think so.

Henri-Arnaud was in regular contact with Jung Hyun-woo, so he knew the atmosphere of Victoria Corporation to some extent.

“I think Victoria Corporation wanted to keep the number $100 billion.”

Edmund Norman knew people’s psychology well.

“He means that if it becomes $90 billion, they want to match $100 billion, and if it becomes $46 billion, they want to match $50 billion.”

“That’s right. For various reasons, Victoria Corporation’s stock price is likely to rise for the time being.”

JP Morgan held 10% of Victoria Corporation’s stock, so they had no choice but to pay attention to Victoria Corporation’s stock price.

“Then it would be good for us to lend a hand.”

Henri-Arnaud raised his eyebrows at Edmund Norman’s words.

“We’re going to lend a hand?”

Edmund Norman had simply overlooked the short selling of Victoria Corporation in the past.

‘Edmund is helping Victoria Corporation, what wind blew today?’

Edmund Norman answered his question.

“If Victoria Fund is so active, won’t there be at least a rebound?”

Whether it was a technical rebound or an intentional rebound, he meant to make a profit from this rebound.

“If that’s the intention, I understand. I’ll prepare about $1 billion.”

Edmund Norman spread three fingers on his right hand at Henri-Arnaud’s answer.

“Do it with $3 billion.”

Henri-Arnaud raised his eyebrows at his instruction.

“Isn’t that a bit much?”

“Let’s show some sincerity this time.”

“I understand.”

$3 billion was equivalent to 3% of Victoria Corporation’s market capitalization.

‘That would be a pretty big help to Victoria Corporation.’

It was when Henri-Arnaud was about to get up.

“Henri.”

Henri-Arnaud put his butt back on the chair and asked.

“Do you have any questions?”

“How do you see the opening of Victoria Fund?”

Henri-Arnaud answered honestly.

“They are marketing extensively here and there, so I think it will be successful.”

“How much investment can you raise?”

“Charlie Jung also has connections, so I think he can raise about $20 billion.”

Henri-Arnaud asked again.

“Hmm, then what are we going to do?”

“Edmund, do you think we should respond to Victoria Fund’s marketing?”

If Victoria Fund opened, it could emerge as a rival to JP Morgan Investment Bank.

“No, I mean investment.”

Henri-Arnaud couldn’t help but pause at Edmund Norman’s question.

‘Are we investing in Victoria Fund?’

He did not rate Victoria Fund highly because he thought its returns were highly speculative.

But Edmund Norman thought differently.

“Henri, why are you silent?”

When Edmund Norman asked again, Henri-Arnaud told his thoughts.

“Edmund, I don’t think it’s right to invest in Victoria Fund.”

Edmund Norman raised his voice slightly.

“Why?”

Henri-Arnaud replied.

“Their returns are overestimated.”

Edmund Norman put his hands together and rubbed them lightly before asking.

“Are you saying that their returns will be lower than ours? But what if it’s the opposite?”

The opposite.

In other words, how will you take responsibility if Victoria Fund’s returns exceed JP Morgan Fund’s returns?

Edmund Norman’s one word greatly scratched Henri-Arnaud’s pride.

“Edmund, we will never be behind Victoria Fund in terms of returns.”

Edmund Norman realized that Henri-Arnaud’s answer was nailed down.

‘His pride is hurt.’

He nodded and said.

“I understand. Do as you wish.”

Edmund Norman tended to emphasize autonomy rather than interfering in the management of affiliates.

So this time, he didn’t push his thoughts and raised Henri-Arnaud’s hand.

But he had no intention of stopping the Victoria Fund investment like this.

Three minutes later.

A man entered Edmund Norman’s office.

“Did you call me?”

The person who bowed slightly was Henry Cohen, who was called Edmund Norman’s left arm.

“Henry, you came just in time.”

Henry Cohen was the COO of JP Morgan Insurance Group.

“How much money do you manage on your side?”

“It will be about $200 billion.”

The operating funds of large insurance companies were as large as those of banks.

“Just turn 10%.”

10% of $200 billion was $20 billion.

This was a huge sum equivalent to the market capitalization of a multinational corporation.

“Mr. Norman, we can’t withdraw $20 billion right away.”

“Can’t we sell the government bonds we hold?”

“Government bonds?”

“Interest rates are falling, and I think it’s time to withdraw.”

In fact, US interest rates continued to fall.

“If that’s the reason…”

“I think we can withdraw in about a year.”

“A year is possible.”

Henry Cohen accepted Edmund Norman’s instructions as a simple portfolio change.

‘It means the era of high interest rates is passing.’

He raised his voice slightly and asked.

“Are you investing the money from selling bonds in Japan?”

Japanese investment.

As of 1988, investment banks in the United States and other Western countries were caught up in a Japanese investment boom.

“Japan?”

“Isn’t it the most profitable investment destination right now?”

The best investment destination.

The biggest reason why people pessimistically viewed the future of Victoria Fund was this.

Withdrawing from the best investment destination they had preempted.

This alone made Wall Street dealers scratch their heads.

“I don’t think we’ll invest in Japan.”

“Then what company are you investing in?”

Edmund Norman replied in a clear voice.

“I’m going to invest in Victoria Fund.”

At his answer, Henry Cohen was as surprised as if he had seen a ghost.

“A, are you saying you’re investing in Victoria Fund?”

Edmund Norman asked back.

“Is that so strange?”

“Isn’t Victoria Fund a setting sun [declining in power or popularity]?”

“I think a little differently.”

“Yes?”

Edmund Norman revealed the reason for his investment.

“I trust Charlie Jung.”

“Charlie Jung?”

“His investment sense is genius.”

The reason why Edmund Norman was trying to invest in Victoria Fund was not just this.

‘If Victoria Fund succeeds, Victoria Corporation’s stock price will rise, and if Victoria Corporation’s stock price rises, the asset value of our JP Morgan will also increase.’

A domino of success.

He was thinking of Victoria Fund as the beginning.