Breaking Up Is Better Than Divorce

helpless

“Now the market is convinced that Kang Yu-jin has taken over Daeyang Heavy Industries. It is highly likely that it will reach the upper limit by the end of today. However, the purchase volume of SS Partners is still at KRW 24,000, so it is currently in a quiet state. We are not sure what will happen in the future.”

Chief of Staff Oh Kyung-duk explained the situation so far to Chairman Ryu.

“But if acquisitions are really the purpose, the problem is much more serious than you think. If we leave it as it is, Daeyang Heavy Industries could really take over. Right now, we have only 31% of the stake. If you add 7.3% of the national pension, it is 38%.”

As with other large corporations, it is assumed that the amount invested in the National Pension always stands in the position of the owner. In fact, there is nothing wrong with what it was.

Therefore, Korean conglomerates assumed not only their shares, but also their shares in the National Pension Service as friendly shares.

Of course, that is not to say that there is no cost for it. They are paying the price of giving what the government wants and cooperating with the policies of the ruling party.

“The amount that Yoojin Kang bought is less than 10% today, isn’t it too hasty to worry about that?”

The eldest son said he was displeased.

“That is unknown. No one knows how much stake they have secured by other channels. What’s more, considering the status Kang Yoo-jin has on Wall Street, it’s even more so. So we have to move on the assumption that we are doing things after we have already secured enough stakes.”

“Maybe more than 40% have it… … .”

Second, Ryu Geun-il said without confidence.

“Now you have to keep in mind the fact that your opponent has near-infinite capital.”

“Infinite, how much bluff there is.”

“Of course it could be, but it is certain that it has the ability to mobilize at least 100 trillion won in cash.”

“Damn it!”

The eldest son burst into anger once again.

“Ummm…”

“For Kang Yu-jin, spending 1 trillion won to accumulate 20% is not a huge expense, but if Daeyang Heavy Industries falls over, other affiliates may also be at risk.”

That is the biggest problem with circular shareholding. If only one big guy in the middle falls, it will fall one after another.

“So, should we also buy mustard to weep?”

“yes. That’s the safest. When heavy industry goes over, the car is at risk, and when the car goes over, even the boss is at risk.”

The Daeyang Group holds each other’s shares in several circular structures.

Daeyang Heavy Industries holds a stake in Daeyang Motors, Daeyang Motor holds a stake in Daeyang Trading Co.

In another circular shareholding structure, Daeyang Electronics and financial affiliates hold shares in rotation.

“Yeah…you mean he’s going to try it with money right now? Is this me?”

Chairman Ryu said, grinding his teeth with his eyes burning bright enough to be seen as the eyes of an old man over ninety.

“okay. What do you think?”

“It has already gone up quite a bit. If you come and buy now, the loss is not the same.”

The eldest son spoke first.

It’s not actually a damage. However, they thought that if they did not meet the price they wanted, they could not recover the accumulated slush fund loss.

The purpose of this work was to raise income in excess of 1 trillion won. If you step back, the whole plan will collapse.

“It seems that he also has no intention of buying more than 24,000 won, but if we attack first, the stalled stock price will rise sharply. There is not much to sell.”

Ryu Geun-il agreed.

In fact, the biggest problem was that no one knew how far the rising share price would rise even if the Daeyang Group went to buy it.

“But you can’t keep your hands on it. If the heavy industry is taken away from him by accident, the stake in the car owned by the heavy industry is also a problem, but accounting fraud can be revealed.”

The chief of staff again pointed out an important point.

“Yeah, there it was.”

The president and his sons had no choice but to nod their heads.

Daeyang Heavy Industries has not hesitated to do illegal things to hide its considerable losses.

“I don’t know how much it will cost. Even if we join the purchase, it is on an upward trend.”

“I can’t just leave it alone.”

“If this is the case anyway, it will be difficult to buy any more over there.”

“Right. If you jump right up there, you might give up on it.”

“In that case, short selling is a problem. If it goes above the selling price, the margin will run out and you may be liquidated. Not all, but some are dangerous.”

“this! Damn it!”

No one had any idea how to deal with the current situation.

“It’s the upper limit!”

Then, suddenly, the chief of staff shouted.

Even though he was still talking, he didn’t look away from the monitor.

“what?”

the old man asked harshly. Of course, that’s not to say I don’t know.

“already?”

“Oh My God!”

While the three rich men were discussing countermeasures, the uptrend suddenly surged.

The people who watched for a while seemed to not want to miss this opportunity, so you both got on the buyout, and even foreigners who were watching the Daeyang Heavy Industries incident joined the buyout ranks.

“It’s a big deal…”

The first looked at the chief of staff with a bewildered expression.

“Maybe good?”

Ryu Geun-il looked at the monitor set by the chief of staff with an anxious expression.

“You have to make a decision right now.”

The chief of staff looked at the president and said.

“If we continue at this rate, we will not be able to secure enough stock even if we start buying. But Kang Yu-jin is different. He can use it for a few trillions of humor.”

The market cap of Daeyang Heavy Industries, which was 2.8 trillion won after dropping to the lower limit the day before, was already exceeding 3.6 trillion won. Everyone knew how catastrophic it would be if this happened again in just a few days.

“It would be better. No matter how much he is, he will never be able to buy as many stocks as he wants if this uptrend continues.”

After thinking for a moment, Ryu Geun-il said.

“It is. Selling is completely missing, how do you secure stock?”

“The biggest problem is that we don’t know how much of an unknown stake in Kang Yu-jin.”

In the current situation, the coolest person was Chief Secretary Oh Kyung-duk, who could be seen from a distance.

“Ummm…”

As the situation was so urgent, Ryu Geun-il, who had not been able to think about it, spit out a moan.

* * *

“Now what?”

In New York, where it was still early in the morning with a time difference of 13 hours, Joanna and Eugene stayed up all night watching the local situation.

Unlike the home of the president of the Daeyang Group, where disaster seemed to have fallen, they sat comfortably on their backs in armchairs, holding drinks in their hands, eating snacks, and enjoying this time as if watching a baseball game.

“I think the stock price will keep going up. It would be really fun to hit the upper limit a couple more times here.”

In that case, it would be well over $60,000.

“Is short selling a problem over there? If we go on like this, we are sure to incur huge losses.”

Joanna said as she drank sugar-free Coke.

“Short selling is not a big deal. It’s okay to wait until you fall again at any time.”

“When? Are you saying that Korea doesn’t have to repay at maturity?”

Joanna now knows quite a bit about Korea, but she doesn’t know every detail.

“Unlike the United States, you can extend the repayment indefinitely as long as the lender does not request a return. So, you can short sell and wait for the stock price to fall anytime the stock goes up. It’s enough to just pay the interest. But the bigger problem is that we seldom get returns.”

“uh? Then there is no risk of short selling, right?”

In the case of the United States, when borrowing stocks for short sale, the redemption period must be set, and it must be returned within the contracted period.

“uh. No danger, no punishment.”

In the case of the United States, non-borrowing short sellers or non-payment of short sales are punishable by a fine of not more than $5 million or imprisonment of not more than 20 years.

However, in Korea, it usually ends with a fine for negligence.

“Then it’s like pushing you to short sell.”

Joanna gave her a puzzled look.

“Actually, there is no such thing. So I rarely lose money from short selling. But again, those rules only apply to institutions and foreigners. For individual investors, another rule of 60 days is applied.”

Even then, it has to go through complicated procedures such as signing a credit agreement and registering a loan sale.

“what? that is? So, you are saying that only foreigners and institutions should make money by short selling?”

“They say it’s to protect individual investors, but it’s not convincing.”

Moreover, the short selling disclosure system, which provides information on short selling, was first implemented this month. Until then, individuals did not even know who was short selling how much.

“I am. Does that mean that even if the stock price rises like that, it is enough to just hold on?”

Joanna said while looking at the stock price of Daeyang Heavy Industries floating on the big monitor.

In Korea, there is no such thing as the Game Stop incident that will happen in the next few years.

In the Game Stop incident, some hedge funds that bet on short selling suffered astronomical losses and went bankrupt. This is because of a vicious cycle that causes the stock price to rise further.

Moreover, in such a situation, the interest of the large stockholders rose to a whopping 80%, further pressing the short selling forces.

But, as Joanna said, in Korea, it’s enough to hold on.

Of course, if you don’t pay the margin that increases as the stock price goes up, it’s the same as being liquidated as a counter trade, but if you want to pay the margin, you can survive.

Even the institution that lent the stock does not insist on collecting the stock saying that it is enough to pay only a commission.

“And most of the places that lent stocks are probably Daeyang Securities or other group affiliates. Maybe they are short selling without borrowings using the Daeyang Securities side.”

Although short selling without borrowings is an illegal act, it is fully possible through the securities company’s system.

“This is unimaginable in America. Something that deserves jail time for a felony is happening casually.”

“In case of emergency, there is also the National Pension Service.”

The fact that the National Pension Service lends its stocks to short sellers has been criticized several times.

However, the National Pension Service has been contributing to lowering the stock price by lending the stock it owns because the commission income is still not small.

It will be a few years before the National Pension Service stops doing that.

Moreover, if there is a battle for equity between Eugene and the Daeyang Group, he will not hesitate to take Daeyang’s side.

“But it won’t be easy this time around.”

Of course, Eugene was very relaxed because he assumed all those variables.

* * *

The Daeyang Heavy Industries incident continued the next day. No one wanted to sell the stock they were holding, and more and more people were willing to buy it.

Those who had been envious of Kang Yoo-jin’s investment success in the meantime, thought that they would be able to see a part in this opportunity, and did not hesitate to step in.

It was as if he was thinking of this opportunity as an opportunity to share the great fortune that Yoojin Kang has.

In the end, even after announcing a record-breaking deficit, there was a strange phenomenon that, from the next day, rather than setting the upper limit every day.

The procession of the upper limit continued the next day and the next day.

A week later, the stock price of Daeyang Heavy Industries rose 270% from before the crisis began.

Of course, the trading volume has almost disappeared during that time. Occasionally, the quantity put out to make a profit quickly disappeared.

Everyone thought the situation was not over yet.

Above all, as the world’s richest man, Kang Yu-jin, intervened, he was expecting a very big thing to happen.

Now, the Daeyang Group has reached a point where it cannot be touched.