Golden Spoon Investment Portfolio - Chapter 21

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This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
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21. My fingers are already itching for action.

The air in the room grew hot with the unexpected megadeal of AT&T and NCR’s M&A.
After Landon accepted Seok-won’s proposal to join the Eldorado Fund, the first thing he did was study the stock market.
Just as the saying goes, “you can’t manage what you don’t understand,” it was only natural that he needed to grasp the fundamentals of the fund before taking charge.
Thanks to this preparation, Landon immediately grasped what the M&A meant, and with his face flushed with excitement, he rubbed his hands together as he spoke.

“If things proceed as expected, NCR’s stock price will skyrocket.”

Seok-won flashed a white smile and nodded his head.

“Considering that AT&T, the buyer, is quite aggressive in this transaction, the acquisition premium will be very substantial.”

An acquisition premium meant the buyer would pay more than the market price to seal the deal.
Andrew pushed his glasses up with his finger and asked in a serious tone.

“How much of an acquisition premium do you anticipate?”
“Since NCR’s current stock price hovers around fifty dollars, we should be able to secure at least a hundred dollars per share.”
“Double… If it goes as you say, this will be Wall Street’s biggest megadeal of the year.”

Landon, eager to move, shifted in his seat and interjected.

“Then we need to purchase as much stock as possible before word spreads.”

Unlike Korea, where M&A often concludes by acquiring only the controlling stake necessary for management rights, the United States required purchasing one hundred percent of all shares held by minority shareholders at the same price.
In other words, if they bought stock at fifty dollars per share and the acquisition was confirmed at a hundred dollars as expected, they would pocket the entire difference as profit.
It was literally a chance to double their money while sitting idle, so Landon’s impatience was understandable.
Unlike the eager Landon, the experienced Andrew maintained his composure and displayed a cautious demeanor.

“It’s certainly an attractive opportunity, but that’s precisely why we need to examine the situation more carefully.”
“Are you worried the deal might fall through?”

Andrew nodded at Seok-won’s question.

“Exactly. If we accumulate shares only to have the M&A collapse, all our efforts would be for nothing.”

Seok-won readily acknowledged the risk in Andrew’s words.

“If it ended at that level, we’d be fortunate, but there’s a real risk that disappointed selling could flood the market and drive the stock price even lower than its original level.”

Landon, belatedly recognizing the risk, let out a low whistle and his expression hardened.

“Hmm. That would be quite a disaster. Especially if we’ve leveraged our investment heavily.”

With that, he turned his head to look at Seok-won and asked.

“You’re planning to use significant leverage again this time, aren’t you?”
“To maximize returns, of course I have to. I’ve already arranged verbally with Salomon Brothers to secure up to one billion dollars in leverage.”
“As expected, that’s what I thought you’d do.”

Having witnessed my bold negotiations with major Wall Street investment banks during the pound sterling short bet last time, applying a tenfold leverage without hesitation, Landon accepted it without particular surprise.
Meanwhile, Andrew’s eyes lit up as he spoke.

“The fact that you’ve already secured the leverage for investment suggests you believe there’s a high probability this M&A will go through.”
“That’s right.”

Seok-won spoke calmly in response to the curious gaze seeking the basis for my confidence.

“Everyone knows that the biggest reason M&A deals fall through is antitrust law.”

Landon, who knew law well, nodded gravely.

“That’s certainly the case.”

Antitrust law was designed to prohibit or penalize acquisitions or mergers that would give a specific company a monopolistic position in its field, thereby disadvantaging consumers.

“Considering that AT&T is one of the most prominent examples of companies targeted by antitrust law, no matter how eager the acquirer is, if problems emerge, they’ll likely back out.”

The classic example of antitrust law in action was indeed the forced breakup of AT&T.
AT&T, which originated from the Bell Telephone Company, had grown into a massive behemoth that completely dominated the American telecommunications market through indiscriminate acquisitions and expansion.
But when it was sued under antitrust law, it fought a seven-year legal battle, ultimately lost, and was forced to endure the painful separation of its local telephone operations into twenty-two regional divisions.

“Having suffered that blow once, they’ll definitely be wary of getting entangled with antitrust law again.”

Landon also nodded in agreement with Andrew’s assessment, his expression turning serious.

“They won’t want to be reminded of the scarlet letter of being a monopoly again, so I think they’ll feel the same way.”

When Park Seok-won spoke in such terms, Landon’s brow furrowed.

“Then wouldn’t the risk burden be far too great?”

Faced with Landon’s anxious gaze, he leaned back against the sofa armrest and responded with an air of ease.

“Only if antitrust becomes an issue.”
“…?”
“What did I say was AT&T’s reason for taking interest in acquiring NCR in the first place?”
“Well, to enter the promising computer industry… Ah!”

Landon, who had been answering offhandedly, suddenly grasped the implication and let out an exclamation.

“Antitrust law prevents the harms that arise when a specific company’s dominance grows in a single sector. It doesn’t restrict entry into new business fields.”
“Precisely.”

Watching Landon nod in understanding, he broke into a broad smile.

“In other words, this transaction has absolutely nothing to do with antitrust law.”
“Indeed….”

Andrew found the logic flawless and could offer no real counterargument.
Observing Park Seok-won—who, despite his youth, carried himself like a seasoned veteran worn smooth by decades on Wall Street—Andrew felt genuine admiration and spoke accordingly.

“As you say, computer manufacturing isn’t AT&T’s business domain, and while NCR is certainly a notable player, being only fourth in the industry means there’s no reason for antitrust concerns to apply.”

Landon regarded him with eyes full of respect.

“I should have raised these points first, given my legal background. I’m quite embarrassed.”
“It’s fine. More importantly, doesn’t this explanation make clear why I’m confident this M&A will succeed?”

Andrew nodded immediately in agreement.

“Of course. Once the funds arrive, I’ll begin stock accumulation at once.”
“If you sweep up all the shares at once, the stock price will spike dramatically and others might catch wind of it, so manage it carefully.”

At that, Andrew grinned broadly behind his glasses.

“That’s precisely what I do best, so rest assured and leave it to me.”

Seeing the confidence in his expression, I felt there was no need to worry.

“Excellent. The funds will be deposited into the Eldorado Fund account tomorrow.”

Both men’s chests swelled with anticipation at finally beginning real work.

“I can already feel my fingers itching to get started.”

As Andrew’s lips curled into a slight smirk, Landon nodded with a flushed face. After continuing their in-depth conversation for some time, Landon and Andrew left the executive office.
Left alone, Seok-won rose and walked toward the expansive window that occupied an entire wall.
The broad East River flowed serenely below, and a ferry happened to be arriving at the Ferry Terminal, disembarking its passengers.
Gazing down at the scene, Seok-won recalled a past encounter with Manager Oh.
Looking down at that figure, Seokwon recalled an incident from the past with Manager Oh.

“You’re back again?”
“Tsk, tsk. Is that how you speak to a valued customer? Are you part of Generation X or something? Even our new hires at the company talk back like that—there’s nothing cute about it.”
“Enough. Just give me the shoes.”
“Here you go.”
“Here you go.”

Then I cleaned the sole thoroughly with sandpaper, applied adhesive, and attached new protective heels.
Manager Oh, sitting comfortably as if in his own home with slippers on his feet, watched and let out a small sound of surprise.
Manager Oh, who had been sitting comfortably as if he were at home, wiggling his feet in slippers, let out an “oh” when he saw that.

“The protective heels from last time had worn down quite a bit, so I’m doing this as a service.”
“The auxiliary heels you had added last time have worn down quite a bit, so we’re doing this as a service for you.”

Manager Oh couldn’t help but notice my special care and let a faint smile cross his lips.
Manager Oh, who couldn’t help but notice that Seokwon was paying him special attention, let a slight smile play at the corners of his mouth.

“….”
“Thank you.”
Thank you.

Feeling oddly embarrassed by the quietly offered thanks, Seokwon turned his head away and spoke dismissively, as if it were nothing.

“That’s fine.”
“Okay.”

Manager Oh glanced at his wristwatch and nodded.

“Well then, shall I continue with that story we left off last time?”
“Sounds good.”

Seok-won, who had been curious about the rest of the story, brightened visibly.
Manager Oh habitually withdrew a cigarette pack from his jacket pocket, extracted one, placed it between his lips, and paused for a moment to gather his thoughts.

“I mentioned before that mergers and acquisitions have more failures than successes, didn’t I?”
“Yes.”

Manager Oh flicked his lighter and lit the cigarette, then continued.

“One of the worst M&A cases on record is AT&T’s acquisition of NCR, which I mentioned last time.”

Seok-won tilted his head in confusion and asked.

“Didn’t you say it was one of the biggest deals of that year?”
“That’s right. It was a megadeal worth over 7.4 billion dollars in acquisition price alone.”

Manager Oh exhaled a plume of white smoke and continued.

“Even now, it’s an astronomical sum—you can imagine what it meant ten years ago. I don’t need to spell it out for you.”

Seven point four billion dollars.
What would it feel like to move such vast sums of money?
Seok-won tilted his head to the side, a faint sense of longing stirring in his chest.

“But why do they call it a failed M&A?”
“AT&T bet that enormous sum to acquire NCR because they wanted to break away from their traditional telecommunications business and enter the computer industry, which was the hot sector back then—remember?”
“Yes.”
“But contrary to expectations, once the acquisition was complete, there was virtually no synergy. Instead, it became a headache, posting losses exceeding 2.4 billion dollars over several years.”
“Oh… I see.”
“They tried everything to salvage it, but when nothing worked, they simply cut their losses, spun off NCR, and completely exited the computer business.”
“With losses of billions of dollars from the NCR acquisition, it certainly deserves to be called one of the worst M&As.”

Manager Oh, seeing that Seok-won understood, asked with a slightly mischievous expression.

“That’s true, but there’s another reason why it’s considered the worst M&A. Do you know what it is?”
“I’m not sure. What is it?”
“Tsk. When someone asks you a question, at least pretend to think about it.”
“But you’re going to tell me anyway, so why drag it out….”
“Ugh, you’re no fun at all.”

Manager Oh inhaled deeply on his cigarette and revealed the answer.

“1995, when AT&T divested NCR, was precisely when the dot-com bubble was just beginning to emerge. And what business was NCR in, again?”
“Oh… Ah! The computer business!”

Seok-won exclaimed as if he understood.

“Exactly. If they’d just held on a bit longer, they would have reaped the full benefits of the internet and computer industries booming during the dot-com bubble. But they threw away money and missed the opportunity right before their eyes—a truly painful loss for AT&T.”

The dot-com bubble was a time when the stock market was gripped by extraordinary madness and speculation, to the point that stock prices would skyrocket just by adding “.com” to a company name.
Seok-won couldn’t hide his astonishment, his mouth falling open.

“The dot-com bubble was triggered by the popularization of computers and the internet. That means AT&T’s vision when they acquired NCR was actually spot-on. Wow!”

Seok-won shuddered and rubbed both his arms.

“Insane. I’m getting goosebumps, seriously.”
“That’s why life is all about timing.”

Manager Oh leaned back in his chair with a self-satisfied air.

“What good is accurate prediction if you fail by the narrowest of margins and get branded as the worst M&A? So being ahead of the curve isn’t always good—when you make a choice, you need to think it through multiple times and act with caution. Don’t forget this, and remember it well.”
“Yes, sir.”

When Seok-won opened his eyes, returning from the memory of the past, the magnificent vista of the East River came back into view.

“That advice I heard back then ended up helping me a lot when I got into stock investing later.”

The incident of AT&T acquiring NCR had been deeply etched into his mind.

“But when I saw in the Wall Street Journal that NCR was still listed on the stock market, I was shocked beyond words.”

A stock that should have been delisted after merging with AT&T a year ago still remained on the market—hardly surprising given the circumstances.

“This might be another butterfly effect from my return to the past.”

Regardless, Park Seok-won, who retained vivid memories of his previous life, immediately recognized this as another opportunity granted to him.
He promptly hired a private investigator to shadow the executives of both companies and monitor their movements, which yielded photographs of Robert Meyer, the AT&T chairman, and Hilsch, the NCR chairman, meeting in secret.

“Only a fool would see gold lying on the ground and refuse to pick it up.”

Moreover, it was the perfect investment opportunity to establish Eldorado Fund’s presence alongside its Wall Street debut.

“This investment will let me gauge Andrew’s true capabilities.”

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This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
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