Golden Spoon Investment Portfolio - Chapter 346

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

346. I will secure management control.

Quantum Fund Headquarters on 7th Avenue, Manhattan, New York.
George Hamilton and Rodney, the Chief Investment Officer, sat facing each other on a spacious sofa in an office with a view of Wall Street’s towering skyscrapers stretching out beyond the windows.

“…The Southeast Asian currency crisis is being manipulated by a wealthy few who don’t want Southeast Asia’s economic development and by Western media. The typical force behind this crisis is the hedge funds led by the Quantum Fund, and the wealth they enjoy is obtained by plundering others and impoverishing them. George Hamilton and the hedge funds are stealing what Southeast Asian nations have painstakingly built. Rani….”

George Hamilton spoke as he placed the Wall Street Journal, which carried remarks from Malaysian Prime Minister Syed Arif delivered at the IMF annual general meeting held in Hong Kong, onto the table with a thud.

“He’s certainly pouring out criticism as if it were planned.”

Rodney, dressed in a navy pinstriped suit, shrugged his shoulders while remaining seated on the sofa.

“With the ringgit’s collapse this time, all the large-scale construction projects that Prime Minister Syed was ambitiously pursuing—the Petronas Twin Towers, the world’s tallest skyscraper, large hydroelectric power plants, and so on—have all been postponed or halted. Wouldn’t he be furious?”

The Petronas Twin Towers, at 451.9 meters tall with 88 floors above ground, were twin buildings symbolizing Malaysia’s economic growth and were set to surpass the 442.1-meter Sears Tower in the United States to become the world’s tallest skyscraper upon completion.

“The one making the biggest profits from this currency crisis isn’t us—it’s the Eldorado Fund. That’s why he’s biting at us.”

George Hamilton spoke with slight irritation.

“When people think of hedge funds, you’re the first legend of Wall Street that comes to mind. That must be why.”

Rodney, sensing the mood, tactfully appeased him.
George Hamilton then leaned back against the chair and snorted dismissively.

“What good does it do? We’re raking in money elsewhere while serving as the scapegoat.”
“Once we bring down Hong Kong this time, we’ll push past Eldorado and take the lead.”
“That’s how it should be, of course.”

I could see the deeply displeased expression on his face—he was clearly furious about repeatedly falling behind the Eldorado Fund in Thailand, the Philippines, and Indonesia.
George Hamilton, brimming with pride as the godfather of hedge funds and convinced of his own supremacy, found his self-esteem wounded by appearing to lose ground to Seok-won, something he simply could not accept.
Perhaps for this reason, unlike his previous approach of delegating fund management to Rodney and stepping back to focus on running his charitable foundation, he had been personally taking the lead in trading operations since the Indonesia campaign.
The problem was that this was creating friction, both large and small, with Rodney, who had been called his successor, and their relationship was gradually becoming strained.
To capture Hong Kong, he had repurchased the ringgit to realize profits and withdraw from Malaysia—a move Rodney had strongly opposed as premature.
But ultimately, George Hamilton’s stubbornness prevailed, and Rodney had liquidated the position.
While the results had been reasonably profitable, Rodney still believed the ringgit hadn’t hit bottom, so a lingering sense of regret remained with him.
However, since George Hamilton was the fund’s owner and his influence and shadow still loomed large, there was nothing to be done about it.
As Rodney inwardly smacked his lips and harbored slight doubts about his own role and position, George Hamilton asked a question.

“What’s the movement among the other funds?”

Rodney cleared his brief thoughts and answered.

“Some have followed us and liquidated their positions, but a considerable number are still maintaining their shorts.”

At this, George Hamilton furrowed his brow, his expression turning sour.

“That’s probably because the Eldorado Fund is still in the game.”
“…That’s likely the case.”

Upon hearing the response, George Hamilton clicked his tongue in displeasure.

“Tsk.”

The fact that the most money-sensitive hedge funds were watching the Eldorado Fund—or rather, Seok-won—instead of him was laid bare, and it put him in a foul mood.
The more this happened, the stronger his desire grew to bring Hong Kong, a different weight class from the other Southeast Asian nations he had already toppled, to its knees and clearly demonstrate that Seok-won was not yet his equal.
George Hamilton drummed his fingertips on the armrest of the sofa where he sat, pondering briefly before lifting his head to look at Rodney.

“The Indonesian rupiah has fallen to 4.3 per dollar.”
“That’s correct. To stabilize the exchange rate, the Bank of Indonesia has more than doubled the three-month short-term interest rate from 11% to 28%, and has instructed corporations not to sell rupiah, but the effect appears limited.”

George Hamilton replied with an indifferent expression.

“When a ship is about to sink, telling people to stay put won’t make them listen.”
“That’s true.”

George Hamilton narrowed his eyes as if thinking, then spoke again.

“So we’ve made roughly a 53% profit so far.”
“Yes, sir.”
“Then let’s liquidate our rupiah position around here.”

Rodney’s eyes widened in surprise as he spoke up.

“But there’s still more downside potential. Isn’t it too early to exit now?”

George Hamilton shook his head at Rodney’s objection.

“The Indonesian government won’t have the capacity to hold out much longer. They’ll have no choice but to turn to the International Monetary Fund soon enough.”

“….”
“Once that happens, the collapsed rupiah will rebound. We should exit before that occurs.”

But Rodney, who disagreed, leaned forward and spoke.

“Of course, as you say, Indonesia will ultimately have no choice but to seek International Monetary Fund assistance. However, given the Indonesian government’s current hardline stance, I believe there’s still more profit to be extracted.”

Though Rodney made his case, George Hamilton refused to listen further and held firm to his decision.

“This isn’t just my judgment. And to bring down a formidable opponent like Hong Kong, we can’t scatter our forces—we need to concentrate them.”

The real intention was to close out positions in Indonesia quickly, following Malaysia, so that all firepower could be directed at Hong Kong.
Rodney, who had wanted to persuade him once more despite thinking it was premature, saw George Hamilton’s stubborn expression and decided to abandon his attempt.
He realized that further argument would fall on deaf ears.
Though doubt weighed heavily on him, Rodney suppressed his true feelings and reluctantly acquiesced.

“…If that is your decision, I understand.”

***

[The Bank of Japan announced that it has decided to cooperate with the Bank of Indonesia and the Monetary Authority of Singapore in Tokyo and Singapore foreign exchange markets, selling large quantities of dollars and purchasing rupiah to prevent the Indonesian rupiah from falling. The purchase amount is estimated at 100 to 300 million dollars…. As the currency collapse across Southeast Asian nations that began at the start of the year continues to spread, this intervention by the Bank of Japan appears to be intended to expand Japan’s dominance and influence in Asian currency markets. Meanwhile….]

Seok-won had just stepped out of the shower, his athletic frame wrapped in a robe as he opened the refrigerator door.
He retrieved a perfectly round ice cube from the ice tray, placed it in a rocks glass he’d prepared beforehand, poured whisky halfway up the glass, and took a sip—the refined taste lingered on his tongue.
Seok-won held the rocks glass in one hand and walked toward the living room, his eyes fixed on the television screen.
A large, state-of-the-art PDP television occupying one wall of the room displayed an American satellite broadcast.
On the screen, a middle-aged Indonesian central bank governor, responding to a reporter’s question, declared in a forceful tone that he would defend the rupiah at all costs.

“You don’t actually believe that merely having an additional three hundred million dollars in hand will allow you to fend off the hedge funds’ assault, do you?”

Seok-won settled onto the sofa, muttering with a listless expression.
Not only were the hedge funds and foreign investors draining the rupiah, but as its value plummeted, Indonesian domestic corporations were also desperately selling rupiah and scrambling to secure dollars—an amount that would be difficult to sustain for more than four days at most.

“With foreign reserves nearly depleted by now, it won’t be long before Indonesia abandons its defense of the rupiah and requests assistance from the International Monetary Fund.”

If the damage were severe but the exchange rate stabilized as a result, it would be fortunate; however, the problem was that Indonesia’s government would walk away from the negotiating table in the face of the International Monetary Fund’s excessively harsh demands.

“Not only Korea, but many Southeast Asian nations devastated by the financial crisis had to endure considerable hardship at the hands of the International Monetary Fund.”

Moreover, President Suharto’s health concerns during his thirty-two years of prolonged rule were themselves a ticking time bomb that would plunge Indonesia into chaos.

“If my memory serves me correctly, ultimately the exchange rate exceeded ten rupiah per dollar, and only when the economy teetered on the brink of collapse did Indonesia finally succumb to the International Monetary Fund’s pressure.”

That meant there was still considerable profit to be made from the Indonesian rupiah.

Seok-won brought an Underberg glass to his lips and murmured.

“Regardless, it’s about time we start hearing news of major domestic corporations’ bankruptcies again—companies that have been quiet for a while now.”

The mere thought of it made my chest tighten.
As if to shake off that feeling, Seok-won continued sipping his whiskey when the ringtone of his mobile phone reached his ears.

“Hello.”
[Boss, it’s me.]
“I was just waiting for your call. How did things go with Qualcomm?”
[I doubled the offer, but they flatly refused, insisting they will never sell the CDMA fundamental patents.]
“That’s unfortunate.”

As he smacked his lips in disappointment, Landon Shore spoke apologetically.

[I apologize.]

With mobile phone adoption exploding, Seok-won had proposed to Qualcomm a substantial sum in exchange for the CDMA patents—technology that would soon become a golden goose laying precious eggs.
However, Qualcomm, having developed the CDMA technology itself, understood its value better than anyone and clung to the patents with no intention of relinquishing them.

“Then there’s no choice. If you won’t sell the patent, I’ll have to buy the entire company.”
[You’re planning a hostile takeover?]
“That’s right. What’s Qualcomm’s current market capitalization?”
[It’s risen considerably lately—around 7.3 billion dollars.]

Considering that Qualcomm generated over ten billion dollars in annual revenue from CDMA licensing fees and modem chip sales, and was poised for explosive growth as a semiconductor company, the valuation seemed like a bargain.

“Use the profits that came in from the Japan branch recently to accumulate as much stock as possible.”
[You mean to spend all four billion dollars?]

Landon Shore’s voice carried a note of surprise.

“Yes. Secure a majority stake and ensure we have firm control of management.”

Since Seok-won typically showed little interest in management rights despite acquiring shares, Landon Shore asked cautiously, sensing something unusual.

[Is the company worth such a substantial investment to acquire?]
“Of course.”

Seok-won answered without hesitation.
Though he offered no further explanation, Landon Shore seemed satisfied with that alone and simply nodded without pressing further.

[Understood. I’ll proceed with accumulating Qualcomm shares as instructed.]
“Ah, and conduct the stock acquisition through Frey, not the Eldorado Fund.”

Frey, named after the Norse god of prosperity, sunlight, and rain, was the name of Seok-won’s personal holding company established in the Cayman Islands.

[I’ll do that.]

After exchanging a few more words, Seok-won ended the call.
Setting the folded phone back on the table, Seok-won picked up his glass of whisky neat and spoke.

“I wouldn’t normally go this far, but since Qualcomm was the first to break faith and stab us in the back, they have no grounds for complaint.”

In reality, despite possessing the original CDMA technology, Qualcomm lacked the capability to commercialize it and had been on the brink of bankruptcy just years earlier.
Then, catching the attention of Korea, which was pursuing mobile communication technology development, they received 16.95 million dollars—approximately 12 billion won in Korean currency—in development funding and successfully commercialized CDMA in collaboration with the Electronics and Telecommunications Research Institute (ETRI).

“Without Korea, Qualcomm’s future would never have existed, and the CDMA technology itself would have been shelved and lost to history.”

Despite this, as CDMA became established as the technical standard and mobile phone usage exploded, Qualcomm reaped enormous profits by collecting 5% royalties per handset from domestic manufacturers.

“Even if we acknowledge that the royalty contract was poorly negotiated due to lack of foresight, what’s truly infuriating is that Qualcomm enjoyed tremendous benefits from Korea while charging higher royalties than they did to other nations.”

It was a situation where Korea provided all the ingenuity while Qualcomm pocketed all the profits from behind the scenes.
Before the regression, I had to swallow my anger and endure Qualcomm’s abuse of power because of their patents, but this time Seok-won had no intention of allowing such circumstances to unfold.

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