Golden Spoon Investment Portfolio - Chapter 360

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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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360. Send this to the boss right away by fax.

A few days later.
Seok-won, accompanied by his Attendant Secretary Han Ji-sung, was touring an electronics manufacturing plant in the Incheon Bupyeong Industrial Complex under the guidance of Ahn Byung-seok, the president of Digital Wave.

“This is the factory where we’ve signed an OEM production contract with New Wave.”

Seok-won spoke as he surveyed the interior of the factory, where the sound of machinery hummed loudly.

“The scale is quite larger than I expected.”
“To stably produce such a large volume—300,000 units—we needed a facility with proper equipment. Even though the unit cost is somewhat higher, we chose this factory for that reason.”
“This won’t be a one-time deal; we’ll continue sales going forward. For that, product quality is crucial, so you made the right choice.”

A thought suddenly occurred to Seok-won, and he asked Ahn Byung-seok.

“By the way, I heard that Sasung Electronics agreed to supply 64-megabyte memory at a significantly lower price than before.”

President Ahn Byung-seok, receiving the gaze, smiled with the corners of his eyes slightly raised.

“Sasung Electronics originally demanded $55 per unit, but I negotiated the supply contract down to $38.”
“You reduced the supply price by over 30%, yet Sasung Electronics accepted it willingly?”

President Ahn Byung-seok responded with a triumphant expression.

“Of course not initially. They insisted they absolutely couldn’t reduce the price, but when I mentioned the volume was 300,000 units, only then did they say they’d reconsider.”

Regardless of where you were, bulk purchases always made negotiation possible.

“After that tug-of-war, I managed to bring it down to $45 per unit. But then, just as we were about to sign the contract, Japanese memory manufacturers including NEC drastically reduced DRAM prices, and as a result, the unit price of the flash memory we were trying to purchase also fell accordingly.”

At this point, before the Japanese semiconductor industry completely collapsed, it was fiercely engaged in a cutthroat competition with Korean and Taiwanese semiconductor manufacturers—the latecomers—by competitively lowering production costs.
President Ahn Byung-seok spoke proudly with an elated expression.

“So I immediately suspended the contract and renegotiated, ultimately contracting to receive flash memory at $38 per unit—that’s 33,934 won in Korean currency.”

Since the result exceeded expectations, Seok-won nodded with a smile.

“That’s impressive.”
“Normally, we would have had to accept whatever terms Sasung Electronics offered. But thanks to you increasing production volumes significantly and advancing 1 billion won in cash, we were able to negotiate without backing down.”

It was actually exhilarating to stand firm against Sasung Electronics rather than capitulate.
Then Ahn Byung-seok smacked his lips thoughtfully.

“The only regret is that the exchange rate climbed from 880 won to 893 won during negotiations, preventing us from lowering the unit price further.”

Seok-won shrugged as he spoke.

“That’s unavoidable. More importantly, you made sure the contract specifies payment in Korean won, not dollars, correct?”
“Of course. Exactly as you instructed multiple times—we’re receiving 300,000 units at a fixed price of 33,934 won.”
“Well done.”

From here on, the exchange rate would skyrocket, and if we’d based payment on dollars instead of won, all the effort to reduce the unit price would have been pointless.

‘In fact, we might have ended up paying significantly more.’

But by receiving payment in won, we could capture foreign exchange gains twice—once when receiving export proceeds and again when paying the supply bill.

“In any case, thanks to flash memory prices dropping sharply, we’ve managed to bring production costs down to 170,000 won—far below our initial projections.”

Compared to the roughly 300,000 won we’d originally anticipated, we’d cut the price by nearly half.
Seok-won spoke with quiet satisfaction.

“This means we now have not only revolutionary features compared to existing Walkman models, but also competitive pricing. Excellent work.”

Ahn Byung-seok, equally encouraged, redirected the credit.

“This is all thanks to you for increasing the production volume so substantially.”
“Not at all. This is the result of your efforts and those of the Digital Wave team working tirelessly to reduce unit costs by any means necessary.”
“President….”

Ahn Byung-seok looked at him with deep emotion.
Seok-won, slightly embarrassed by the admiration in his gaze, cleared his throat softly and naturally shifted the conversation.

“By the way, I heard we’ve contracted to supply 300,000 MP3 players to Best Buy, the major American electronics retailer?”

Ahn Byung-seok nodded with an excited expression.

“Yes. When I heard the news yesterday, I couldn’t begin to express my shock and joy. Getting our products into Best Buy, which is notoriously difficult even for American companies to supply to, still feels like a dream.”

Yoon Nam-ho, the Manager beside me, wore the same expression.
Best Buy was indeed a place where even Sasung Electronics, TG, and Daekwang Electronics—among Korea’s leading electronics companies—found it difficult to secure shelf space.
Of course, none of this would have been possible without the influence of Seok-won, a titan of Wall Street, and the Eldorado Fund backing the deal.
Yet Seok-won spoke without revealing any of this.

“I imagine you’ve heard that they paid a 20% advance upon contract signing.”
“Yes.”

While the standard advance was 10%, this too was a gesture of goodwill from Best Buy toward Seok-won.

“As noted in the contract copy I sent, we’re delivering MP3 players to Best Buy at $224 per unit.”

President Ahn Byung-seok had shown me every page of the contract with Best Buy without reservation, explaining each detail beforehand and securing my approval in advance, which only deepened his trust in Seok-won.

“After deducting shipping and other costs, the margin per unit is $22. So the advance payment yields $6.6 million in profit, and since we’re splitting the profits evenly, Digital Wave’s share comes to $3.3 million.”

Seok-won turned to Han Ji-sung and asked.

“What’s today’s exchange rate?”
“893.7 won.”
“Roughly at 893 won, that comes to about 2.9469 billion won.”

Then, turning his gaze back to President Ahn Byung-seok, Seok-won continued.

“Would you prefer I convert it to won for convenience, or should I deposit it in dollars since the exchange rate has been climbing lately?”
“I’m sorry?”

President Ahn Byung-seok’s eyes widened.

“You mean you’re settling the profits separately, not deducting them from the 10 billion you advanced earlier?”
“Of course I’ll deduct the advance from it eventually, but this is your first delivery. I wouldn’t want you to feel empty-handed. So I’m planning to divide the advance payment according to the agreed ratio.”

Seok-won smiled gently at President Ahn Byung-seok, who stood with his mouth agape in astonishment.

“Besides, you’ll need capital to keep production running smoothly going forward.”
“President! Thank you so much!”

Ahn Byung-seok, who never expected such consideration, was deeply moved and bowed his head repeatedly.
Manager Yoon Nam-ho, despite appearing to be around the same age, found Seok-won truly remarkable and admirable—a third-generation chaebol heir who carried not a trace of arrogance.

“Actually, I was planning to use the letter of credit that Best Buy sent us to secure a loan from the bank, but if you’re settling 2.9 billion won, that won’t be necessary.”

Ahn Byung-seok, whose face brightened despite the burden he’d been carrying, spoke with newfound relief.

“Perfect timing then. I’ll have our Finance Department process the deposit for tomorrow.”
“Yes. Thank you so much.”

As Seok-won walked ahead, he suddenly remembered something and added a thought.

“Oh, and since the delivery volume exceeded our expectations, we’ll need to send all 300,000 units to Best Buy. We’ll need to produce an additional 50,000 units for domestic sales.”
“Production isn’t the problem—it’s sales. We can manufacture as much as needed, so leave it to us.”
“But you understand the issue if we rush production and quality control suffers.”
“I’ll personally go to the Manufacturing Plant instead of the office to ensure not a single defective product slips through. Don’t worry.”

Ahn Byung-seok struck his chest confidently and spoke with conviction.

“Then I’ll trust you completely, President Ahn.”
“Yes!”

Seok-won continued his tour of the Manufacturing Plant with his entourage, energized by the enthusiastic response.

***

New York Wall Street.
Landon Shore, who had come to work wearing a silk necktie with the Gucci logo, smiled faintly as he watched the Dow futures chart on his monitor.

[6,881.33 (▼ 33.17)]

As a flood of selling pressure triggered margin calls from investors and hedge funds that had leveraged their stock purchases, the Dow index ultimately collapsed to the 7,000 level—the psychological support line everyone had believed would hold.

“Still, the fact that the decline is gradually slowing suggests the panic is subsiding somewhat.”

Indeed, more and more investors were beginning to see this as an opportunity for bargain buying and were gradually entering the market.
Landon leaned back in his plush chair and murmured to himself.

“To predict both the index collapse and that the panic wouldn’t last long—I’ve seen it several times now, but it’s truly remarkable.”

At that moment, the keyphone on the desk rang, and Landon Shore picked up the receiver.

“Hello.”
[We’ve just finished liquidating all the futures positions.]

Hearing Andrew’s voice—now promoted to CIO—Landon Shore’s face brightened with anticipation as he replied.

“Good work. Let me know once the profit settlement is complete.”
[Understood.]

With that, Andrew ended the call briefly.
Setting down the receiver, Landon Shore remained seated in his chair, rubbing his hands together with an expression brimming with anticipation.

“I’m curious to see how much profit we made on this bet.”

Just then, Cathy, the Female Secretary with striking red hair, knocked and entered, placing a thin folder of documents on the desk.

“What’s this?”
“It’s a report on South Korea’s foreign exchange reserves that Goldman Sachs analysts prepared and released today.”

Landon Shore recalled that he’d instructed her to collect and report all information and materials related to South Korea, Seok-won’s homeland.

“I see. Thank you.”
“Is there anything else you need?”
“No, you can go.”
“Yes.”

After Cathy left the office, Landon Shore picked up the report and casually reviewed its contents.

[… For these reasons, South Korea’s foreign exchange reserves fall below adequate levels, making it highly probable that the country will request IMF assistance in the near future, much like Thailand and Indonesia. Should that occur, the won-to-dollar exchange rate is projected to surge to 1,150 won per dollar within two months and 1,300 won within a year. Furthermore….]

“Hmm.”

Landon Shore frowned at Goldman Sachs’ report, which openly predicted that South Korea would face a foreign exchange crisis similar to Hong Kong and Southeast Asian nations already suffering severe turmoil.

“If Goldman Sachs—of all institutions—has released a report like this, then every investment bank and hedge fund on Wall Street must have already read it by now.”

Landon Shore wore a grave expression as he tapped his fingers on the desk, taking a moment to organize his thoughts.
Then he raised one arm to check the time and muttered to himself.

“It’s the middle of the night in Korea by now. A phone call would be a bit much.”

Landon Shore pressed the intercom button to summon Cathy from outside.

“Cathy, come in for a moment.”

As Cathy entered the office and approached his desk, Landon Shore extended the report he was holding and spoke.

“Send this to the boss by fax right away.”

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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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