Golden Spoon Investment Portfolio - Chapter 389

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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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389. You’re saying you’ll repurchase company shares?

Nearly a hundred individual investors crowded the trading floor of Daehung Securities in Yeouido, gathered in small clusters as they gazed helplessly at the massive market display board covering one entire wall.

“This can’t be happening…”
“Damn it. Another drop today.”
“They said everything would be fine once we got the International Monetary Fund bailout. Why does the stock market keep doing this!”
“How many days has it been falling now?”
“Sigh.”

The market board was painted entirely in blue—the color of losses—making it nearly impossible to spot a single rising stock. Investors either poured out sighs or sat down on the trading floor in complete despair.
Some clutched rolled-up newspapers and spewed curses, but most had long since exhausted their capacity for anger. They simply stared with resigned expressions as the stock prices continued their relentless plunge.
This scene made it clear: with the index having crashed past the halfway point and hit rock bottom, the stock market had descended into complete panic.
The atmosphere reeked of anxiety and terror—even stocks once considered blue chips sat at their daily loss limits with no buyers in sight.
As a result, contract completion rates fell below thirty percent, making it impossible to sell even when investors desperately wanted to cut their losses.
Moreover, countless investors already had accounts showing losses exceeding fifty percent, so selling at a loss now seemed pointless.
In this climate, when the KOSPI index finally breached the 400 line—long considered the last line of defense—it plunged investors into even deeper despair.
The counter window on one side of the trading floor became a stage for endless confrontations between investors and securities company staff throughout the day.
Once again, numerous individual investors crowded around the counter, cornering the employees to pour out their grievances or unleash torrents of harsh words.

“What am I supposed to do with my money!”
“You said it would go up if I just bought!”
“Get the manager out here right now!”

Angry shouts erupted like a dam bursting, and one elderly woman collapsed on the floor, wailing in anguish.

“That was my husband’s retirement fund—I’ve lost it all. How are we supposed to live now? Oh, what a cursed fate.”

The woman sobbed uncontrollably until she finally collapsed from exhaustion and had to be carried out.
The counter staff, too, were worn down and emotionally drained from days of dealing with furious investors.
They understood all too well how immense the anger and sense of loss must be for those who had lost their entire investments or suffered devastating losses.
Yet despite their sympathy, there was nothing substantive they could do. They could only endure the abuse silently and try to soothe the investors’ fury.
Seok-won, dressed in a black pinstriped suit, stood to one side of the trading floor with Han Ji-sung, observing the scene for a long while.
Feeling a vibration in his pocket, Seok-won pulled out his mobile phone and answered the call with a slightly subdued voice.

“Hello.”
[This is Manager Choi Ho-geun. Sir, do you have a moment to talk?]
“Go ahead.”

Seok-won sensed the stiffness in his voice and instinctively knew something had happened.

[The won-dollar exchange rate just broke through 1,200 won.]

Just as I had feared, the impact of Moody’s downgrading Korea’s sovereign credit rating early this morning was already manifesting itself.
Since this was expected, I asked calmly without much alarm.

“How is the market reacting?”
[Both the stock market and the expectation that everything would be resolved once the IMF bailout is requested are gradually fading, and anxiety is growing.]

With negotiations still ongoing, both the government and the market had been viewing the situation far too optimistically.

[Unlike before the IMF announcement, the government and the Bank of Korea aren’t completely abandoning currency defense, but the intensity of intervention has dropped significantly, which is raising concerns that the exchange rate could spike further.]
“It’s not that they’re unwilling to intervene—it’s that foreign reserves have dwindled to dangerous levels, so they can’t act aggressively.”

Manager Choi Ho-geun let out a small sigh and continued.

[I see. Then the situation is more serious than I thought. That’s probably why, even when finance companies place orders to secure the dollars they need, banks won’t sell them a single dollar.]
“If we want to treat a wound properly so it doesn’t fester and rupture again later, we have to cut away the infected area completely, even if it causes pain. That’s what this process is.”
[You’re right.]
“Keep monitoring the market and contact me immediately if anything new develops.”
[Understood.]

After ending the call, I pocketed my phone and glanced once more at the investors on the trading floor.

“Let’s wrap this up.”

I turned and walked away.
The two of us left the first-floor trading floor and took the elevator straight to the president’s office on the top floor.
As we passed through the door held open by the female secretary, Go Young-il, the president of Daehung Securities, stood up from his desk in shirtsleeves to greet us.

“Welcome.”

Thanks to Seok-won’s advance preparations, Daehung Securities was weathering the foreign exchange crisis without major incident, unlike other securities firms.
However, the stress from the stock market collapse had taken its toll—his face bore the marks of exhaustion I hadn’t noticed before.
Go Young-il, the lean-framed president, gestured toward the leather sofa and offered me a seat.

“Please, have a seat.”

Seok-won gave a small nod and sat in the right-side seat, and Go Young-il moved to the opposite sofa—not the center seat of honor—and settled in.
Just then, a female secretary knocked and entered, setting down two cups of coffee on the table before bowing and leaving.
Seok-won picked up his coffee cup and spoke first.

“I stopped by the trading floor downstairs on my way up. The market conditions don’t look good today either.”

Go Young-il let out a small sigh and responded.

“Since you’ve already seen the trading floor, I’ll tell you plainly—it’s absolutely suffocating.”

Go Young-il spoke with a tone of complaint, his eyes darkened by the extreme stress.

“The index has been declining continuously since the beginning of the year, causing our trading commission revenue to plummet, and our proprietary trading profits have shrunk significantly compared to when the previous chairman was here. We’re barely avoiding losses. I had hoped that once we received IMF assistance and the foreign exchange crisis stabilized, the stock market might recover somewhat. But with talk of restructuring insolvent companies accelerating after the bailout, instead of rebounding, the index just keeps falling. It’s utterly frustrating.”

Go Young-il heaved a deep sigh and muttered gloomily.

“It feels like we’ve entered a long, dark tunnel with no way out.”

Seok-won took a sip of coffee, set it down, and spoke in a calm voice while crossing one leg.

“Since we’ve been struck by such a serious illness as the foreign exchange crisis, it’s inevitable that recovery will take time. But there’s always light at the end of a dark tunnel, so let’s hold on and endure just a bit longer.”
“Yes, that’s what we must do.”

Go Young-il answered with a slightly more composed expression.

“On my way here, I noticed Daehung Securities’ stock price fell again today—it’s barely holding at three thousand won.”
“…Yes, that’s correct.”

At Seok-won’s words, Go Young-il’s face grew troubled once more.

When Chairman Park Tae-hong acquired Daehung Securities, the per-share acquisition price was 20,200 won.
Yet the current stock price had plummeted to merely 3,000 won—a staggering decline of over 85% in the interim.
Admittedly, that price had included a control premium, but even accounting for that, the collapse seemed excessive.
When Seok-won took over the shares not long ago, the stock price had already fallen 22.8% from that valuation.
No matter how dire the national crisis—with the entire economy, not merely the stock market, in turmoil—Go Young-il, as president managing the company, found himself in an genuinely awkward position.
Particularly so before Seok-won, who during his tenure at Daehung Securities had dramatically expanded company revenues with astonishingly high profit margins.
Yet Seok-won, seemingly not here to reproach the stock decline, shrugged his shoulders and spoke.

“The major blue-chip stocks have halved or worse, and the index itself has been decimated. It stings, certainly, but the stock price decline is unavoidable.”
“Still, I have no excuse.”

Go Young-il, inwardly relieved, remained watchful of his expression.
Seok-won, his face turning grave, continued.

“Unavoidable circumstances or not, if this continues unchecked, there’s a genuine risk the stock could fall below 1,000 won and become a penny stock. We must prevent that.”

Go Young-il’s complexion hardened at the blunt words.
Stocks trading below the face value of currency were commonly called penny stocks.
Given the current price of 3,000 won, such concern might have seemed excessive.
Yet with the stock having plummeted over 80% from the 20,000-won range it had traded at last year, and given the hopeless sentiment pervading the current market, such a possibility could not be entirely dismissed.

“I’m planning to conduct an open market repurchase to enhance shareholder value and support the stock price.”
!

Taken aback, Go Young-il’s eyes widened as he sought clarification.

“You mean to conduct treasury stock repurchases?”

Seok-won, leaning back against the sofa, shook his head lightly.

“It’s similar, but rather than using company funds to purchase shares, I intend to acquire them using my personal capital.”

Go Young-il’s expression grew even more astonished.

“P-personal capital, you say?”
“That’s right.”

Seok-won replied with composure, yet such a declaration—to purchase shares with personal funds despite their collapse—was not something one could casually propose.
Receiving bewildered looks, Seok-won posed a question.

“I believe the volume of Daehung Securities stock traded on the market is slightly over twelve million shares. Is that correct?”
“Yes… that’s correct.”

Go Young-il, barely managing to suppress his shock, nodded in acknowledgment.

“If we conduct a public acquisition of a 30% stake at 4,000 won per share, don’t you think the downward trend will stabilize?”
“3, 30 percent, sir?”

Unlike Go Young-il, whose mouth hung agape, Seok-won spoke with casual indifference, as though he were simply deciding on lunch.

“That’s the minimum needed to quell investor anxiety, wouldn’t you say?”

Seok-won added, his eyes gleaming as if this were no mere improvisation.

“Combined with our existing stake, we’d exceed 60% ownership. This presents an excellent opportunity to solidify our management control.”

Go Young-il, who had been nodding absently, suddenly snapped to attention and leaned forward in his seat.

“30% exceeds 5.4 million shares. At 4,000 won per share as you mentioned, we’d need over 21.6 billion won.”

His eyes posed the question silently: did he actually have that kind of capital? Seok-won answered.

“I’ll transfer 22 billion won into the corporate account tomorrow to be safe. Proceed with the acquisition using those funds.”

The moment Seok-won agreed to deposit the acquisition funds so effortlessly, Go Young-il found himself at a loss for words.

“The market conditions are poor and the stock price has fallen sharply, but I believe Daehung Securities’ fair value is at least 10,000 won per share.”

As Seok-won spoke, Go Young-il, his expression dumbfounded, quickly nodded in agreement.

“Then even with a premium, acquiring shares at 4,000 won per share would be quite profitable.”
“…That’s one way to look at it.”

As Go Young-il responded with an expression as if possessed by a spirit, a smile played across Seok-won’s lips.

“With a public acquisition like this, investors benefit knowing the stock won’t fall further, and I secure a larger stake at a bargain price. It’s mutually beneficial—there’s no reason not to do it.”

His logic was sound, but in a market saturated with fear like this, only Seok-won possessed the audacity to act so decisively.
Go Young-il felt bewildered yet profoundly impressed by Seok-won’s capabilities.

“Still, the situation could worsen, so wouldn’t it be prudent to observe the market sentiment a bit longer before purchasing shares?”

As I cautiously made the proposal, Seok-won shook his head.

“Of course, buying at lower prices would be more profitable, but that only increases the suffering of our shareholders.”
“!”

Seok-won continued, watching President Go Young-il’s expression of admiration.

“There’s certainly an intention to solidify management control by increasing our stake when the stock price falls, but there’s also an intention to demonstrate responsibility as the major shareholder and company owner so that shareholders can trust the company. So let’s proceed as planned.”

When companies face difficulties, shareholders and employees often take a backseat, but President Go Young-il was genuinely impressed by Seok-won’s determination to fulfill his responsibilities as owner.

“I failed to grasp such profound intentions. My thinking was too shallow.”

President Go Young-il spoke with sincere conviction, bowing his head.
Seok-won offered a slight smile at the sight.

“Once the purchase funds are deposited, we’ll issue an announcement immediately to reassure the shareholders.”
“Understood.”

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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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