Chapter 8
Chapter 8
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Translator: MadScientist
Chapter: 8
Chapter Title: A Stock Company Belongs to the Shareholders
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“I’ll… buy Daeha Electronics stock.”
A handshake sealed the deal.
Stock investing at this time isn’t all that efficient. Even setting aside the fact that the stock exchange hasn’t been running properly for long, the risks are too high compared to the volatility and complexity.
The best way to make money right now is land speculation. The myth of unbeatable real estate is a long-standing legend in Korea’s history.
But…
The money itself isn’t the point. As I’ve said time and again, money can be made anytime.
Daeha Electronics’ current market cap is at most a few hundred billion won. If I pour every penny I have into it… I can easily snag about 5% of the shares.
Daeha Electronics’ market cap hits around 100 trillion by 2010 standards, right? This is precious equity I could never get otherwise.
My family wouldn’t even allow me to buy Daeha Electronics stock in the first place. Unless it’s now—when hostile takeovers aren’t even a thought—I can’t open the door to meddling in management.
“Stock? Why buy that?”
I could see Chairman Yoo Seong-pil furrowing his brow as he shot back. His face clearly said, What’s gotten into this kid all of a sudden?
I plastered on a mask of calm composure, a smile like a second skin.
“I’m still too young. Starting a business with this money feels tough right now. And I’m not dumb enough to just dump it in a bank…”
I paused, scanning the faces of the family seated around the table. I’d kept my head down before, so I hadn’t noticed, but up close…
They were pretty decent prey.
Inheriting it doesn’t suit me. I’ll take it by force.
No matter how genius I am or how sharp my business sense, Chairman Yoo Seong-pil would never name me as the next chairman.
It’d cause an uproar, so he’d just hand over a few subsidiaries and call it a day. Just like in my past life with Daeha Group.
So… I’ll take it. What choice do I have?
Just like I resolved at my father Yoo Jin-cheol’s funeral, I want to swallow Daeha Group whole.
Tch. I was hoping for an amusement park, though.
“Hmm. Didn’t you say you were going to start a business last time? Ha-yeon.”
Yeah, I did. And I will start one eventually.
“Later. Probably around middle school or high school… That’s still a ways off, right? In the meantime, I’ll help with Grandpa’s work.”
“Why? Losing your nerve?”
“No, not that. It’s about efficiency. Hmm. You could say I lack confidence that way. I just don’t think I can beat Grandpa in the semiconductor industry. Not right now.”
I said it with a bright smile. He seemed to like it—laughter bloomed on Chairman Yoo Seong-pil’s face.
“Ahahaha! Right, exactly. You think you can take on semiconductors too?”
“Yes. If I were in college, I’d gather people, get funding, and develop memory chips. But I’m still a kid, right? And my stamina’s no good. Ugh. Nothing I can do about it now.”
My mind might be an adult’s, but my body was still that of a soft, fragile child. I needed at least ten hours of sleep a day.
I cleared my throat with a cough.
“Truth is, I was planning to give it a shot. Until last month, before I saw the news. They succeeded with 64K DRAM, right? That’s when it hit me. No matter what other industries I tried, I couldn’t catch up to that one thing…”
All lies, of course. Just flattery to tickle Chairman Yoo Seong-pil’s ears.
“...?”
Yoo Jin-seok tilted his head at my words, but Chairman Yoo Seong-pil was different.
His broad grin and hearty laugh made him look like a completely different person from moments ago.
“That’s right! This semiconductor thing—it’s different! Electronic devices need chips like people need food. If you crank them out in a factory, it’s a total goldmine, isn’t it?”
“Hehe. Seeing how much Grandpa loves it makes studying all worthwhile.”
Of course, I was the only one reacting. The younger grandkids were too little, and even Yoo Jin-seok and Yoo Jin-ha didn’t fully grasp the implications.
Daeha Electronics had trailed leading semiconductor firms by a full ten years. In high-tech, a decade was an insurmountable gap—even in dreams.
For a Korean company not even in the advanced nation club, closing it would be lucky if it didn’t widen further.
But… Daeha Group pulled it off. They developed 64K DRAM, shrinking the gap to three years. Then, seven years later in 1990, they nailed 16M DRAM, zeroing it out. Daeha Electronics becoming Korea’s top dog was inevitable.
“But why stock? Buying that doesn’t mean investing in the semiconductor business. Funding comes from elsewhere, and stock’s totally different. You get that, right?”
Chairman Yoo Seong-pil eyed me skeptically. Fair question.
But I was a kid, with the ultimate cheat code.
Play dumb.
“Huh… It’s different? Isn’t a stock company owned by the shareholders? So if I buy Daeha Electronics stock, I can exercise control and get involved in the business. That’s basically partnering, right?”
Half right, half wrong. A stock company belongs to shareholders in theory… but in Korea, it’s a bit different.
The owner family, holding just a sliver of shares, usually controls everything. So when they issue new stock or split off subsidiaries, they wield that control to sweep up shareholder money.
Someone might ask what shareholders can do when owners fatten their own pockets with their cash.
Short answer: nothing. That’s why so many went bust.
…Impossible in the US, usually. Hell, it shouldn’t be possible in Korea either.
Even founders are just major shareholders post-IPO. Diverting other owners’—the shareholders’—money to themselves is absurd.
But in Korea, it happens. Why? Beats me.
“Hah. Partnering in business? With me?”
“Yes. I told you—I can’t beat Grandpa no matter what. So what can I do? Join up. Or you could subcontract the foundry side.”
Taiwan’s TSMC would go that route soon enough. No competing with customers.
I was dipping a toe into Grandpa’s semiconductor empire that way, but Chairman Yoo Seong-pil sliced through my logic like butter.
“You’ve done your homework better than I thought. Just missed the key point.”
“Huh? What’d I miss? I’m smart, sure, but a total bookworm. No street smarts.”
“A short-legged girl who can’t even sit at a desk talks big. Why would I hand you control? And you’re a minor— even if it’s listed, you can’t buy stock without my okay.”
“Then what’s your answer, Grandpa?”
I gazed at him with innocent eyes. We’d just breezed past the chaebol’s touchiest issue: succession.
“Finish elementary school, then start your business. For now, buy land in Gangnam or, if you’ve got an eye, aim for new city developments and grab some in the Gyeonggi area.”
I pouted like a sulky kid, throwing a tantrum.
“Fine, I’ll do both. Land and stocks.”
“What do you take my words for?”
Chairman Yoo Seong-pil let out a baffled chuckle. I’d ignored his no-stocks advice right after, acting like a sudden brat.
“I still wanna buy stocks. They’re cool. Always wanted some since way back…”
My eyes sparkled like a child’s as I said it. He cocked his head, puzzled, then relented.
“Whatever. Talking to you, I can’t tell if you’re a six-year-old or some grizzled fox who’s seen it all. Moments like this, you’re all kid.”
“Hehe. Love you, Grandpa!”
That’s more like it.
Kids really do have it good.
◇◇◇◆◇◇◇ My plan, set at my father’s funeral, was simple.
Seize Daeha Group’s control via hostile M&A. M&A means mergers and acquisitions—usually friendly deals where companies agree to hand over or take control.
Hostile M&A is different. It exploits the fact that public companies’ stocks can be bought and sold anytime… to forcibly grab control.
A stock company belongs to its shareholders, after all.
Chaebols’ circular ownership structures make it possible. It’s magic letting a tiny stake control everything—but from the raider’s side, a partial stake lets you attempt a hostile takeover.
Daeha Group’s is complex, but the core is affiliates becoming each other’s major shareholders.
Companies can own stock too, not just people. So they buy with corporate funds.
No need to overthink—here’s a simple example.
Say I’m the major shareholder of Company A.
A owns B, so naturally, I control B too. B is A’s.
B owns C. Same logic—I own C as well.
It doesn’t stop at three, obviously. Dozens of affiliates interlock this way.
Control the key one, A, and you’re the group’s major shareholder!
Fine up to here. It’s called a holding company structure—decent enough.
But… if C owns A, it loops. That’s circular ownership.
A owns B, B owns C, C owns A. In this weird web, the owner needs less and less stock to rule.
Extremely, 3% lets the owner chairman every affiliate and run the group like their own.
In other words…
If I snag just 3%, I can devour Daeha Group.
All of it.