Apex Capital (1): The Fallout
> Master. Apex Capital's sell orders are starting to pour in.
I'd been waiting so long for them to make a move my neck was getting stiff, but they decided to greet me first thing Monday morning with a crisp hello. The chart, which had been glowing red from hitting the daily limit up but still had energy left to climb, flipped colors in an instant and started dropping.
-2%
-5%
-12%
"Whoa... do those bastards have no regard for consequences? They're throwing everything at us, down to their very souls."
The theoretical maximum a stock can drop is 100%. But on the flip side, a stock can theoretically rise to infinity, which means the losses for a short seller — someone who only makes money when prices fall — are also theoretically infinite.
> Apex Capital just published their short report. Shall I show you?
"Yeah, let's see what they had to say."
> In essence: considering the physics engine and other elements applied to Hwarang, the quality exceeds industry averages, which would have required astronomical R&D costs. Therefore, reaching a break-even point with current sales is impossible. Additionally, the server cloud costs required to maintain concurrent users could be a financial burden for Neo Gate. That's the gist of it.
I scrolled through the long, detailed report, flipping pages until I reached the end where the target price and investment opinion were listed.
"Target price is one-tenth of current value, and the recommendation is a strong sell."
Even reading it in English, it wasn't hard to understand, and they'd laid out supporting arguments for their claims. If you only looked at this report, there wouldn't be much to rebut.
"What's the reaction like?"
> A translated version of the report is being shared across stock community forums and brokerage discussion boards. Opinions are split about 6:4.
Since I'm not a full-time professional stock investor, I don't really know who these guys are. But for people who trade stocks professionally, they apparently have quite a reputation.
"Are we the 6 or the 4?"
> The 4. Apex has built up a reputation over time, and the report itself is well-constructed, so slightly more people are agreeing with their assessment.
Even considering that factor, there had to be a fair amount of jealousy and spite from people who missed the rally.
"What about our response? Should we lend them a hand?"
> As if. If they can't handle this much, the whole Black Ridge team should pack their bags.
It was the time of year when spring transitions into summer, but the trading room at Black Ridge Capital was always running its cooling system thanks to the countless computers operating simultaneously.
"We've broken through -14%. More volume coming in from Apex."
"Keep absorbing. Scoop up every bit that comes our way."
Mark's voice was relaxed even as his subordinates reported real-time price movements. He stood up from his seat to survey the team when David approached him.
"Mark, you sure it's okay to absorb all of this? That's a lot of volume."
If you were just listening to the words, it might sound like concern, but David's expression looked just as enthusiastic.
"Arthur already signed off on it. We've got more than enough capital, and there's no reason not to take it when the job is about turning some guys popping champagne in New York into homeless bums."
"Still, the report itself was well done. You saw it too, right?"
"I did. They write pretty well, don't they? Maybe I should recommend they head to LA instead of New York and try writing a movie script."
He'd delivered the joke with a straight face, but seeing his colleague's squinting eyes, he shared what he'd heard yesterday in a more serious tone.
"I'm telling you, it doesn't matter. The higher-ups said there's no problem, and Neo Gate said they're releasing a rebuttal soon. Our job is just to make money."
If the top hadn't given a firm answer, he might have been worried too. But with a clear confirmation that everything was fine and a promise of additional funding if needed, he was ready to go wild with confidence.
"Is it because our buying power is too strong that it won't drop further? Guess they're starting to sweat over there."
Apex must have thought they'd easily break through -20%, but unfortunately the stock was trading sideways at -18%. Seeing it hold steady without much more movement, it looked like Apex's ammunition had run dry.
"They're working all night on the other side of the planet, so let's send them a little gift to keep their spirits up."
We'd been taking hits for about four hours. Now it was time to give some back.
> Which method should we use? We could pre-disclose this quarter's provisional earnings results, or we could post a direct rebuttal on the website.
"Both. Do both. If you're going to give a gift, make it a big one."
Whether they'd actually interpret it as a gift was questionable, but I'd made up my mind to give one.
> Understood. I'll distribute them simultaneously.
About five minutes after the materials were released?
Neo Gate's stock price, which had been dancing energetically across the monitor, suddenly froze.
Static VI (Volatility Interruption) has been triggered. Trading will switch to single-price auction for 2 minutes.
A system designed to temporarily halt trading when a stock suddenly skyrockets or plummets, softening the market impact. Once the disclosure went up and news spread to enough people, a massive wave of buy orders flooded in, forcing the system to slam on the brakes.
"What's the reaction?"
> Traffic on domestic stock-related communities and discussion boards is exploding right now. I'll filter out the most viewed posts for you.
The articles from two financial newspapers were worth reading, but you couldn't beat the raw, unfiltered reactions from the community.
Title: Apex looks pretty fucked ngl, thumbs up if you agree lololol
Author: Anon93ㅣViews: 15,421 ㅣUpvotes: 172
Dev cost was 150 billion they say, what now lolololol
Everyone was so saturated with dopamine their brains had turned to mush.
Title: But is 150 billion dev cost for real?
Author: Anon93ㅣViews: 9,623 ㅣUpvotes: 74
If they spent 150 billion and got that quality, it doesn't add up unless they were torturing aliens
Title: Short squeeze confirmed?
Author: RetireOnStocksㅣViews: 19,235 ㅣUpvotes: 201
Apex is seriously fucked I think
I was browsing the hot posts on the community when a notification arrived that the stock had hit the daily limit up.
+30.00%
"Clean. They must be loving it in New York too, right?"
> They're probably over the moon.
CRASH—!
A premium crystal champagne glass shattered against the marble floor, scattering into a thousand pieces. Richard stared at his monitor with trembling hands, then couldn't contain his rage and hurled the monitor to the ground as well.
"FUCK! FUCK! How is this possible? HOW IS THIS POSSIBLE?"
Unable to control his fury, he was in the middle of smashing everything in his office when his staff burst through the door.
"Richard! If we don't cover our positions immediately, we'll get a margin call!"
The word "margin call" cut through Richard's rage like ice water, cooling his head in an instant.
"Quick, quick — contact the Asia desk and tell them to buy everything at market price! Whatever it costs, just cover the short positions! Do you understand?!"
"That's... there are no shares available on the market. Someone has swept up and locked away all the floating supply. Even if we scrape together everything currently available, it's impossible to cover..."
The strength drained from Richard's legs as he listened to his subordinate. He collapsed to the floor with a thud, instinctively sensing his own ruin and that of his firm.
> Apex Capital has reached out. They're requesting an off-market trade.
"They've got their heads on straight, huh. They know they'll die if they hold out?"
The math was simple. With losses confirmed to be at least over a trillion won, they'd be looking at the cold Hudson River instead of the Manhattan skyscrapers.
"If we don't accept the off-market trade, they go bankrupt?"
> The probability that they can't handle the margin call is extremely high. Since it was Apex's own miscalculation, no one will extend a hand to help. They'll be forced to liquidate their other high-quality assets and enter bankruptcy proceedings.
If we hadn't defended properly against Apex's attack, it would have been Neo Gate facing bankruptcy.
"Don't accept. They threw the first punch and now they want to pretend it never happened? I don't know what legal system in what country works that way."