The Gallery and the Short Report

One of the hottest haunts among stock traders in South Korea was the US Stock Gallery — known to everyone simply as Migugal. These were people who wouldn't touch ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠a single share on the KOSPI, yet would happily empty their pockets into American stocks all the way across the distant Pacific, and like nocturnal creatures they came alive the moment night fell.

It was a place where countless desires collided, where posts of triumph and despair crossed paths in an endless stream. Most of it was meaningless garbage — bragging, self-pity, or walls of outright begging — but every so often genuinely useful information or razor-sharp analysis would surface among the dregs, which was exactly why so many people frequented the site and dropped by at least once.

And when fresh news hit EDGAR, it spread through this community faster than it did among the Americans on the mainland itself.

The terms were so extraordinary that no one could quite believe a corporation of Ontel's stature had agreed to them — generous to the point of outright excess, and everyone was scratching their heads. But the gallery's collective logic was simpler than one might think.

Convinced that a giant like Ontel would never sign such a deal for nothing, people began mashing the buy button on pure instinct. That mindless flood of capital set Ontel's stock price twitching and stirring. And before long, the official announcement from Ontel's CEO Jonathan was more than enough to short-circuit everyone's reason.

Ontel had long been dismissed as a company blind to everything but quarterly earnings, neglecting real technology development. Its glorious past was long gone; outclassed products ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠had bled away its competitiveness, and it had been walking a steady downhill slope. So when the CEO himself stepped forward to declare that they would leap once more and pour the company's entire strength into a new semiconductor, the market cheered — and reacted violently.

Like a troop of chimpanzees, everyone pressed the buy button with a single heart, cheering. Ontel had been in a steady decline for months, so their emotions ran especially deep — but not everyone was celebrating this turn of events.

"Holy shit. What the hell is Ontel playing at?"

"A hundred million plus a 15% royalty? Have these bastards finally lost their minds completely?"

"Optical semiconductors, out of nowhere? Is that even commercially viable?"

The hedge funds of Wall Street reacted faster and more sensitively to the shifting stock price than anyone else alive. These were people who would charge at anything that made money regardless of fire or water, and they could not hide their bewilderment at this unforeseen variable.

"Goddamn it."

Nicholas Coldwell, Chief Investment Officer of Parquet Capital. He ground his teeth as he stared at the chart of Ontel's stock climbing steeply in green.

"Position status?"

"From a gain of $800 million, at the current price... we're showing a loss of $50 million."

"Shit! One lousy hour and we're about to cough up every dime of this year's gains."

It was an absurd situation — a position that had been in profit a mere hour ago had flipped into ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠the red in an instant. Fortunately, they had been shorting steadily from high price levels, so the loss was not yet severe. Which was why Nicholas wasn't considering unwinding the position just yet.

"Have you figured out what the hell is going on?"

"Yes, sir. I've made calls to the other traders working with us and to insiders at Ontel... and something is definitely off."

"What's off?"

"The Limitless Research Institute — the outfit Ontel signed the contract with. According to the filing, they're based in Korea, and the institute was established barely ten days ago."

"What...?"

"What's more, I checked the address registered for the institute through Google Earth... and this is the building they're talking about."

"That... is supposed to be a research institute?"

"Yes. I found it so strange I verified it several times. It's confirmed."

"..."

A single building on the outskirts of Cheongju, South Korea. Set somewhat apart from the city center, in a badly run-down area surrounded by fields and orchards, it was a decrepit structure that looked thirty years old at a glance — older. As Nicholas stared at the photograph, he was left so dumbfounded that no words would come.

"Ontel is partnering with a company based in a place like this... to develop optical semiconductors?"

"We have to assume that's essentially impossible. As of now, optical semiconductor technology can't be commercialized. Investment in the field isn't entirely absent, but the research results to date are nowhere close. Realistically, it's a technology expected to take at least another thirty years."

His subordinate flatly declared it a miracle technology that could not possibly appear in this era. The moment Ontel's CEO's announcement had dropped, the man had been phoning prominent scientists across the industry, and as he handed over the compiled report, Nicholas rapidly recovered his composure, pieced together everything he had confirmed, and reached a conclusion about the situation.

"So this Limitless outfit is most likely a paper company."

"That's ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠my assessment as well."

His subordinate nodded in agreement. And using their superb network of contacts and formidable brains, they began constructing their own reasonable theory for why Ontel had pulled such an insane stunt.

"Then let's assume the deal is pure fabrication. Why would Ontel do something this deranged? To the point where the CEO himself had to step out?"

"Most likely pressure from debt and deteriorating earnings. The convertible bonds maturing within three months alone total roughly $3 billion. Even just to stave off repayment, they probably needed a short-term boost to the stock price."

"There's also the credit rating issue. There's a rumor going around that Moody's is considering downgrading Ontel from A- to BBB+. If that happened, their corporate bond issuances would be in trouble too, so they may be scheming to prop up the rating through a rising share price."

Ontel was already overgrown with nothing but negative news and grim indicators. That was why Nicholas became firmly convinced he understood why they had done something so insane.

"So... those Ontel bastards got cute and screwed us over?"

"That seems highly likely. The contract terms themselves look absurd, but... if you scrutinize it strictly as a legal matter, there's no real problem with it."

Even if the 'technology' itself was bogus, the 'contract' had genuinely been signed — so strictly speaking, it wasn't a false disclosure. If they failed to produce an optical semiconductor in five years, they'd simply be incompetent fools who failed at development, not criminals. Nicholas therefore regarded Ontel's move as nothing more than a reckless gambit by a company desperately trying to put out an immediate fire.

"Hmm..."

Now that the picture had more or less assembled itself in his head, Nicholas could regard the chart with a measure of composure. And before long, gazing at Ontel's stock price — which had blown past 35% and was now up a full 50% — he sank into thought.

"Current position status?"

"...A $500 million loss. Roughly minus seventeen percent."

Parquet Capital held a short position on Ontel alone worth a cool $3 billion. For a fund with roughly $20 billion under management, a loss of this size was a serious wound — under normal circumstances, Nicholas would have unwound every position on the spot and capped the damage. But right now, the situation was a little different.

"How much additional capital can we deploy right now?"

"Excuse me...?"

His subordinate echoed the question with a slightly flustered look. But he quickly recovered, hurriedly tapping at his keyboard to check something before answering.

"Short-term bonds and cash on hand come to roughly $1 billion."

"A billion, huh..."

Nicholas drummed his fingers on the desk repeatedly, muttering something under his breath. Then, as if he had made up his mind, he sprang to his feet and issued orders to his subordinates.

"We're putting $3 billion more into the Ontel short position."

"Yes... yes? Th... three billion more?"

"Boss, isn't that far too dangerous?"

"Dangerous? It would be, if that contract were legitimate. But you all know as well as I do — can Ontel survive in the current semiconductor market on the back of a sham contract and a brief sleight of hand? With their technology already obsolete and their earnings hitting rock bottom?"

Ontel currently possessed nothing, merely whispering a hollow, inflated, sugary vision of the future to numb the public's reason. And Nicholas, certain that he had seen straight through their ugly underside, issued his orders in a resolute voice that brooked no objection.

"Liquidate most of the positions we're holding. Raise the $3 billion and dump all of it into Ontel."

"The risk is enormous, but so is the reward."

They were already down $500 million. But Nicholas knew that Ontel's stock, up 50% in barely three hours, was a bubble, and he did not doubt for a second that the capital being deployed now would come flowing back soon enough as exquisitely sweet profit.

And so... he decided to go a step further.

"Ah, and we'll draft a short report and publish it too. The title will be..."

A short-seller report was a weapon hedge funds used to strip a company's fraud bare and deliver a psychological blow to the market. There was the risk of exposing one's position, but if the thesis was solid, it could send a stock plummeting into the abyss in a single stroke. So Nicholas ordered the report's release and personally supplied its title.

"What Ontel Bought Wasn't Tech—It Was Time. Let's go with that."