Sarah Avery (2)
Sarah fell silent for a moment, thinking it over, then spoke.
“For a merger to go through, you need the approval of more than two-thirds of both sides’ shareholders. If it fails, the fallout won’t be light. Even so, do you really think they’ll push ahead with it?”
I nodded with confidence.
“Yes. More precisely, the groundwork for the merger is already underway.”
“The groundwork? What do you mean—oh!”
As if she had suddenly understood, her eyes widened.
“You mean they’re planning to use the stock price as the basis for the merger? So that’s why Hanjeong Mulsan’s stock has been falling lately, while HJ Logics has been rising.”
“Exactly.”
I liked how quickly she caught on.
Hanjeong Mulsan’s operating results for the year had been abysmal, and with the company taking all of its accumulated losses and reflecting them in the accounts at once, it posted a deficit of more than 300 billion won in just the last quarter alone.
With worries about future earnings piled on top of that, the stock had slid from over 100,000 won at the beginning of the year to 40,000.
HJ Logics, on the other hand, had been hitting record highs quarter after quarter thanks to the group’s practice of funneling business to its affiliates and its massive investment spending, and the share price had broken through to new highs day after day.
Sarah organized her thoughts and said, “If they carry out the merger by valuing the companies on stock price, then from the controlling family’s perspective, it’s better for Hanjeong Mulsan’s share price to be as low as possible and HJ Logics’ as high as possible. In that case, HJ Logics shareholders win, while Hanjeong Mulsan shareholders take the loss.”
“Management has probably already started working on the major shareholders.”
Sarah tilted her head.
“HJ Logics shareholders would be getting a bargain, so of course they’d be in favor of it. But I can’t imagine Hanjeong Mulsan shareholders agreeing to a merger plan that hurts them.”
“It’s not necessarily that simple.”
“Why—ah!”
She was about to argue, then clamped her mouth shut as understanding dawned on her.
If the merger went ahead on the basis of share price, it would be unfavorable to Hanjeong Mulsan shareholders and favorable to HJ Logics shareholders.
So everyone except the controlling family should have risen up in protest, but in reality that hadn’t happened.
“Most of them probably hold both Hanjeong Mulsan and HJ Logics.”
“Exactly.”
Institutional investors handling large sums followed the index. That meant they didn’t load up on a single stock; they spread their holdings across many names.
If they held, say, 10 billion won in Hanjeong Mulsan and 10 billion won in HJ Logics, then whether the two merged at a 1:1 ratio, 3:1, or 1:3, the total value would end up the same anyway.
As long as the stock price rose after the merger, there was no particular reason for them to object.
After a brief silence, she spoke again.
“From what you’ve said, it sounds entirely plausible. But how can you be so sure of it?”
I replied with complete confidence, “Numbers don’t lie. After investigating and analyzing every piece of data I could find on Hanjeong Group’s affiliates, I realized this was the best course of action.”
Of course, that was nonsense. I knew because I’d regressed.
Sarah looked impressed.
“Amazing. To figure that out just from analysis... So exposing the Primus Fund’s insolvency wasn’t a coincidence.”
“Yes, well. Something like that.”
It stung a little to be praised for something like that.
“So the reason you’re buying Hanjeong Mulsan instead of HJ Logics is because you think the merger will fail?”
I shook my head.
“Actually, whether it gets rejected or not isn’t that important.”
“Then what is important?”
“Making the stage as large as possible.”
In principle, a stock price reflects a company’s value. That was why people invested by comparing metrics like PER, PBR, and ROE.
But there were plenty of cases where a stock soared for reasons completely unrelated to a company’s actual value, driven purely by supply and demand.
If there are fewer people willing to sell and more people willing to buy, the price goes up. And once the price goes up, even more people want in.
“So you’re planning to sell at the highest possible price and get out during that process.”
“Yes.”
She said carefully, “Hanjeong Mulsan’s market cap is currently 3.6 trillion won. Even if you buy as much as you can with 300 million dollars, that’s only around nine percent, isn’t it? And if the price rises during the buying process, it’ll be even less. At that level, it would be hard to stop the merger.”
She wasn’t wrong.
If I alone waved around less than ten percent of the shares, no one would even bother to listen.
I said firmly, “No. A stake like that is more than enough to throw the entire board into chaos.”
I headed to the office.
After turning in his resignation, Dongho senior had taken leave to use up the vacation days he’d accumulated, so he was coming in from here for the time being. Kim Beom-seok had also shown up in a suit.
To be honest, even though all three of us were at the office, there wasn’t much for any of us to do.
The actual stock purchases were being handled at headquarters anyway.
Still, we needed to know what was going on, so I wrote on the whiteboard and explained what investments were currently in motion.
Dongho senior raised his hand.
“Wait. You’re buying Hanjeong Mulsan stock?”
“Yes. Why?”
“Why? Because I’ve been averaging down on that since the day I joined the company, and I can tell you now—it never goes up.”
Hearing that, I realized something important.
“Oh, right. You bought Hanjeong Mulsan, didn’t you, Senior?”
Dongho senior pressed a hand to his forehead.
“Yeah. I’ve put in over 40 million won, and now I’m down almost fifty percent. I don’t even have money left to average down anymore. I’m wondering if I should just sell now and switch into something else.”
He looked so tormented that I felt bad for him.
“How much cash do you have?”
“About 30 million.”
“Use it to buy more. Borrow money if you have to and buy more.”
“Why would I do that?”
“Because the merger proposal will be announced soon.”
Dongho senior looked utterly bewildered.
“What merger? Between who and who?”
“Hanjeong Mulsan and HJ Logics.”
“What? Hanjeong Mulsan and HJ Logics are merging? Are you sure about that?”
“Yes.”
“No way. I work at a securities firm and I haven’t heard a thing. Who told you?”
“I can’t reveal the source, but it’s one hundred percent certain.”
Public information lost value the moment it became public.
The merger between Hanjeong Mulsan and HJ Logics was being carried out in absolute secrecy. At this point, probably only a tiny handful of executives inside the group knew about it.
Dongho senior muttered blankly, “Hold on. So they deliberately drove down Hanjeong Mulsan’s stock all this time to make the merger more favorable to the controlling family?”
“Correct.”
Dongho senior exploded.
“Damn it! I poured my salary into that stock and bought it without knowing any of this! If the merger goes through like that, won’t the minority shareholders in Hanjeong Mulsan get completely screwed?”
“That’s correct too.”
This merger plan had been designed so the controlling family would profit while Hanjeong Mulsan shareholders took the loss.
Kim Beom-seok slowly raised a hand.
“There’s one thing I don’t understand.”
“What is it?”
“If the plan is to merge in a way that benefits the controlling family, then Hanjeong Mulsan should keep falling and HJ Logics should keep rising right up until the announcement, shouldn’t it?”
“That’s right.”
“Then wouldn’t it make sense to buy HJ Logics?”
I asked him in return, “What do two companies need to do in order to merge?”
“Both sides need to hold shareholder meetings and get approval from more than a third of all shares, and more than two-thirds of the shares represented at the meeting.”
“And what if the exchange ratio is favorable to HJ Logics but unfavorable to Hanjeong Mulsan?”
This time Dongho senior answered.
“HJ Logics shareholders would support it, but Hanjeong Mulsan shareholders would oppose it.”
“Exactly. And HJ Logics already has 25 percent held by Vice Chairman Ju Cheol-jin, so there’s no problem getting that merger plan passed. The real problem is Hanjeong Mulsan. The controlling family’s stake is small, and the minority shareholders will oppose it, so they need to secure votes in favor.”
“You mean the controlling family will buy up shares?”
“The opposing side will do the same.”
Kim Beom-seok said, “So once the vote battle begins, the stock price will rise.”
“Exactly.”
When a control struggle intensifies, it’s no trouble at all for a stock to jump several times over.
Dongho senior tilted his head.
“But if they actually merge after that, wouldn’t it be a total disaster?”
“That’s why we have to stop the merger from happening.”
“How? Are we supposed to go to the meeting and lie down on the floor or something?”
It was no joke or metaphor. If things don’t go the way they want at a shareholders’ meeting, some people really do lie down on the floor.
When money’s on the line, what won’t people do?
I laughed softly.
“Don’t worry. Even if I don’t do it, there’ll be plenty of people lying down.”
It had originally been Jin Se-yeon, who worked at Yuseong Electronics, but she quit and switched careers to become an announcer.
After passing the SBC audition on her first try, she was steadily building her career as a broadcaster.
She ran into her cousin Jiyu, the singer, at the station.
“Unnie!”
“Long time no see. You’ve been doing well?”
“Of course.”
The two of them chatted warmly in a café inside the broadcasting building.
“I’ve been listening to your new song. It’s climbed all the way up to number thirty on the charts already.”
“I was lucky. Now it feels like there’s nowhere to go but down.”
“No way. Everyone around me says the song’s great. At this rate, you might keep climbing and even break into the top ten.”
“Oh, come on, no way.”
“Right! And what happened with the drama audition?”
“They haven’t officially announced it yet, but it sounds like it’s basically confirmed.”
“Really? That’s great. When does filming start?”
“They said next February.”
They were in the middle of their conversation when some students sitting in the café leaned over and spoke up.
“Excuse me, you’re Jiyu, right?”
“Oh, yes.”
“We’re big fans. Could we possibly get an autograph?”
“We’ve been listening to your songs nonstop.”
“Unnie, you’re so pretty!”
At the compliments, Jiyu bowed her head.
“Thank you.”
Watching her cousin autograph things and pose for photos, Jin Se-yeon gave a thumbs-up.
“Oh! Not bad at all. With that level of popularity, you could even aim for Best New Artist, couldn’t you?”
“There are so many nominees that it’ll be tough.”
She had debuted at the end of last year. That meant she was still eligible for awards this year.
“I heard from a senior that this year’s year-end awards are going to be swept by KDK. CeLab’s new song is a total smash too.”
As she spoke, Jin Se-yeon glanced at Jiyu.
“You were supposed to feature on that song, you know.”
“I was.”
CeLab was KDK’s leader and rapper, and also a famous songwriter-composer. Every song he wrote became a hit, and his copyright royalties alone ranked among the top five in the industry.
When CeLab announced he was preparing a new song and looking for a female singer to feature on it, everyone lined up wanting the spot.
But CeLab picked the practically unknown Jiyu, saying he liked her voice.
It was a chance to make her name known to the entire country, a once-in-a-lifetime opportunity. Yet Jiyu had turned it down.
Her agency tried to persuade her, and so did everyone around her, but her mind was made up.
In the end, the feature went to Kayna, the leader of Pink Girls.
The released song, CeLab’s “Your Photo,” became an enormous hit, taking first place on both the digital charts and music shows.
Even event appearance fees soared so high that people said the price depended entirely on who was doing the asking.
The agency had beat its chest in regret, lamenting that they had kicked away a blessing that had fallen into their lap, but by then it was already too late.
“Back when you first got the offer, you were practically jumping for joy. So why did you say no?”
She had asked Jiyu a few times before, but Jiyu had never given a clear answer.
This time, though, Jiyu hesitated for a moment before finally speaking.
“Unnie, the thing is...”
After hearing her out, Jin Se-yeon couldn’t hide her disbelief.
“What? Mi-ru said that to you that day?”
“Yes.”
Jiyu recalled what had happened that day.
It wasn’t just the words—his expression and the tone of his voice had carried a certainty she couldn’t explain.
“And everything he said that day turned out to be true.”
“Maybe he could sense the Primus Fund scandal since it was his own company’s problem, but this is the entertainment industry. The best he could’ve gotten his hands on would’ve been stock-market gossip.”
“Well, it wasn’t just because of that.”
Jiyu had once met CeLab in the waiting room while she was appearing on a broadcast. And back then, she’d felt something she couldn’t put into words—a deeply unsettling feeling.
If I hadn’t listened to him that day, though, I probably would’ve taken the feature.
In a way, she had lost the most important opportunity at the most important moment of her life.
“Do you regret it?”
“There’s nothing I can do about it. It was my choice.”
So she had to accept the consequences in full.
“What a shame. Why did Mi-ru have to say something so unnecessary?”
Well, the person most upset about it is probably the one who said it.
Jin Se-yeon nodded while looking at her cousin, who was forcing a bright smile.
“So how has that senior been lately?”
“Mi-ru? I don’t know. I heard he quit the company, but I’m not really sure what happened after that. He doesn’t seem to keep in touch with the others from his class much either.”
“Really?”
Jin Se-yeon muttered under her breath.
“Was that explosion because of me after all?”
“……”
That doesn’t seem likely.
From talking with him that day, what she’d felt was that he was simply doing what he had to do.
Just as she was thinking that, Jin Se-yeon, who had been looking down at her phone, suddenly let out a sharp cry.
“Ah!”
“What is it, Unnie?”
She held the phone out to Jiyu.
There was a single article headline on the screen.
The moment Jiyu saw it, her eyes flew wide open and she murmured without realizing it.
“No way...”