Ransomware (7)
Chairman Taylor looked at me and said, “We hadn’t exactly ignored the idea of entering the lodging-sharing business. But we concluded it wasn’t commercially viable.”
“Why not?”
“How could we possibly compete with Airbnb and the others by jumping in so late? On the contrary, if we entered the market and damaged our brand image, we might end up putting the hotel business itself at risk.”
That was true enough. If lodging-sharing had been easy, other hotel groups would have launched it years ago.
Anything sounds simple when you say it.
But turning words into reality always came with a thousand obstacles. Fortunately, I already had a solution for that.
“What if there were a way to avoid both direct competition and brand dilution?”
“And what would that be?”
“Target the high end. Start by offering not cheap rooms, but expensive private estates and European castles.”
After the global financial crisis, inequality had only grown worse. The rich had become richer, and demand for luxury goods and high-end cars had exploded.
There was plenty of demand in the luxury travel market. If the service was good enough, people would gladly pay for it.
“Then you’d have to secure those estates and castles first, wouldn’t you?”
“The luxury homes in major cities are already occupied by someone. And Blackwood already has hotels there anyway, so that isn’t much of an issue. But the villas owned by wealthy families in the Mediterranean or the Caribbean, and the large estates in scenic rural areas, sit empty for more than three hundred days a year. They’re nothing but a drain, with taxes and maintenance costs going out every month. If we could lease those properties, wouldn’t that create a new source of revenue?”
Even so, Chairman Taylor didn’t look convinced.
“It’s a good idea in theory, but if the wealthy people I know had to choose, they’d rather leave the house empty than rent it out to strangers.”
“Why is that?”
“How can they know what random people might do to their homes? There are plenty of cases where bad-faith customers have ruined a place. If it were me, I wouldn’t want the headache—or the unpleasantness—just to make a few extra dollars.”
“So rich people won’t rent their homes to just anyone?”
“Exactly.”
“Then the answer is simple. It just can’t be just anyone.”
“What do you mean?”
“Blackwood has years of customer data, doesn’t it? Who has money and who doesn’t, who keeps the places they stay in clean, who’s a good customer and who isn’t.”
Data was an asset. The important part was how you used it.
“If we use Blackwood’s data to carefully select only VIP members and top-tier customers, then only those people need to be allowed to rent. And Blackwood already has the know-how from managing 5,300 hotels flawlessly. If Blackwood handled the management and cleaning of those estates, wouldn’t both the owners and the guests feel secure?”
Chairman Taylor jumped at that, looking as if he wanted to say, Why hadn’t I thought of this before?
“Also, Europe has countless castles, and many of them are struggling with maintenance. Some of them are so neglected that local governments try to sell them off at bargain prices and still can’t find a buyer. Most castles are in remote places with poor transportation, and since they’re considered cultural heritage sites, renovations and structural changes are difficult. Blackwood could buy or lease those properties, restore them, and turn them into destinations. Nobody wants to live in a castle for the rest of their life, but everyone would want to experience staying in one for a few days.”
Chairman Taylor studied the materials with a cautious expression.
“If we launched a service like that, how much would hotel traffic fall?”
When a company introduces a new product and its core product’s sales drop, that’s a loss. It’s called cannibalization.
“According to the simulations Snow Crash ran using Mimir, it would have almost no impact on hotel traffic. The purpose of the trip and the travel pattern are different. As the statistics show, people who use lodging-sharing stay more than twice as long as hotel guests and spend more money. Of course, I can’t say the impact would be zero. That’s exactly why we need to move fast. If another company starts first, we’ll lose customers. But if Blackwood launches it, we can manage member cards and points together and draw in even more customers.”
If there was a mansion or castle I’d always wanted to visit, but only VIP members could book it?
Then customers would try to raise their status by using Blackwood hotels more often.
On the other hand, if they had points or coupons from lodging-sharing?
Then, just to use those points, they’d choose Blackwood hotels instead of some other chain when they went on business trips.
Before long, Chairman Taylor was leaning forward so far that he practically had his whole body over the table.
“What should we do about travel?”
“If we start a lodging-sharing business, we can expand travel destinations far beyond the cities where Blackwood hotels already exist. We can also connect it to local experiential tourism products. And what about a service for sharing private jets?”
“Private jets?”
“Yes. Most of the private jets owned by the rich just sit around taking up space at airports, don’t they? We lease them to VIP customers. If Blackwood is the one managing them, wealthy clients will trust us with them. This is the kind of service a startup can’t pull off easily. It’s only possible for Blackwood, which has spent more than a century building trust with its customers.”
Innovation doesn’t have to be grand.
Maximizing the efficiency of what already exists is innovation, too.
“Think about it. Rent a private jet at airports all over the world, then travel through mansions and castles across the globe. If customers could have that kind of experience, they’d be more than willing to pay for it. That’s a service only Blackwood can offer. And Snow Crash can build the system needed to make it work.”
Chairman Taylor couldn’t hide his admiration.
“How on earth did you come up with all this?”
“I spent days and nights thinking about how Blackwood could grow and develop.”
Of course, I hadn’t actually invented it myself. Blackwood would later partner with ZWS and do exactly this. I knew the whole thing well because I had written reports on it obsessively back when I was working at DA Securities.
I looked at Chairman Taylor and asked, “What will you do?”
The answer was all but decided already.
The most heavily traded stock on the U.S. market lately was Blackwood International.
Buy orders and sell orders slammed into each other so hard that the stock price swung by ten percent a day. Short interest also hit an all-time high.
IT experts and analysts alike predicted the issue couldn’t possibly be resolved within three days.
And then, at last, the promised third day arrived.
But still, there was no announcement.
The stock slid below $150 again, and short volume soared.
Some media outlets even warned that if the ransomware crisis dragged on, the share price could plunge below $100.
Anyone who saw those headlines reacted with utter disbelief.
Ransomware attacks by hacker groups were, to put it mildly, the nightmare every company feared. And Great Net was one of the most notorious groups of them all.
Yet they had traced the infection route and succeeded in arresting Great Net’s members!
That was an achievement even the FBI, NSA, and Cyber Command had failed to pull off after more than a year of investigation. And Snow Crash had solved it the moment it got involved.
The stock market reacted instantly.
The falling share price shot straight up the moment the articles came out. Even the people who had been skeptical at first could no longer deny it once the Blackwood hotels reopened for business.
The stock had fallen from $237 to $120, but once the crisis was resolved, it recovered to around $230.
Since the only thing that changed was that the stock had fallen and then climbed back up, anyone who had simply held on to their shares would have treated it as nothing more than an episode.
But for the investors who had shorted it over those few days, the situation was completely different.
The higher the stock rose, the larger their losses became, and the firms that couldn’t meet their margin calls scrambled to close their positions one after another.
Michael Preston panicked.
He had believed there was no way the issue could be resolved within three days no matter what anyone did, and so he had actually increased his short position even more.
Instead, something he had never anticipated had happened.
No way—they actually pulled it off.
His brother had been right: if anyone could do it, it might be Sid Lucas. But Michael had ignored that warning anyway.
Shark Management went into emergency mode.
“We’re getting complaint calls nonstop.”
“The investors are demanding an explanation. What should we tell them?”
Michael forced himself to calm down and assessed the situation coldly. Stocks tended to rise harder when they rose, and fall harder when they fell.
Since the short position had ballooned nearly twentyfold, they had no choice but to buy shares to cover it.
In other words, short covering.
With the bad news cleared up and buying pressure flooding in on top of it, the price had simply surged for a while.
Right now everyone’s focused on the crisis resolution, but that mood won’t last. Give it a little time and the atmosphere will change.
The losses from the shutdown and the penalties for breach of contract would hit this quarter’s books, and the whole crisis would likely put the brakes on Blackwood’s digital transformation as well.
But he didn’t have the luxury of waiting for any of that.
“Find me a way to drag the stock down, no matter what.”
Then one employee spoke up.
“What if we spread a rumor that customer personal information may have leaked?”
“Didn’t we say there was no data breach?”
“That’s only the company’s claim. If a convincing-looking file starts circulating somewhere, who’s going to believe a denial?”
There is a saying about proving the devil.
It’s easy to prove the devil exists. You just have to show it. But proving the devil doesn’t exist is impossible, no matter what you do.
Even if no one has seen him, you can never completely rule out the possibility that he’s out there somewhere.
In the same way, you can prove that customer data was leaked, but proving that it wasn’t is nearly impossible.
The reason the stock had risen in the first place was trust—trust that Blackwood had protected customer personal information even in the worst possible crisis.
But if that trust collapsed?
The stock would crater again.
It was a tactic I ordinarily wouldn’t have used, but this was no time to be picky.
And yet…
Before he could even make a move, a new announcement rocked the market.