KNC International (3)
Noon.
Kang Seon-woo sat in the company cafeteria with the development team and picked at his lunch. Cha Su-yeon, seated beside him, watched him fidget with his chopsticks and asked, “Why aren’t you eating?”
“I don’t really have much of an appetite.”
He hadn’t even eaten breakfast, but he still didn’t feel hungry. Still, he had work to do in the afternoon, so he forced himself to eat. Then Park Geon-hwi came over with his tray and struck up a conversation.
“I saw it earlier. It was down more than 10 percent.”
“Yeah.”
He had lost his appetite the moment he saw that. Watching a stock sink like that was enough to make him feel full without eating a bite.
“I did a little analysis on the stock you bought, Seon-woo.”
Do you really have to?
Park Geon-hwi spoke loudly enough for Cha Su-yeon and the other employees to hear.
“Its PER and PBR are a complete mess. ROE is not even worth mentioning. These days people even use things like PDR instead of the old metrics like PER and PBR, but the sector itself just doesn’t deserve much of a multiple. Leveraging up to take a long position in a stock like that is extremely dangerous. The most important thing in investing is risk management.”
“I see.”
Kang Seon-woo nodded absently.
He could’ve just called it a junk stock and been done with it. Instead he’s dragging out all this jargon like he’s really done something.
Park Geon-hwi put on a concerned expression and kept going.
“But are you really sure this is okay? You even borrowed on margin to buy it, and now it’s still plunging.”
At that, the other employees all looked startled.
“Really?”
“What do you mean?”
“Is it that dangerous?”
Park Geon-hwi gave the kind of advice you’d expect from someone preaching from a pulpit.
“One of the maxims of stock investing is never borrow money to invest. Margin trading, especially, is practically a shortcut to hell. If the share price falls and your collateral value drops, the brokerage will call you first and tell you to top up your margin. If you can’t, they’ll trigger a forced liquidation right away. Then your account gets wiped out.”
The other employees stared at him in alarm.
“Seriously?”
“So the account really goes to zero?”
Park Geon-hwi nodded.
“If it ended there, that would actually be the lucky case. You know what the worst part is? If forced selling drives the stock down even further, you can end up owing even more money. I saw that happen sometimes when I worked at Future Investment Securities.”
Just hearing that made his already nonexistent appetite vanish completely.
Whether he knew it or not, Park Geon-hwi kept rambling on about the dangers of margin trading.
Since the topic was stocks, everyone had stopped eating to listen.
One employee asked with obvious curiosity, “But what stock is it?”
“Hmm. I heard it was something starting with K. Seon-woo, what was the name of that stock again?”
Everyone turned to look at Kang Seon-woo.
He knows and is asking on purpose, doesn’t he?
With no other choice, Kang Seon-woo answered, “KNC International.”
“Oh, right! That was the company doing overseas resource business, wasn’t it? Sounds impressive when you say they’re doing global business, but in reality it’s full of risk. A lot of people get conned by local companies.”
As they listened, another employee asked, “Couldn’t it bounce back after dropping for a few days?”
Park Geon-hwi laughed loudly on purpose.
“Ha! From what I’ve analyzed, this isn’t a simple correction. It’s probably the beginning of a collapse. A stock that rises for no reason eventually falls—that’s normal. More precisely, it’s just returning to where it should’ve been in the first place. It wouldn’t be strange if it hit the daily limit-down soon. Selling now is the best way to cut your losses.”
“Sell it now?”
At Kang Seon-woo’s question, Park Geon-hwi nodded decisively.
“Yes. In stock investing, the decisive difference between a pro and an amateur is whether they can cut losses. Pros aren’t afraid to sell when they’re wrong, but amateurs always miss the timing because they’re scared of locking in a loss. It’s all because they keep thinking about getting back to even. If it were me, I’d dump the whole thing right now and never look at a stock like KNC International again. Losses can always be made up somewhere else. I’ve said this many times, but long-term investing in blue chips gives the best returns. If it were me, I’d rather put the money into top-cap names like Yuseong Electronics, LK Telecom, or GL Chemical—”
Park Geon-hwi kept on blathering about stocks, and Kang Seon-woo’s expression grew darker and darker.
Should I tell Miru to sell now?
He really ought to call and talk it through seriously.
Just as he was thinking that, one of the female employees who had been checking her phone suddenly cried out, shocked. “Oh! T-this is….”
“What is it?”
Everyone looked at her with startled expressions.
“The stock Seon-woo bought.”
“What about it?”
Did it crash again? No way it got suspended, right?
The employee looked at him and said, “It just hit the daily upper limit.”
“……What?”
Park Geon-hwi, hearing that, let out a snort.
“You must’ve misread it. It was plunging more than 10 percent just a little while ago.”
“No, really. It’s KNC International.”
She held out her phone as if to prove it. The others took one look and gasped.
“Whoa! It really is.”
“Oh, wow. Limit-up!”
“Lucky you, Seon-woo!”
“How much did you say you bought?”
“That’s a huge win!”
Park Geon-hwi looked flustered. “Uh, wh-why is it really—”
But the one most shocked of all was the person who had actually made the investment.
Kang Seon-woo checked his account and shouted in disbelief, “Huh? Why is my stock like this?”
For a second, he wondered if he was seeing things and rubbed his eyes.
But when he looked again, it was still at the daily upper limit.
The stock that had been down nearly 10 percent just moments ago had suddenly reversed all the way to limit-up.
In terms of price movement, that was a swing of more than 40 percent!
Not only had it erased his losses in an instant, it had even pushed him more than 10 percent into profit. He was thrilled, but confused too.
Why on earth is it going up?
He didn’t know the reason, but whatever it was, it had hit limit-up.
Kang Seon-woo threw both hands into the air and shouted, “Yes! Limit-up!”
Then he looked at Park Geon-hwi and asked, “So what was it you just said? Sell everything right away and never look at it again?”
The employees all turned to Park.
“Come to think of it, didn’t you say it’d hit limit-down?”
“I thought you told him to cut his losses.”
Park Geon-hwi was so flustered he couldn’t get the words out properly. “Ah, well, that’s….”
He had talked himself up like he knew everything, only for the exact opposite to happen.
This is ridiculous. Why the hell is this piece-of-trash stock hitting limit-up?
Park Geon-hwi searched for it on his phone. Looking more closely, he found a disclosure that hadn’t been there earlier.
“Huh? A cobalt mine?”
As the disclosure and the articles went live, the stock board went into an uproar.
The share price, which had been slipping a little, shot up to limit-up in an instant.
Hundreds of thousands of shares piled up on the buy side at the upper limit, but almost no trading took place. In other words, it was the kind of situation where you might want to buy, but couldn’t.
As I was reading through the article and the board posts, the phone in the company rang almost immediately.
“It hit limit-up today.”
“I told you there’d be good news.”
“This was it?”
“Yeah.”
His voice sounded thrilled. Well, of course he would be. A stock that had been falling suddenly exploding upward was enough to make anyone happy.
Honestly, I had shouted and even jumped around for a bit myself a moment ago.
“When are you selling?”
“Sell? Why would I sell? This is just the beginning.”
“Really? I’ve got to get back to work now, so I’ll call you later.”
“Don’t call me—just work. We’ll talk after you get off.”
“Got it.”