Cobalt Gate (2)
Min Hong-soo filed his report to the head of the Economic Affairs desk as soon as he got back.
Lee Yong-min skimmed through the material Min had organized and asked, “So KNC International was the work of a market-rigging crew.”
“Yes, sir. After a quick check, it turned out this place called the International Resource Exploration Institute didn’t even exist. I also contacted the geological society, and the Dutch professor who supposedly wrote the report isn’t on their roster. As for the claim that they acquired the mine, it looks like they only secured a mining concession for a set period. They don’t seem to have had any intention of actually digging anything up.”
“How did you figure that out?”
“I verified it. They hadn’t ordered any mining equipment, and they hadn’t even done a geological survey. And when I asked three cobalt processing firms, every single one said they’d never heard of it.”
“Then what about the Foreign Ministry’s public announcement?”
“Honestly, I don’t know.”
“Hmm. So they got played too?”
Lee Yong-min went over the material again.
The Foreign Ministry had kept issuing press releases, and the media had written up the story without much suspicion. But if all of this had been an operation to manipulate the stock price?
“Anything else of note?”
“No, sir, not really.”
“If you handle this right, it could be a scoop. Write it up.”
“Understood.”
Min Hong-soo deliberately left out the fact that Vice Minister Jeong Hyeon-cheol was involved.
If they learned that someone at the heart of the current administration was tied to it, they would undoubtedly order him to verify the facts before publishing.
By then, the people behind it would catch on, wipe the evidence, and dump their holdings at the same time.
And there might even be pressure from above to kill the article entirely.
He was the kind of man who couldn’t rest unless he wrote the stories he wanted to write.
Min Hong-soo made up his mind.
I’ll publish it first. I can ask permission afterward.
Forgiveness was easier than permission.
* * *
Every time I looked at Kang Seon-woo, Park Geon-hwi felt sick to his stomach.
He’d been born into a comfortable family and had never really worried about money as a child. He wasn’t born with a silver spoon, exactly, but he figured he’d at least had a silver spoon-adjacent upbringing.
He’d graduated from a good university, landed a good job, and even now he was in a better position than most people.
And yet the guy he’d thought was nothing special had struck gold in just a few days.
He bought in with loans and credit, and it’s already gone up more than five times. So how much did he make? What, did he pull in over a billion won?
With the Foreign Ministry having officially released a statement, this was no longer some simple rumor. It was much more likely to be real.
Panicked, Park Geon-hwi called his cousin, who worked at Mirae Investment Securities.
“Hyung! What the hell is going on here?”
[I don’t know either. But if even the Foreign Ministry is getting involved, this might actually be real.]
“What!?”
[With a catalyst this strong, you’ve got to figure this could run another three or four times from here.]
“R-really?”
If the cobalt mine was real, then maybe the stock’s real climb was only just beginning.
The chance to make money was to ride that wave.
After selling his Yeoseong Electronics shares, he bought roughly 100 million won worth of KNC International at 20,000 won apiece. Even that day, it was already up 10 percent.
But to his astonishment, the moment his purchase was complete, the price shot straight to the upper limit. In an instant, 100 million became 120 million.
Instead of feeling happy, he felt regret.
Damn it! I should’ve bought more.
He couldn’t hold back any longer.
Park Geon-hwi sold everything he had and even took out a margin loan to go all in.
He even took a day off just to stare at the stock. Fortunately, the price kept climbing.
When a few reporters and analysts started raising questions, the Foreign Ministry issued multiple press releases.
KNC International submitted a comprehensive report, including reserve estimates, to the Congolese government in accordance with the development agreement. The Congolese government cross-checked the exploration process and results and confirmed that KNC International had been granted exclusive development rights.
Chairman Cheon Deok-yu spoke to the press with grand ambitions.
“We plan to begin cobalt extraction within the year. We also intend to establish KNC Battery, manufacture batteries in-house, and supply them to leading automakers such as BMW Group and Volkswagen Group. KNC International will go beyond mine development and be reborn as a comprehensive energy company that will lead the Republic of Korea.”
The announcement sent shareholders into a frenzy.
Park Geon-hwi actively posted and commented, sharing his joy with the other shareholders.
Every time he looked at his swelling balance, he felt happier by the day.
I’m the idiot for only buying blue chips because I thought I was a long-term investor. I should’ve done this from the start.
Life and stocks both came down to one big hit, didn’t they?
Let’s just take it to 50,000 won. Once it gets there, I’ll sell everything and get out!
Park Geon-hwi gathered all his strength and shouted, “All right! Let’s go!”
* * *
After meeting with Reporter Min Hong-soo and passing along the information, I sold the stock immediately. You’d think nobody in their right mind would buy this garbage at that price, but it sold easily at the market open.
After dumping the whole position at an average price of 36,300 won, I let out a breath of relief.
Even after subtracting the 810.26 million won I’d borrowed through margin trading and the interest, I still had about 13.05 billion won sitting in the account.
When Seon-woo got home from work and checked the balance, he practically ran around the apartment in every direction, shouting.
“Whoa! This is real? This actually happened?”
I said calmly, “Stop running. You’ll get us yelled at by the people downstairs.”
That was because I’d already gone sprinting around in the parking lot below earlier.
“No, seriously, money can be made this easily?”
“Seems that way.”
I tried to act calm, but I was just as stunned.
My 500 million won had turned into 13 billion. I’d made more than twenty times my money.
I’d known this would happen before I invested, but now that the money was actually in my hands, it still felt unreal.
If you wanted to make this much from a salary, even a lifetime of work wouldn’t be enough. But with investing, it was possible.
This confirmed it for me.
When you know the future, making money is easy. The real question is how much you can make.
Seon-woo was still half out of his mind.
“Thirteen billion won... Thirteen billion in my account.”
“Get a grip, man.”
After a while, Seon-woo finally came back to his senses and said, “But it’s still going up. Did you sell too early?”
He wasn’t wrong. Even after I sold, the stock climbed higher and closed at 38,200 won.
From what I remembered, the price had once come close to 40,000 won before it started sliding, right when Cheon Deok-yu, the major shareholder, began selling.
Even then, it didn’t crash immediately. It kept trading above 30,000 won for a while.
In that gap, Cheon Deok-yu unloaded 80 percent of his holdings.
But this time would be different.
“It’s about time this ended.”
* * *
This operation had been carefully designed by Cheon Deok-yu, using the experience he’d supposedly gained from years of overseas business.
First, he picked a failing KOSDAQ company and used a reverse merger to list it through the back door. Then he moved on to the task of driving up the stock price.
In the market, it looked like trading volume was rising, but in reality it was wash trading, with foreign accounts used to make it look as though overseas investors were piling in.
One thing had been strange, though: the price had risen faster than expected.
“If the price is going up, the small investors must be swarming in.”
The truth was that pushing up a stock price was simple.
The more you bought a thinly traded stock, the higher the price climbed. The problem was that the reverse happened when it was time to sell.
Then the more you sold, the lower the price went.
To make people keep buying at the inflated price, there had to be a believable reason.
That was why he’d come up with the grand story of overseas resource exploration.
Resource exploration was like a lottery ticket.
The odds were tiny, but if it worked, the payoff could be enormous. If a closed mine turned up gold or a high-value mineral like diamonds, it was the financial equivalent of hitting the jackpot.
Of course, that almost never happened in real life.
But while making it happen was difficult, making people believe it had happened was easy.
He registered a plausible-looking institute, hired someone with a professor’s title, and paid him to write the report.
He brought in analysts and reporters, slipped them cash and gift certificates, and had them write plausible-sounding reports and articles.
In the end, there was no way to verify the truth. Who would actually come all the way to the Congo and inspect a cobalt mine in person?
But there was a clear limit to how far a rumor alone could carry a stock.
That was where the Foreign Ministry came in.
Vice Minister Jeong Hyeon-cheol, who had received stock as a bribe, performed his role faithfully. The Foreign Ministry published KNC International’s report as official material.
It was unprecedented for the Foreign Ministry to cite a private company’s report. When reporters asked about it, the ministry even issued an official press release.
Once the Foreign Ministry confirmed that the cobalt mine was real, the stock price began climbing straight up. A share that had been worth 1,500 won just last month had now blown past 30,000 won.
Sorted by market cap, the stock that had once been buried somewhere down in the weeds was now standing proudly inside the top hundred on KOSDAQ.
People were even talking about moving it to KOSPI.
The mood couldn’t have been better.
The moment my years of effort finally bear fruit has arrived.
As the major shareholder of KNC International, he held 28.7 percent of the company. At the current price, that was worth well over 200 billion won.
But selling it at market price was not easy.
Normally, a major shareholder’s sale, especially a chairman’s, was treated as bad news. When someone who knew the company’s internal condition sold shares, it meant either something was wrong or the stock was overvalued.
So the moment his sale became known, the price would collapse.
To prevent that, Cheon Deok-yu had already started playing the media game.
“I’ll invest the funds raised through the share sale into developing our own batteries. The sale is solely to secure investment capital!”
Even if the cobalt mine was real, battery development was an entirely different field.
It was the sort of project that even conglomerates poured trillions of won into and still couldn’t be sure of, but investors didn’t question his words at all, and the reporters who’d been entertained simply took him at face value and wrote it down.
But lies like that couldn’t last forever. So he had to sell as much as possible, as fast as possible, and take the money while he still could.
With trading volume surging now, this was the perfect chance to unload.
I should probably tell Vice Minister Jeong Hyeon-cheol soon too.
Just as he was about to begin the real selling spree, however...
Something completely unexpected happened.