Schedule 13D: The Activist Facade
But it wasn't a declaration of war. Schedule 13D. In Korean, it's called a 13D filing.
Basically, a filing is a system where companies disclose their management or financial status to the public. It's like making information transparent in the market so individual investors can have a fair shot too.
But a 13D filing is a different story.
"A 13D is actually a system designed to protect the company."
If you think back to the stock concepts I explained before, it'll be easy to understand. Stocks are essentially the company's ownership sliced into tiny pieces. Which means anyone who buys shares is an owner of the company. That's why shareholders are called owners in English.
Now, let's entertain a little hypothetical here.
'What if someone could quietly buy up shares without anyone noticing and end up owning everything?'
The answer's simple. The company would become that person's property without a peep from anyone.
"Of course, in reality, the odds of that happening are a solid zero percent."
Buying that much stock would send the price skyrocketing, right? Then it'd be impossible to keep buying at those inflated levels. And even if you had the cash, it's physically impossible.
"Plus, not all of a company's shares are even available on the open market to begin with."
For small- and mid-cap stocks, institutions, early investors, and other funds usually hold the majority. The shares actually floating around on the market are just a fraction. Having money doesn't mean you can buy as many shares as you want.
'But you don't need 100% to pull it off.'
Theoretically, over 50% gives you total control. As long as you have more than 50%, even if every other shareholder teamed up against you, you'd still come out on top. In practice, you don't even need 50%. Convince the institutions with a much smaller stake, and you can seize control. And the folks who take over management like this, tweak operations to boost value, and cash out? They're called activist funds.
[Catalyst Value Partners]
Yeah, assholes like these.
You might ask, "Isn't boosting a company's value a good thing?" Sure, on the surface, creating profit by improving corporate value sounds noble and honest. Like fixing companies that are basically begging for disaster with their shitty management.
But the problem is, not all activist funds are in it to raise the company's "pure value."
"Of course, they'll shout about management improvements on the surface."
All activist funds whisper sweet nothings about how fixing operations will boost profitability and drive up the stock price. But their real intentions? A bit different. There's a much faster, surer way to make bank. Diligently meddling in management for years, consulting to squeeze out profits? That's boring and pretentious. Takes too damn long.
'And funds aren't known for their patience anyway.'
Increase dividends! Sell off useless divisions! Return cash to shareholders! On the surface, their demands sound plausible. Hell, even tempting. From a shareholder's perspective, more dividends and cash handouts? Bliss.
Shareholders who get that sweet candy will cheer on the activist fund like crazy.
Who the hell wouldn't love instant cash in their pocket?
But here's the thing. Companies aren't magic money sticks that spit out cash on command. And CEOs aren't idiots either. ...Well, except for outliers like Han Siul. But companies don't just shower shareholders with money for a reason.
"You think they don't know bumping dividends and handing out cash would make shareholders happy?"
They know damn well, but they don't do it anyway. Simple reason: Companies need cash to run their business. No business running, no revenue. No revenue without cash. Dump all the cash on shareholders, and then what? You're screwed.
"It's like gutting the golden goose."
Activist funds demand dividend hikes. Dividends mean handing out profits as cash to shareholders instead of reinvesting. Sure, reasonable dividends are healthy—rewards investors, attracts more capital. But the hikes activists demand? Way beyond reasonable.
'Most of the time, they drain damn near every penny the company's hoarded.'
R&D funds, new investments, cash reserves for downturns... They're selling the future for the present. All that's left? Short-term dividend yield spikes. Shareholders gobble up the candy in front of them like sparrows chasing bait, oblivious to the trap.
"Whoa, dividends exploded."
"Just hold this and money rolls in—why wouldn't you buy?"
And right when the stock's pumped enough? The activists slip out quietly amid the party. The futureless company staggers, then crashes.
"Well, that's the old-school style, anyway."
One thing's certain: Regular folks get screwed in the end. Company tanks? Layoffs hit, jobs vanish, savings evaporate in the plunge.
That's why 13D filings exist. Cross 5% ownership? Disclose within 10 days where the money came from and why you're accumulating. Like a declaration of war under international law before battle.
"So yeah, it's like declaring war... but kinda ambiguous."
I scrolled down slowly.
[Ownership: 5.03%]
Spot on for when activists kick off an assault. Looks like a standard activist fund at first glance... but...
"My instincts never miss."
One more scroll, and the 13D details popped up. I wheeled past the familiar dividend promises.
[We intend to engage with management to improve revenue model and operational reliability.]
Boil down the English: Improve revenue model, boost reliability. Standard crowd-pleasers.
"Something's off."
Where? No hint of their greed anywhere. Normal activists demand board changes, strategy overhauls. They're here to make money, right? Catalyst's 13D? Nothing.
"...It's too empty."
The more I dug into Shopity on other tabs, the weirder it got.
[Shopity:] Virtual e-commerce platform riding the recent SNS wave...
[Market Cap:] ~4 trillion KRW
[Stock Price:] 49,892 KRW
[Issued Shares:] ~80 million shares
5% of 80 million shares? Catalyst holds about 4 million.
"Way short for a control battle."
Next, the order book. Short interest data filled the screen: 16 million shares out of 80 million. 20%.
"...Pretty high."
But not conclusive. Shorts aren't rare here. Normal attack level. Now, the option chain.
"Nngh. Feels like something's brewing."
Nothing jumped out at first—maybe my senses were rusty? Then, abnormal volume at the 40,000 strike. 20% below current price. Why the pile-up?
[Volume: 81,000 contracts]
One option = 100 shares. 81,000 contracts = 8.1 million shares. Shorts at 12.8 million, options 8.1 million. Total 20.9 million... Over 25% of float. Big player alert.
"One more to go...!"
22-Year-Old-Dropout-Unemployed-Seria's final shot: short balance (securities lending outstanding).
Short balance shows borrowed shares available for potential shorts. It'd spiked massively lately.
"Fuck, why so much?"
[Short Balance: 18,700,000 shares]
The increase mattered most. Recent borrowing screamed short intent.
[Short Balance Increase: ~10 million shares]
"...100% confirmed."
Total shorts: ~30.9 million shares. Nearing 40% of 80 million. Massive hidden positions everywhere. Calculating the value, Catalyst's 13D flashed in my mind—couldn't help but laugh.
"Haha. 'Improve revenue model'? Bullshit."
Cursor hovered over the filing again. 5% stake, pious talk of improvements... But the market hid a short avalanche that said otherwise.
"No clue where they got the cash, but..."
One thing was crystal: These fuckers didn't come to fix shit.
"Heh heh heh..."
Maybe 'cause it felt like my past life? That low, familiar chuckle slipped out.
"You came to kill the stock price from the start, didn't you?"