The Magician’s Memorial - Chapter 395



Only Krnovel

395. Counterattack (5)

A quiet office.

Warren Buffett took a refreshing drink of the remaining cola and continued speaking.

“The idea is to wage a very large war against the short-selling forces.”

“It would be too much to call it a war. Just look at it as a little fight. It will be a very interesting fight that is rarely seen in the stock market.”

“Hmm, I’m not very interested in your fight against short sellers. What’s important to me is the oil industry. Is this helpful to the development of the oil industry?”

It was an unexpected question.

Warren Buffett was a true investor, and his only interest was the development of the stocks he invested in.

“I invested a huge amount of money to develop the oil industry, and it even led to the discovery of a large-scale oil field in Guyana. In order to achieve more results, the short sellers must be defeated now.”

“Can you achieve more?”

“That’s right. When I was in school, my teacher told me that there were less than 30 years left until oil was depleted, but now it has increased to 50 years. The oil industry is not over yet.”

It was Warren Buffett, nodding his head as if he agreed with my opinion.

However, he did not hold my hand easily and asked another question.

“Don’t you think that the electric vehicle market that Taewoo is leading will be harmful to the oil industry?”

“In some ways, it can be seen as an overlapping industry, but electricity production also ultimately uses oil. And oil use is increasing significantly in many regions such as China, India, and Africa. Even if electric vehicles become fully established, oil use will continue to increase. On the contrary, it is bound to increase.”

The words poured out without taking a single breath.

Warren Buffett must have liked such passion and finally reached out.

“I will support the fight against the short sellers, but you must live up to your promise with the stocks I have lent you.”

“I will definitely make it happen.”

“I will talk to the Korean branch manager and the contract can be drawn up there.”

“thank you.”

“I just have to get up and take a look. I think there are quite a few undervalued companies in Korea, so I’m going to take this opportunity to take a look.”

Warren Buffett went out again with a benevolent smile.

I saw him off to the entrance of the financial tower, and as he drove away, a CEO who was waiting came close to me and asked about the situation.

“What happened?”

“Go to Berkshire’s Korean branch and sign a contract. We will lease Berkshire’s shares of Hess.”

“Are they joining hands with Berkshire? The short sellers are going to be very upset.”

“If news came out that they had joined hands with Warren Buffett, the stock price would go crazy.”

In fact, there was no need to join hands with Warren Buffett.

However, it was used because it was a very good way to pressure short sellers.

If the original plan was to cut down with a single sword, the addition of Berkshire made it possible to upgrade to a more brutal method of slowly suffocating.

“We will release information to American media outlets at the same time as we sign the contract.”

“Now all I have to do is meet the American ambassador. Was it tomorrow?”

“I’ve made a lunch appointment at Captain Kang’s restaurant tomorrow.”

In order to completely suffocate the short sellers, help from the U.S. government was needed.

To be precise, acquiescence or indifference, not exactly help, was enough, and therefore consultation with the U.S. ambassador was necessary.

* * *

I have now developed quite a close relationship with U.S. Ambassador Kang Jun-yong.

As soon as we met at Captain Kang’s restaurant, we even joked and said hello.

“Chairman Kim, are you here? Aren’t you fighting too hard against the short-selling forces these days? I feel like quitting my position as ambassador and joining the fight, but I don’t have the money, so I’m holding back.”

“Ambassador, you have to do a big job, but you need to stay away from the dirty smell of money. Why should you have the smell of money on your clothes for no reason?”

“Hehehe, isn’t that why I settled in Washington instead of going to Wall Street?”

Enjoyed lunch with jokes.

When the meal was over, Ambassador Kang Jun-yong spoke first.

“Now that you’ve had enough of the moxibustion, tell me. I’m dying to know why you asked to see me.”

“We are trying to properly shake off the short-sellers. However, the method is so extreme that it requires approval from the U.S. government.”

“Aren’t you planning on hiring a gang or committing a terrorist act? As long as it’s not like that, it’s fine. If it’s a fight using financial engineering, I don’t think the White House will care much.”

Physical conflict was not the only radical method.

There were quite a few radical methods in terms of financial engineering, and I tried to use methods that were even more radical than what Ambassador Kang Jun-yong thought.

“It’s not illegal, but we’re trying to take some shortcuts. If the SEC (Securities and Exchange Commission) takes issue with it, it could be a problem.”

“What kind of method are you trying to use that makes you do this?”

“We want to delist Hess.”

Delisting.

It was literally an act of having one’s qualifications revoked from the stock market.

In most cases, companies on the verge of bankruptcy or companies that committed serious corruption would be delisted.

“I heard that Hess’ stock price has recovered a lot. But why are you suddenly talking about delisting?”

“Undervalued companies often delist and then re-list in order to increase their value. Hess is also currently very undervalued, so we plan to delist it and then list it again when it starts producing oil from the Guyana oil field. ”

Voluntary delisting.

There have been quite a few cases where hedge funds purchased companies and then delisted them.

This is because when a company’s value is raised and then it is listed again, its stock price is often set much higher than before.

“If more than 95% of the shares are held, delisting is the company’s management’s choice. But I don’t know why they want to delist. How can the delisting card be used in the fight against short sellers?”

“In the case of voluntary delisting, a tender offer can be made at a price higher than the market price. Usually, a tender offer is made at a premium of about 50%, but I plan to make a tender offer with a 100% premium.”

Which shareholder would welcome delisting?

Therefore, a tender offer is carried out at a premium.

And the moment the tender offer was conducted, the stock price was bound to rise along with the tender offer price.

“In order to voluntarily delist, 95% of the shares must be collected, so a public offer procedure must be followed. Haha, if the stock price suddenly rises close to 100%, the short sellers will be very embarrassed.”

“The loss will be double what it is now. But I have no intention of being satisfied with double the amount.”

“Is there another way? Since the delisting card is taken out, there can be no other cards, right?”

It is not wrong to say that there is no other way.

If so, just repeat the same method.

“If we cannot secure 95% of the shares in the first tender offer, wouldn’t we be able to proceed with the second tender offer? If we proceed with the fifth tender offer, the stock price will rise by nearly 500%.”

“······So you said you need help from the U.S. government. It’s definitely not illegal, but it could be a problem.”

Who would decide to delist in order to crush short selling forces?

In normal cases, they would be defeated by short sellers and have no choice but to choose delisting.

But Hess was different. Because there is a parent company called Taewoo Group, which is overflowing with money, they were able to use a strategy of literally printing money.

“We can use this opportunity to completely crush the short-selling forces. It is also a good opportunity to make up for the mistakes of the Lehman incident.”

“There are many people who take issue with the moral hazard of financial companies.”

Very few financial people were punished for the Lehman incident.

It was an incident that shook not only the U.S. but also the global economy, but no financial company took responsibility.

The Obama administration’s approval ratings plummeted due to the issue of soft punishment.

“Wouldn’t it be very good news if the short selling power fell?”

“I will go to the United States myself and talk to VIPs and other officials.”

“Short selling is essential for financial development, but shouldn’t we get rid of short selling forces that try to profit by spreading fake news?”

In fact, cursing the short selling forces was like lying down and spitting.

I was the one who benefited the most from the oil war, and most of the profits were made through short selling.

Naeronambul or double standards.

If I did it, it could be seen as good short selling, and if someone else did it, it could be seen as bad short selling.

But in the end, the U.S. government had no choice but to take my side.

A force working to develop the U.S. oil industry.

And the force that seeks to bring down that force by selling it short.

From the U.S. perspective, wouldn’t it be natural to choose the former?

* * *

A few days later.

I got a call from David.

[boss! Approval from the U.S. government fell. The SEC (Securities and Exchange Commission) also decided not to get involved in anything related to Hess.]

“Approval came sooner than expected.”

[Isn’t the U.S. government investing an astronomical amount of money to revive the oil industry? But how hateful would it be for short sellers to try to ruin the oil industry? However, I can’t impose sanctions directly, but the boss says he will beat me instead, so I will pretend not to know.]

In fact, it wasn’t even approval.

It was not the US government’s help that was needed, but its acquiescence.

That’s why the U.S. government was able to respond so quickly.

“Then, let’s start with the first stage of the operation. Start by spreading the news that Berkshire bought Hess’ shares. And then spread the news that Hess’ shares were entrusted to Taewoo Group.”

[Warren Buffett’s supporters unconditionally buy any stock he buys. There is already a lot of demand, but the demand for Hess stock will likely increase even more.]

Is there anyone who doesn’t know Warren Buffett’s name?

In particular, I could see that there was no one who traded stocks who did not know his name.

Just because he had chosen Hess’s stock, the stock price was bound to rise much faster.

“And soon, we will send CEO Han to the United States. Please proceed with voluntary delisting and tender offer.”

[If you want to prepare in advance, you should get busy now.]

David hung up first.

David knew very well that he was the person who had to move the busiest to prepare for the delisting.

“I will go to the United States right away tomorrow. I have to take care of the financial engineering work, so I think it would be better to go to the United States as soon as possible.”

“It will be hard, but it will be fun.”

A CEO who was listening to the phone call with David.

He kept a smile on his face the entire time and looked like a child who couldn’t wait to play with a new toy.

Well, where would you get a toy like this?

This is because you can now play with the toy called the king of short selling with your own hands.

Of course, the most fun part was mine.

Even if a CEO is my closest associate, I can’t even hand over the highlights.