Chapter 26: Cobalt Gate (4)

Park Geon-hwi always thought he was smarter than others.

He had consistently made profits from stock investments so far, and this time would be no different.

Although his target price was 50,000 won, he planned to sell immediately if any problems arose. But problems did arise.

The moment a news article from JoongAng Economic News appeared.

Park Geon-hwi was so shocked that he let out a scream.

“Ah!”

When he worked at Mirae Investment Securities, he learned that you shouldn't catch a falling knife.

He immediately placed a sell order at the lower limit price. However, there were already over 5 million buy orders waiting.

It was impossible to sell before all these orders were filled.

But who would buy a manipulated stock at this price?

He immediately called his cousin who worked at Mirae Investment Securities.

“What’s going on? Is that article true?”

His cousin replied in a hurried voice.

[I don’t know. Right now, everyone is panicking and trying to sell. One of my clients invested over 1 billion won, and now it’s chaos.]

“But, but. You said it was true before.”

[Who would have known that the Deputy Minister of Foreign Affairs would be involved in the scheme? Ah! I’m going crazy.]

“Then...”

[It’s too chaotic right now. Let’s talk later. I’m hanging up.]

His cousin hung up unilaterally.

An hour passed without any transactions, and the market closed.

Park Geon-hwi couldn’t sleep that night.

‘Will the lower limit price be lifted tomorrow? I should place a sell order at the opening and sell immediately.’

But the next day also started and ended at the lower limit price, with no transactions.

He had to go to work, but it wasn’t a situation where he could leave the company.

Park Geon-hwi called the office and said,

“I’m not feeling well. I’ll take a few more days off.”

With bloodshot eyes from lack of sleep, he stared at the monitor.

He couldn’t regain his composure with the continuous lower limit prices.

The stock that opened at the lower limit price also closed at the lower limit price. On the chart, it was just a blue dot, not a red or green bar.

‘When will the lower limit price end?’

The next day was the same, and the day after that was the same. It felt like watching a blue staircase that kept going down forever.

Those who haven’t experienced a lower limit price don’t know how shocking and terrifying it is.

A stock that was 10,000 won becomes 7,000 won after one lower limit price. The next day, it becomes 4,900 won.

In just two trading days, more than half of the value is lost!

And after four times, more than 75% is lost.

A stock that had reached 38,000 won fell below 10,000 won in just four trading days. The profits he had made were gone in two days, and from then on, his principal started to erode.

Even if he wanted to cut his losses, it was impossible to trade as long as the lower limit price wasn’t lifted.

Each day felt like hell.

If only he could turn back time.

‘Why did I buy this garbage stock?’

Even though recent news articles were plentiful, he wouldn’t have bought it just because of them.

The reason he became interested was only one.

Because a guy named Kang Seon-woo invested all his assets and bought it. Seeing him make money made Park Geon-hwi envious, so he followed suit.

This was the result.

‘Damn! Why did I listen to that guy? If it weren’t for him, I wouldn’t have even looked at this stock.’

The only consolation was that he wasn’t the only one who lost.

‘Right. I’m not the only one who lost. Kang Seon-woo must have lost all his profits too.’

Fortunately, the lower limit price march stopped at 2,300 won. The lower limit price was lifted, and trading became active, with a surge in volume.

He could sell now.

But...

What was the point of cutting his losses now?

He wouldn’t recover even a tenth of his investment.

Tears streamed down his face from the sense of loss, regret, self-blame, and anger.

“Sob. My money... Give me back my money, you bastards. Sob!”

Even though he had lost all his assets, he still had to go to work.

Park Geon-hwi finally left his house after two weeks.

Upon arriving at the office, he first went to Development Team 3. He wanted to see how much Kang Seon-woo had lost.

Unlike Park Geon-hwi, who was emaciated from lack of food and sleep, Kang Seon-woo looked quite fine.

“Hey! I heard you were sick. Are you feeling better?”

Instead of answering, Park Geon-hwi asked his burning question.

“Are you okay, Seon-woo?”

“Yeah, what about me?”

Park Geon-hwi sneered inwardly.

‘Pretending, huh?’

Even if he acted like nothing was wrong, his insides must be as rotten as Park Geon-hwi’s.

“KNC International has been hitting the lower limit price every day. Haven’t you been hit by a short squeeze by now?”

Kang Seon-woo shook his head.

“I sold it all a long time ago.”

Park Geon-hwi was shocked.

“What, what? You sold it all?”

“Yeah.”

“Don’t lie. How could you sell when it kept hitting the lower limit price?”

“I sold it before it hit the lower limit price.”

“Ha... What a ridiculous story.”

Then, Cha Su-yeon, who was standing nearby, laughed and said,

“That’s right. Seon-woo’s friend sold it all at around 36,000 won. Thanks to that, I made a little profit too.”

Other employees chimed in.

“He even bought pizza for the entire development team to celebrate his profits.”

“But it started hitting the lower limit price the next day.”

“I was so surprised when I heard that.”

“His friend must be really good at stocks.”

“How did he sell like a ghost?”

Park Geon-hwi was in shock.

‘What? I lost all my assets, and this guy sold at the peak? Why me... Why do I have to suffer like this!’

Kang Seon-woo looked at Park Geon-hwi and asked,

“Hey, did you buy that stock?”

“No, I...”

“My friend said it will be delisted soon. If you have it, sell it immediately.”

“What, what are you saying?”

Kang Seon-woo had a genuinely worried expression.

“It might be upsetting to hear that your stock will be delisted, but I’m saying this for your own good, Geon-hwi. Take it to heart.”

At that moment, Park Geon-hwi felt like his stomach was being turned inside out.

Without realizing it, he grabbed Kang Seon-woo’s collar and shouted,

“Hey, you bastard! Who are you to say my stock will be delisted?”

* * *

[KNC International Stock Manipulation Case: A Corruption at the Government Level?]

(Excerpt) Known as the "Cobalt Gate," this incident was one of the many stock manipulation cases, showing how such schemes unfold in the stock market.

The shocking fact was that the Ministry of Foreign Affairs was also involved.

Deputy Minister Jung Hyun-chul played a leading role in the scheme, instructing the director of the Ministry of Foreign Affairs to issue a report and distribute press releases.

If the scheme had succeeded, he would have made an unjust profit of about 500 billion won. This indicates that the moral decay of public officials had gone too far...

If the connection between Chairman Cheon Deok-yu and Deputy Minister Jung Hyun-chul hadn’t been revealed, the investigation would have been superficial and the matter would have been swept under the rug.

However, the fact that Deputy Minister Jung Hyun-chul had received stocks in his wife’s name was confirmed, verifying the article.

When it was revealed that a large number of Ministry of Foreign Affairs employees had also been involved in the stock manipulation, public outrage boiled over.

-These guys are completely insane.

-We were paying taxes for these guys to be public servants?

-What kind of diplomacy do these speculators do?

-We hired them to do diplomacy, but they were speculating.

-What kind of country is this, where financial fraud keeps happening? It’s like a fraud republic.

-Haha, really. The Premus incident hasn’t even ended yet.

-Has the Financial Services Commission collapsed, you guys?

-Let’s execute them all.

-How much did they make while retail investors were crying?

-We only know about this because they got caught. How many more have they gotten away with?

-Damn, this is real. Unrefutable~

-We need to investigate all the accounts of the New Korea Party members!

-Let’s investigate all the accounts of the Blue House staff.

-They’re taking bribes in the form of stocks. The world has really improved.

-They’ll be taking bribes in cryptocurrency soon~

With the crime clearly established, Deputy Minister Jung Hyun-chul was arrested on an emergency basis.

Journalists bombarded him with questions as he stood at the prosecution’s photo line.

“When did you first meet Chairman Cheon Deok-yu?”

“Do you admit to receiving bribes and participating in the stock manipulation?”

“Did you give the orders yourself?”

“Do you have any words for the victims?”

Deputy Minister Jung Hyun-chul bowed deeply and said,

“I apologize to the citizens. I will cooperate fully with the investigation.”

Diplomatic officials who had joined the speculation based on insider information were also arrested one after another. Among them, one official who had a good sense of timing sold just before the plunge and made 30 billion won.

The Blue House was in shock.

The aftermath of the Premus incident, which had erupted early in the administration, had not yet subsided, and now there was a stock manipulation case involving the Ministry of Foreign Affairs.

The opposition party, Our People’s Party, launched a fierce attack.

“This is not a personal issue but a corruption at the government level. We need to investigate the Blue House and all ruling party members.”

The New Korea Party countered,

“Why only us? If you want to investigate, let’s do it together.”

The opposition demanded an apology from the president, leading to a chaotic situation in the National Assembly.

In the end, Secretary-General Kim Han-soo took responsibility and resigned, and President Oh Young-hwan immediately accepted it.

* * *

I smiled bitterly as I watched the news.

To what extent did they get involved in this speculation?

It will probably end with them cutting their losses here. I don’t know any more than this, so I can’t provide any further information.

Most manipulated stocks only reveal their true nature after they have plummeted. By then, the forces behind the manipulation have already made their money and left.

It was highly unusual for the true nature of the manipulation to be revealed before the forces had made a profit.

It was reported that those who had participated in the manipulation suffered significant losses. Ministry of Foreign Affairs employees and analysts lost anywhere from a few million to several billion won.

This was thanks to JoongAng Economic News publishing the article quickly.

Journalist Min Hong-su did a much better job than I expected.

I’m worried he might get fired for this, but... he probably would have quit anyway, so it doesn’t matter.

If I get more information later, I’ll push it hard.

While I was thinking this, Seon-woo raised his hand and asked,

“I have one question.”

“Go ahead.”

“The cobalt mine was fake, and the stock manipulation was revealed.”

“Yeah.”

“So, the company has no value at all.”

“Right.”

“Then, why are people still buying the stock?”

“...”

Surprisingly, even as related individuals were being investigated and arrested, the stock was still being actively traded.

The stock, which had fallen to 860 won, rebounded and broke 1,000 won today.

Seon-woo was amazed.

“Wow! An 18% increase, is that real?”

“Well, even a dead cat will bounce if it falls from a high place.”

When a stock keeps plummeting, it will eventually bounce back at some point.

This is called a ‘dead cat bounce.’ The key point is that it’s ‘dead,’ not that it ‘bounces.’

What’s the point of a rebound if the company is already as good as bankrupt?

Still, with a stock that was once around 40,000 won now at 1,000 won, it seems cheap, so the trading volume has surged.

Of course, institutions and foreigners don’t touch such stocks. The only ones trading are retail investors.

It will probably be delisted in a few years, but that’s not our problem. We’ve already cashed out.