Chapter 81: A Fitting Price for Wisdom (1)

The Thomas Motors incident had a ripple effect on the entire startup industry.

Until then, startups had been vying to secure investment funds by touting their future value. As a result, the market was flooded with underperforming companies.

But this time, it really blew up.

Investment firms halted their planned investments and began to review the companies they had previously invested in.

Companies that had been surviving on investment funds without generating any profits began to collapse one after another as the investments dried up.

The startup industry reacted as if the inevitable had finally arrived. From now on, a genuine sorting of the wheat from the chaff would begin.

Rolf said, "Surely our company's value won't drop, right?"

"Quite the opposite, I think."

Kuloud is in a completely different situation from Thomas Motors.

Unlike Thomas Motors, which saw its stock price rise based on nothing but expectations without a solid revenue model, Kuloud is actually generating enormous profits.

Market liquidity doesn't just disappear all of a sudden.

Once the sorting is over, the value of companies deemed to be the "wheat" will rise even more.

Given that Alex was already weighing the timing of raising investments and going public, he was paying close attention to market trends.

His interest in this incident was heightened because he knew who was behind it.

He thought it was no longer necessary to pay attention, but...

"Who would have thought they would pull off something like this?"

"They must have made a lot of money."

Alex pondered deeply.

"How much profit did they really make from this investment?"

According to what was known, they bought put options and used CFD trading to leverage ten times their investment. This would be impossible unless they were certain the stock price would plummet.

"There's nothing to say but that they're impressive."

"Is this impressive? They just uncovered the fraud and exposed it."

Alex chuckled.

"Do you really think so?"

If it were really that easy, the market would be full of investors who made money through short selling. But while many people make money by buying stocks, few make money by selling them.

"It's like Columbus' egg."

Everything looks easy in hindsight. It's just that no one can do it when asked to.

Rolf nodded after hearing the explanation.

"Indeed. I heard your brother also suffered a loss this time?"

"That's right."

Shark Management's loss from this incident was approximately $1.3 billion as of now. While it's a huge amount, it's only a small part of their total assets. However, this is the first time Michael Preston's managed fund has seen a loss. In fact, he didn't even have a chance to make a proper move before suffering the loss.

The shock was so great that LPs even demanded a halt to investments in other hydrogen car companies.

Michael Preston must have suffered a significant blow to his pride.

Rolf asked with a smile, "Isn't this good for you?"

"It is."

He is the third son of the famous Preston financial dynasty. Everyone in the family is a competitor. Among them, Michael Preston was leading the way. Therefore, the more his brother fails, the higher the chance he will inherit the family business.

"You're right, David Rockwood is impressive. I thought he was a has-been when I first heard about him."

Everyone was talking about David Rockwood. But for some reason, Alex kept thinking about the Korean who was with him.

"His name was Han Miru, right?"

Rolf continued, "I'm still angry about giving 15% of the shares to Seed. I was swayed by a smooth talker and ended up losing a lot of money."

They realized that Seed Lucas was a key figure at Kuloud and had noticed the problems with Thomas Motors.

They quickly identified the weaknesses of their opponents and struck unexpectedly. This is a common tactic used by hedge funds.

Every company has an Achilles' heel, but it's not easy for outsiders to identify it.

If it happened once, it could be a coincidence, but twice is not.

That means they have the skills.

'But whose skills are they, really?'

Alex recalled the two people who had visited the company before. They had proposed to acquire Kuloud and, when rejected, tried to poach Seed Lucas but failed.

Then, out of nowhere, they appeared as the main players in the Thomas Motors incident, shaking up Wall Street.

What they gained from this incident was not just money but also reputation. After all, they caused a 90% drop in the stock price of a company that was in the spotlight with a single report, proving that all other investors were wrong.

Reputation in the financial world has immense power. Everyone will pay attention to what reports David Rockwood writes and where he invests in the future.

At that moment, Alex noticed something odd.

Rolf, seeing his expression, asked curiously, "What's wrong?"

After a moment, Alex spoke.

"Was their real goal really to poach Seed?"

"What do you mean?"

Alex organized his thoughts.

"They knew Seed was a key talent at Kuloud. That's why they tried to poach him, even offering to set up a company for him."

"But they failed, didn't they?"

They had tied Seed to Kuloud with various clauses. It would be impossible to take him away now.

In the end, Continuum Capital gained nothing.

'How could such meticulous people fail?'

Was there another purpose?

Rolf said, "Do you really need to worry about it? You won't see them again, right?"

After thinking for a moment, Alex nodded.

"You're right."

Just as he was trying to shake off an ominous feeling, the intercom rang.

[There's a visitor.]

Rolf asked, "Suddenly? Who is it?"

[They're from Continuum Capital.]

The two of them looked at each other.

* * *

We set off for Kuloud after hearing from Seed that Alex and Rolf were at the company.

I told an employee in the lobby, "I'm here to see Alex Preston and Rolf Butch."

"Did you make an appointment?"

"No, I didn't. I have something important to discuss, so could you please let them know?"

We waited for a moment.

David asked, "What if they refuse to meet us?"

"Then we'll at least try to meet Seed."

Wouldn't they agree to meet us just to prevent us from seeing Seed?

We were led inside without needing to do that. This floor was completely separate from the employees, different from the meeting room we had visited before.

Soon, Alex and Rolf, the co-founders of Kuloud, entered.

I said to them, "It's been a while."

"Hello."

While Alex greeted us, Rolf nodded indifferently.

Alex said to David, "I heard you had a big success with the Thomas Motors investment."

David smiled.

"Is the news already that widespread?"

"There's probably no one on Wall Street who doesn't know."

Is he implying that he's a Wall Street person even though he's in Silicon Valley?

David Rockwood, once branded as a failure for bankrupting a once-successful private equity fund, had turned his reputation around with a single investment. This is why they say life is about one big moment.

Rolf said mockingly, "Wow! You must have made a lot of money."

I shrugged.

"Well, we made a decent amount."

"So, what brings you here this time? Not trying to poach our employees again, are you?"

He seems pretty angry about the Seed incident.

"Of course not. And we never tried to poach him secretly. We were trying to scout him openly and fairly."

Rolf made a gun with his fingers and pointed it at me.

"You're joking. I'm warning you, if you try to approach Seed again, I won't let it go."

"Are you going to shoot me?"

"I might."

I chuckled.

"I'll avoid approaching him to avoid getting shot."

Since he's already on our side, what's the point of approaching him?

Alex, trying to calm Rolf down, asked, "What brings you here today?"

"I have something to say."

"What is it?"

"I want to acquire Kuloud."

He shook his head.

"I don't know how much you made from this investment, but it's far from enough to acquire Kuloud."

Rolf sneered.

"Maybe if you bring around $20 billion in cash, we might consider it."

Neither of them seemed to have any intention of selling the company. If that's the case, I need to make them want to sell.

"The market values Kuloud at around $70 billion, doesn't it?"

Rolf said dismissively, "Who says that?"

Alex added, "That's old news. We recently received a new investment offer. They wanted to buy 15% for $1.5 billion."

If this offer is accepted, Kuloud's valuation would rise to $10 billion.

"And I'm telling you again, we have no intention of selling the company, only the shares."

They're not stupid enough to cut open the goose that lays the golden eggs.

In fact, even after the IPO, they maintained a significant stake, around 20%. After the Jason Kim incident, they were forced to reduce their stake to 15%, but they are still major shareholders.

Thanks to this, both of them are among the top five richest people in the world.

Rolf asked, "So, how much are you willing to pay? I'm not selling, but I'll listen."

David said, "Whether it's $70 billion or $100 billion, those are just market valuations. And these valuations are inflated. The actual value of Kuloud is much lower."

Alex asked, "Why do you think so?"

David answered calmly, "Because Kuloud's business model is not sustainable. There's always a risk that external factors could cause the business to shut down."

Alex frowned, and Rolf looked incredulous.

I asked Rolf, "Doesn't that sound familiar?"

"What nonsense? Do you think Kuloud is a fraud like Thomas Motors?"

"..."

His attitude is as if he has no shame. I was momentarily speechless by his audacity.

Have you forgotten what happened back then? Or do you think you won't get caught?

"If you're so confident, why don't you write a report on Kuloud like you did with Thomas Motors?"

I asked him, "Really? Can you do that?"

Rolf laughed openly.

"Ha ha! Write it if you want."

"Are you sure you won't regret those words?"

"Of course not. Go ahead and write it. I'll see what you come up with."

"Do you think I can't do it?"

"Try it if you can. Be prepared for a lawsuit."

I handed him a document envelope.

"I wonder if you'll still say the same thing after seeing this."

"What is it?"

"See for yourself."

Rolf took out the documents from the envelope.

The moment he saw them, the color drained from his face.