An Investor Who Sees The Future

The expressions of the people in the conference room were a mix of hope for victory and a desire for it to end quickly.

Everyone must have been discussing and deliberating all night to finalize the bidding price until the last moment.

The range in which the bidding price can move is not that large.

The price desired by the seller, the price I want to buy at, the price the competitors want to buy at, and the price the market thinks – when combined, typically result in a similar amount.

Setting that price as the base, one considers how much more or less to bid. The usual range is within 10 percent of the base price, and going above 30 percent is rare.

Most likely, everyone had set the base price at $2.7 billion. How much more one is willing to spend will determine the outcome.

While one may think they just need to spend a little more, gradually raising the bid may lead to buying a luxury car instead of a compact car.

Just like how Geumoh Group collapsed after acquiring Daehu Construction with a big bid.

While other companies deliberated on the bidding price, I easily set a higher amount after much consideration.

Just as important as the outcome, the process itself is significant.

If a novel popped into my mind and I became a bestselling author, or if a theory or formula came to me and I won a Nobel Prize, I might feel sorry for other hardworking writers and researchers.

Yet, in finance, only the outcome matters.

Even if you made a perfect analysis but the next day the 9/11 terrorist attack happened, that would be a failed investment. Whether through analysis or a hunch, if you make profits, it’s a success.

Therefore, I don’t worry much about the power of foresight.

In the end, what matters most is the result.

***

The bidding process was simple.

In front of everyone, envelopes were opened to reveal the bid amounts, and the entire process was recorded on camera to avoid any possible doubts about fairness.

The auction was overseen by Song Myungho, the head of Morgan Stanley’s Seoul branch. He stood on the stage, introduced himself briefly, and then announced the bidding prices.

Mr. Song opened the envelope submitted by KRR and took out the document with the bid amount written on it. In a calm voice into the microphone, he announced the bid.

“KRR. 2.74 billion dollars.”

The amount was displayed on the monitor like a billboard.

The expressions of the company officials watching the bidding subtly changed. Even KRR, known for undervaluing the Korean market, bid over 3 trillion won.

Next, Canline Group’s bid was announced.

“Canline Group. 2.855 billion dollars.”

The amount jumped by 115 million dollars in an instant.

KRR’s CEO, Jung Taeho, looked disappointed, while Lee Jongho, the company’s representative, smiled. However, when RCK Bros’ bid was announced, that smile disappeared.

“RCK Bros. 2.917 billion dollars.”

It was an impressive amount surpassing 3.2 trillion won.

Despite expectations of financial constraints, it was a bold move. Was writing a lower price in the preliminary bidding a strategic move after all?

Sr. Manager Seo Sangwon’s expression wavered as he watched the monitor.

Expecting RCK Bros to bid high, they went one step further than anticipated.

If they had bid 2.88 billion dollars as initially predicted, they would have lost.

He whispered softly, “The vice-chairman’s judgment was correct.”

Han Chanyoung smiled inwardly and nodded approvingly.

By besting their strong rival RCK Bros with just 13 million dollars, it was a perfect victory.

Then, Eunsung Group’s bid was revealed, causing a stir within the room.

RCK Bros were bold, but Eunsung Group was even bolder. That slight difference determined the outcome.

Team leader Hachanghun lowered his head slightly. It was a disappointing but unavoidable result.

The amount had already far exceeded expectations.

It was everyone’s judgment that OTK Company and Golden Gate wouldn’t spend more than that.

And that judgment was somewhat accurate.

Oh Hyunjoo tapped her fingers while crossing her arms, a habit she had when she wanted to smoke.

“We lost.”

The cap she had set in conversation with Kang Jinhoo was $292 million. She firmly warned not to exceed that amount under any circumstances.

RCK Bros were left behind, but Eunsung Group couldn’t overtake.

If they had known the opponent’s amount, maybe they could have spent a little more… but thinking that way would lead nowhere.

Oh Hyunjoo looked at Kang Jinhoo beside her. She had worried he might be furious about losing to Eunsung, but he surprisingly remained calm.

“It’s not so bad to experience a defeat once in a while.”

This time, she looked at her younger brother. O Taekgyu was smiling cheerfully.

Seeing that, she felt an urge to get angry for no reason.

“Why is he smiling in this situation?”

Branch manager Song Myungho opened the last envelope and took out the documents.

“OTK Company…”

He paused mid-sentence, with a look as if he had seen something wrong.

All bidders’ eyes turned to him.

Why is he reacting like that? Did he bid an absurdly low or high amount?

Realizing his mistake, Branch Manager Song Myungho composed himself and announced the bid.

“OTK Company & Golden Gate Consortium. $2,930,100,000.”

The amount was displayed on the screen.

The ‘Eunsung Group $2,930,000,000’ moved down a spot, and ‘OTK Company & Golden Gate Consortium $2,930,100,000’ appeared above it.

The hall was quiet.

No one could utter a word at the unexpected result.

It’s a difference of $100,000.

Just with a mere $100,000 difference, X Cop’s owner was decided!

Amidst the shock of everyone, Han Chanyoung stepped up to the platform.

“Let’s see the documents.”

Every process was recorded, and if there are any official complaints, we can verify it. Suddenly doing this is not respectful to the auction organizer.

“Well, hold on….”

Before the staff could stop him, the documents were already in Han Chanyoung’s hands. He looked at the amount written on the paper.

Clearly, the number 2,930,100,000 was written in the amount section.

He checked inside the envelope, thinking if there were other documents, but there was nothing. This one piece of paper was all there was.

The branch manager, Song Myungho, firmly said in a mixed tone of anger,

“This is bidding interference. Please come down immediately.”

Han Chanyoung murmured in disbelief,

“This is ridiculous….”

Chairman Jung Taeho, Representative Lee Jongho, and Team Leader Ha Changhoon approached us to offer congratulations.

“You did a great job, Manager Oh Hyunjoo.”

“Haha, I lost cleanly. I should come better prepared next time.”

“Congratulations. I look forward to meeting again next time.”

Everyone thought that noona Hyunjoo would have personally written the final bid price. It makes sense because noona is a mergers and acquisitions expert. There is no need to clarify any misunderstandings here.

As we left the building, a car was waiting in front of the main gate. We got into the car right away. Just like when we arrived, Taekgyu took the wheel.

As soon as noona got into the car, she lit a cigarette as if she had been waiting.

“Sigh.”

Noona’s expression relaxed slightly.

Taekgyu said something.

“Anyone would think you’re a drug addict if they saw you.”

“Be quiet.”

Ellie retorted petulantly.

“I did apologize in advance. Do you know how nervous I was during the bidding process?”

“I’m sorry.”

After quickly smoking a cigarette, noona spoke up.

“What happened?”

“What do you mean?”

“The amount, I’m asking about.”

Ellie was curious too.

“Yes. Why did you write 2,930,100,000 dollars?”

The part I struggled with the most while deciding on the amount was precisely this. How could I answer “I had a premonition” to the question of how I determined the amount?

“You thought I would spend 2.93 billion dollars?”

Inwardly embarrassed, but casually tilted her head.

“No way. How did you know that?”

There must be a reason that is reasonable at a common-sense level. So, while eating jjajangmyeon, they consulted with Taekgyu and reached an agreement.

“It’s all thanks to Taekgyu.”

Hyunjoo asked in puzzlement, “What do you mean?”

“I just thought, let’s spend an extra $10 million at the upper limit my sister mentioned.”

“Why did you think that?”

It was a sharp question, but luckily an answer was prepared in advance.

“Just a hunch. I don’t have much experience in this area, nor have I properly researched the facts. However, when I heard my sister mention $292 million as the upper limit, I strongly felt other companies would have set a higher amount as their upper limit. So, I raised it by $10 million.”

“And it’s thanks to Taekgyu?”

“Yeah. I was about to spend $293 million, but at the end, Taekgyu insisted on adding $100,000 more, saying he would even put in his own money.”

Hyunjoo’s expression showed disbelief.

“Is that true?”

Taekgyu chuckled and replied, “Yeah.”

“Why did you spend an extra $100,000?”

To that question, Taekgyu replied shortly, “It’s fun.”

“….”

“Anyway, this is all because of me. Sis should be thankful to me.”

Hyunjoo glared at Taekgyu but didn’t say anything else.

If the amounts had been the same, the two companies would have held a second round of bidding right there. Then the bidding price would have endlessly gone up.

Ellie exclaimed while clapping her hands, “Wow! Both of them were spot on with their calculations. Who would have thought the victory would come down to a $100,000 difference.”

Noona Hyunjoo pressed her fingers against her forehead as if she had a headache but a faint smile lingered on her lips.

“After I strictly advised not to go over 2.92 billion dollars. Anyway, neither of them really listened to me,” she said, having endured many scoldings since old times.

“But it’s not an unreasonable amount, right?” I asked, and noona nodded her head in agreement.

“This is a perfectly reasonable amount.”

It was determined in the initial bidding that all companies evaluated the project at over 3 trillion. Therefore, it is unlikely to be an overpriced bid.

“Do you think Eunsung Group might come up with a different proposal?”

Winning the bid doesn’t mark the end of everything.

Even after being selected as the final negotiator, there could be setbacks in the acquisition negotiation stage. In that case, the opportunity might pass on to Eunsung Group, who offered the second-highest amount.

However, this is an exceptional case. As long as there are no issues with funding or legal matters, the acquisition negotiation proceeds in the predetermined order.

“It could happen, but considering the relationship between the auction agency Morgan Stanley and the winning bidder Golden Gate, Typo Group is unlikely to breach their commitments.”

Security companies thrive on trust. Unless there are valid reasons, bidding results cannot be overturned.

I recalled Han Chanyoung walking out without even saying goodbye after the bidding.

“How do you think Eunsung Group will perceive this outcome?”

A property valued at over 2.9 billion dollars changed hands over a mere $100,000 difference. It’s hard to attribute this to mere coincidence.

Yet, it’s unlikely they predicted the exact amount using foresight and deliberately bid slightly higher.

Noona Hyunjoo lit another cigarette and spoke again.

“Of course….”

***

Han Chang-young thought inside the returning car.

$100,000.

He had X-Corp snatched right in front of him for a sum that barely exceeded 1.1 billion won. If needed, he was willing to pay a hundred times more on the spot.

Could this really be a coincidence?

If it had been a $1 million difference, it could have been a coincidence. But it’s just a $100,000 difference. There’s no way this could be a coincidence.

There is only one rational explanation to describe this situation.

“Someone leaked information.”

Seo Sang-won, sitting next to him, asked in confusion.

“What do you mean by that?”

Bang!

Han Chang-young slammed the armrest of the door and shouted.

“Someone sold our bid price to OTK Company!”