Story of a Big Player from Gangnam - Chapter 832
Chapter 832: Stock Split (3) – Part 1
As Gun-Ho filled up the Gongmyeong Party’s secretary-general’s glass with liquor, the secretary-general said, “Thank you, Mr. President Goo. You are indeed so young as I heard about it. People told me that you are a young business owner, and I’ve been wondering how young you are. I envy your youth.”
“As I am relatively young, I still have a lot to learn. I do actually learn a lot from A Group’s CEO Park here who has extensive experiences with work and also life.”
CEO Park seemed to be in a good mood. After finishing half a glass of his liquor, he chipped in, “Mr. Secretary-general, you probably want to pay attention to Mr. President Goo here. He will soon emerge as a successful businessman in the field. Well, he is actually already a successful businessman who owns a company that is registered with KOSDAQ.”
Gun-Ho smiled without saying anything in response.
CEO Park asked Gun-Ho, “President Goo, how much worth is Dyeon Korea’s stock that recently became a public company?”
“It is maintaining about the same price as the initial public offering price. We are splitting the stock soon, and the price will increase a little bit as a result.”
“If you split the stock, how many shares will it make?”
“Its unit share price is now 5,000 won, and we want to lower that price to 1,000 won by a stock split. After this stock split, the total number of stocks will increase to 26 million.”
“I believe that its current price is 20,000 won something, isn’t it?”
“Yes, it’s 26,000 won to be exact.”
“So, if you divide the current price by 5, then the unit share price will be 5,200 won… This price can easily increase to 10,000 won even with a small good news about the company.”
“We will have to see…”
“Does it make Dyeon Korea’s market capitalization 260 billion won? How much of them are you owning, Mr. President Goo?”
“It’s a joint venture company, and given the shares that we previously offered to the public, and to our employees through the employee stock ownership program, my ownership interest should be a bit more than 30%.”
“So, you own at least 80 billion won.”
“Theoretically, that’s correct.”
The secretary-general, who was sitting next to CEO Park, laughed and said, “I don’t know much about how things work with the stock market, but if Dyeon Korea’s stock price increases to 20,000 won later, the shares that you own would be well worth of 160 billion won, wouldn’t it, Mr. President Goo?
“Haha, that’s correct if— and it’s a big if— the stock prices increase that much, but I’m not sure if that would happen. We have to consider the size of the company, and a company’s stock price can’t just increase limitlessly.”
CEO Park smiled and asked, “Mr. President Goo, let me ask you this; this is just for fun. If A Group offers you to buy your ownership interest in Dyeon Korea for 20,000 won per share, would you sell it to us?”
“Did you say 20,000 won per share, sir? Of course, I would sell it for that high price. But, why would A Group want to acquire my shares in Dyeon Korea? First of all, the price is unreasonably high, and secondly, since it’s a joint venture company, A Group could only own half of Dyeon Korea by acquiring my portion only.”
“Haha. I’m just saying for fun.”
Gun-Ho thought that A Group’s CEO Park seemed to be particularly interested in Dyeon Korea’s stock.
‘He showed his interest in Dyeon Korea’s stock last time we talked as well. He is asking about it today too. Does that mean A Group is actually interested in acquiring Dyeon Korea? Even though he said that he was just asking for fun, maybe they are seriously considering purchasing Dyeon Korea. Well, I doubt that though. It is true that Dyeon Korea is generating profits, but it’s still a small company with small volume of sales. 20,000 won per share is ridiculously high for a company of this size.
Moreover, a large portion of Dyeon Korea is owned by its another major shareholder— Lymondell Dyeon— as well, with the same ownership portion as mine. That means that they can’t even exercise full management right to the company either. Why are they constantly showing their interest in Dyeon Korea then? It’s fishy… There must be a reason other than wanting to acquire a good business entity.
Maybe… If I sell Dyeon Korea— that means GH Mobile sells it since technically it is a major shareholder of Dyeon Korea— to A Group for 20,000 won per share, GH Mobile will receive the proceeds from the sale, which would be 160 billion won. If that happens, those funds can be distributed among the GH Mobile’s shareholders as investment gains. Is it what they are trying to achieve as a way of making slush money for Congressman Jin-Woo Lee? Since his father— Mr. Beom-Sik Lee owns 15% of GH Mobile, he will possibly get a significant amount of funds from the dividend distribution.
That’s right. 15% of 160 billion won is 24 billion won. 24 billion won! This amount must be big enough for slush money that he needs for his political activities! Is that what they are thinking about? I’m not sure. Maybe I’m stretching it too far. It’s probably my ridiculous speculation.’
“Mr. President Goo, what are you thinking?”
“Huh? Oh, it’s nothing.”
“Would you like to have one more glass of liquor?”
“Oh, I’m good. Thank you.”
“Well, how about you, Mr. Secretary-general Lee? Please take one more glass of liquor.”
As A Group’s CEO Park filled up the secretary-general’s empty glass with soju, he said, “Hang in there, Mr. Secretary-general. Even though your party hasn’t received enough contributing funds yet, everything will be fine.”
The secretary-general sipped his liquor, and then he said, “we have a significant number of members in our political party, not to mention that we have so many places that we have to spend money on. But, not enough number of companies have contributed funds to our party. There are just a few of them including Egnopak and GH Mobile. I understand that A Group can’t make a large contribution to the party even though it wants to, because of the connection with Congressman Jin-Woo Lee.”
“That’s true. We don’t want to take a risk of being attacked for it by the opponent party.”
Gun-Ho asked, “How many members does Gongmyeong Party currently have?”
“We have more than 1 million members with rights.”
“What do you mean by members with rights?”
“Those members are the ones who pay the membership fee of 1,000 won per month.”
“It’s 1 billion won then.”
“It’s obviously insufficient to run our political party. The fund that GH Mobile contributed to us last time helped our party substantially, and we appreciate it greatly.”
More and more visitors were flowing into the funeral. Some of the condolers who arrived later had to wait for the next available seat while standing in the back of the room.
“Well, I guess we’d better leave, so other people could sit.”
“Sure, let’s leave.”
As the three men stood up from their seats, the secretary-general extended his hand to Gun-Ho for a handshake and said, “It was very nice meeting you, Mr. President Goo. I hope you could help our political party continuously. If your business needs our help, we will definitely give you support as much as we could.”
“Understood. Thank you.”
CEO Park also offered his hand to Gun-Ho for a handshake.
“I’d better get going as well. Please keep it close with the secretary-general here. You both will benefit from this good relationship. I believe that Dyeon Korea will become a very interesting company.”
‘An interesting company? What does that mean? What is he talking about?’
CEO Park didn’t say Dyeon Korea would do better, but instead, he said it would become a very interesting company. That sounded weird, Gun-Ho thought. It didn’t sound very pleasant either. Gun-Ho thought that CEO Park was evaluating his company carelessly.
‘Well, he said it would be a very interesting company, and that should be something positive on my side. So, I will get some benefits from whatever he is thinking, and it won’t cause any damage to me. That’s how I understand what he said at least.’
Gun-Ho decided to take what CEO Park said lightly without giving significant meaning.
