Story of a Big Player from Gangnam

The convention center was large in size, and Gun-Ho didn’t expect to see it fully filled with people. But, to his surprise, a lot of people came to see the presentation. Most of them were actual institutional investors, investment consultants, and people from various stock brokerage firms. Economic reporters came as well.

Gun-Ho felt calm when he held the microphone to give his presentation.

“Ladies and gentlemen, thank you all for coming. I truly appreciate that you make time to come given your busy schedule. My name is Gun-Ho Goo. I’m the president of Dyeon Korea.”

Assistant Manager Il-Gi Seong was busily taking pictures in the back of the room.

Gun-Ho continued, “Dyeon Korea is a manufacturing company that produces PP compounds and engineering plastics. We manufacture the raw materials that are used to make auto and electronic devices’ parts. We recently started producing eco-friendly materials…”

The attendees were listening to Gun-Ho’s speech silently. There were some people making a note from time to time while listening, but no one raised any questions.

When Gun-Ho talked about the company’s financial situation, he explained it very well and professionally without even looking at a document or a PowerPoint slide since he remembered all the numbers.

“Our company has been in business for less than three years; however, our annual sales growth rate is more than 30%. Dyeon Korea’s partner is the world-renowned American company—Lymondell Dyeon. We have the exclusive right to manufacture and sell the products in the entire Asia market. The company has no debt, and it generates profits. We have our factories overseas as well, specifically in Chennai, India, and Suzhou City, Jiangsu Province in China.

The Asia market is currently bigger than the markets in Europe, South America, or North America. Since India and China is a huge continent, we are planning to build more factories there. We will also expand our business to Indonesia, Vietnam, Uzbekistan, and the Middle East. In order to build additional factories in these countries, we need funds. This is the main reason why we decided to go public.”

Once Gun-Ho finished his presentation, he started the Q&A session giving the attendees the opportunity to ask any relevant questions. However, not many people had a question. Only a few asked about if the company had a competitor, and in what percentage the joint venture’s two major shareholders own its ownership interest. When Gun-Ho looked at the exit door in the back, there were a lot of people standing there. They were probably those who arrived at the presentation a bit late and couldn’t find a seat. They attentively listened to Gun-Ho’s presentation while standing in the back.

When the presentation was over, the branch manager of the stock brokerage company extended his hand to Gun-Ho for a handshake.

“It was a nice presentation, sir.”

“I hope I didn’t make any mistakes.”

“You didn’t. You did very well. You looked calm and stable which must give a good impression to the investors. When you talked about the company’s financial status, I’ve noticed that you didn’t even look at any documents. I thought it was very you.”

“Do you think we will have many investors who would show their interests?”

“A lot of investors certainly looked very interested in the company’s stock. Given the low number of available shares to buy, the price of the share will be high, I guess. Haha.”

“You think so?”

Gun-Ho took Dyeon Korea’s employees from Asan City, who came to help with the presentation, to a Korean restaurant called Roof Garden in the 63 Building for lunch. He ordered two bottles of beer as well.

“You all did a great job making the presentation materials. Let’s have a glass of beer together.”

“It was a great presentation, sir.”

Accounting Manager Myeon-Sook Jo said as she clinked her glass of beer to Gun-Ho’s, “I didn’t know you were such a good speaker, sir, since you are usually very quiet. I was startled when you gave all the numbers accurately without referring to any documents when you explained about our financial status.”

The internal auditor added with a smile, “That’s why you have to be extra careful when you talk about numbers in front of our president. If you give a wrong number, he will know it right away.”

The employees seemed to truly enjoy the lunch, maybe because they felt relieved since the presentation was over. Gun-Ho felt good as well. He said, “Dyeon Korea is going public. You can all feel proud of being part of a public company.”

Assistant Manager Il-Gi Seong, who was sitting at the end of the table, said “Sir, I have our company shares. I purchased them for 2 million won through the employee stock ownership program. The price of the share will increase substantially, right?”

The internal auditor answered his question on behalf of Gun-Ho, “You have to wait for a year in order to sell your shares since it was purchased through the employee stock ownership program. After a year, the shares would become gold. Many business owners sell their company shares to their employees at the price around the public offering price, but our president let us buy the shares at the face value. You will see. After one year when you are ready to sell your shares, there will be news coverage about Dyeon Korea’s employees who would make a fortune because the price of the share increased significantly.”

Assistant Manager Il-Gi Seong smiled broadly in excitement.

After lunch, Gun-Ho let the employees go back to work in Dyeon Korea, Asan City, and he came back to his office in GH Building, Sinsa Town. Since he had a glass of beer with lunch, he felt sleepy. He then took a brief nap for about 10 minutes. Feeling refreshed, he gulped down a bottle of water.

‘The initial price of the company shares will be determined based on the estimated demand after the presentation. I wonder how much it would be. The branch manager of the stock brokerage company predicted that the price would be around 25,000 won. It’s not like he just picked a random number, but it was based on his careful calculation considering Dyeon Korea’s asset value, the value of its revenue, business value, etc. The value of the company evaluating all was 25,000 won per share. The actual stock price will be more or less of that price.

The branch manager pointed out today that our shares that would be available to trade in the stock market wouldn’t be a lot, and that will make the price even higher. That means that the price will be on the rise once it becomes available in the stock market. Director Jong-Suk Park should wait to sell his shares then. The price will go up.’

Gun-Ho made a call to the branch manager of the stock brokerage company.

“I called you to thank you for your help in the process of coming to the IPO presentation today. Thank you.”

“Don’t mention it, sir. We just managed some paperwork for you; that’s all. I’m so glad that the presentation today was successful.”

“I have a question for you. You said at the presentation that Dyeon Korea’s stock will be strong even in the beginning when it becomes available to trade in the stock market.”

“Yes, I said that. But, the price could also drop if some stock manipulators start playing a game with it. I’ve seen one today at the presentation.”

“Stock manipulators?”

“There are a lot of clubs with members, that act as stock manipulators. Some clubs have tens or even hundreds of members. They try to make money by controlling a company’s stock price with their members’ funds.”

Gun-Ho knew about the existence of a stock manipulator and such a club since he had been investing in the stock market as well. He once thought that those sorts of clubs were like cancer in the stock market, but he also thought that without them, the stock market could be boring as well.

‘So, the branch manager of the stock brokerage company recognized a stock manipulator. I guess this could make a very interesting situation.’