Chapter 217
Chapter 217
Albert Management suffered the most from the rise in the silver car stock price.
Carl Singer was in shock.
“Why the hell Jinhoo Kang…?”
It was Kang Jin-hoo who started this incident in the first place.
He pressed harder if he pressed harder, and I never imagined that it would help.
In the meantime, it is unknown foreign capital, including Golden Gate, that has accepted the pouring short selling. Of course, they would have known in advance that there would be such an announcement.
‘What kind of deal was it?’
His thinking was not wrong.
Eunsung Motors announced a corporate restructuring and share buyback along with the sale of the heavy-duty truck division to Karos following the free capital increase.
This was another boon.
The stock price has risen sharply again, and it is not enough to spit out all the profits so far, and now it is a situation to worry about even a loss.
There is a way to completely break the buying trend by pouring out a large number of short sellers at once, but the market flow completely changed after the strong Jinhoo.
Getting the flow back was not easy.
Some experts said that the cooperation between Karos and Eunsung Cha is expected in the future and showed a rosy outlook.
Everything went wrong because of Jinhu Kang.
Now, the only way is to liquidate the short sale as soon as possible. However, the more they bought, the higher the stock price continued to rise, and the higher the price, the more the buying followed and the loss increased.
Carl Singer gritted his teeth.
“After Kangjin, you bastard!”
* * *
Unlike silver car, where short covering is taking place relatively quickly, bio stocks have a tight balance between buying and selling.
As Eunsung Motor’s sales and profits are stable, the stock price rebounded as soon as the immediate problem was resolved. On the other hand, the problem of overvaluation of bio stocks has not been resolved.
How can you evaluate the value of a company?
There are several indicators of value measurement. PBR, PER, ROE, etc.
However, this is only an indicator, not an absolute standard. In the first place, it is impossible to compare different types of businesses such as manufacturing, distribution, service, IT, and games on the same basis.
In particular, expectations for future growth are more important than immediate sales and profits for bio stocks. Even if it continues to lose money, if one drug is approved for sale, sales and profits soar rapidly from then on.
However, the outlook for bio stocks was generally negative.
There was a deep distrust of the Korean pharmaceutical industry.
A biosimilar is a biologic drug that uses an active substance such as a cell or tissue of a living organism and uses a molecular biological technique.
Unlike synthetic drugs, which can be easily made only by knowing the chemical formula, biopharmaceuticals that use living cells as raw materials are not easy to manufacture generic drugs due to their characteristics.
Strictly speaking, it is impossible to make a perfect generic drug because various conditions are different in the production process, but similar drugs can be made.
Manufacturing itself requires advanced technology, and after manufacturing, it can be sold only after undergoing separate clinical trials and obtaining approval from institutions in each country.
Developed countries such as the US and Europe are currently leading the biopharmaceutical market. The question is whether Korea is capable of making biosimilars.
The forces leading the short sale have been pouring out all kinds of rumors.
The most representative of these is accounting fraud. It is said that the stock price should fall further than it is now, considering that the books were deliberately organized and made up of accounts.
Depending on where the accounting standards are placed, it may or may not be accounting fraud.
As bio stocks soared due to OTK Company investment, hedge funds once again spread rumors about accounting fraud, leading to a fall in the stock price.
Bio companies have been fighting the short selling force for so long that they complained to the government that their business was difficult because of the short selling. The short selling could not be discouraged even though most of the available means, such as a free stock issue or treasury stock buyback, were used.
Hedge funds, well aware of that fact, fought back by short selling instead of short covering immediately. But, unfortunately, domestic securities companies have joined in here.
There were as many credit loans from individuals who borrowed money to buy stocks as well as short-selling bio stocks. As the stock price plunged more than 40 percent in a short period of time, there were concerns about a large-scale counter-trading.
In fact, from the perspective of a securities company, it was a business that swims on the ground no matter what.
He earns money by lending clients’ stocks to hedge funds by receiving commissions, and makes money by lending credit to individuals.
Since you are holding stocks as collateral anyway, if the stock price falls and you are concerned about losing the principal, it is enough to forcibly collect it by counter-trading. Although there is virtually no risk of loss of principal, the interest rate was over 10%.
When stock prices fall, they make money by falling, and when stocks rise, they make money by rising.
If only they hadn’t done the short selling themselves.
However, securities companies were not able to borrow stocks for short selling, so they poured out short selling to keep pace with the attacks of speculative capital.
As a result, they did not care about the damage they would cause to their customers. It was enough if I could just make a profit.
Meanwhile, when OTK Company announced the acquisition of shares in bio stocks, the stock price suddenly surged.
Unlike hedge funds that have been selling short for a long time, securities firms have recently started selling short.
The amount of loss itself is not comparable to that of a hedge fund, but in terms of the loss rate, securities companies that jumped in late have suffered much more.
Securities companies all at once issued negative reports, encouraging individuals to sell.
[How long will the controversy over the overvaluation of bio stocks?][The biosimilar market is getting more and more competitive][Consumers still prefer original drugs][Biosimilar, very low probability of approval][Many difficulties are expected until commercialization]Normally, this would have been enough to shake the market.
But this time the opponent wasn’t very good.
– What kind of bullshit is this?
– They’re having a good fight to tell the stock price to go down.
– You don’t have to listen to them. Just keep in mind that Jinhoo Kang is buying it.
-I hate it after the earthquake, but she believes it this time!
– Trust only Jinhoo Kang and go!
– You’re doing a damn thing to short cover what you’ve been selling too. Never run out of stock.
– Just hold on a little longer and we will win!
-The only thing to keep in mind right now is Jonver!
* * *
As I am a stakeholder in Eunseong, I avoided direct stock purchases. Instead, Golden Gate and Chairman Im Jin-yong eagerly bought it, and already made more than 30 percent of it.
Instead, we focused on buying bio stocks.
Growth stocks are more profitable than value stocks, but they are also risky.
The most difficult of these is choosing the right company. If you invested in Seoseong Electronics during the IT bubble, you would have earned dozens of times, but if you invested in Saerom technology, you would have only a few thousand won left.
In the same way with bio stocks, some companies will grow big and others will collapse.
It was Sangyeop senior who chose the sport.
Even without special abilities like me, he is a person who has a basic sense of investment.
If it was during the club days, I would have looked only at the financial statements and disclosures, but now the situation has changed. Just by showing their intention to invest, they contacted me first.
Senior Sangyeop toured the headquarters and factories, met with executives, and analyzed each company.
“In terms of technology, Cell Twins are the best. There is plenty of room for growth.”
“It has already risen 20 percent from its low.”
“It doesn’t matter, I have to buy more. I think I’m going to break through the highs and keep going.”
“What is the basis?”
Developing a new drug takes a lot of money and time. In order to compensate for the price, it gives an exclusive right to sell for a certain period of time.
“Why make a generic drug even though there is an original drug?”
“Because it’s cheap.”
Senior Sangyeop nodded his head and said.
“right. A few years ago, patents for biopharmaceuticals were slowly being released. If you have the technology to make generic drugs, you can dig a bonanza. Now CellTwins is waiting for Plectra approval in the EU. When it is approved and sales begin in Europe, the atmosphere will change dramatically.”
The generic drug Plectra, made by Cell Twins, has been approved by the Ministry of Food and Drug Safety and is being sold in Korea, but has not yet been approved in Europe and the United States.
Currently, it has completed global clinical trials and is awaiting approval from the European Medicines Agency. If it is approved in the European Union, the possibility of approval in the United States is greatly increased.
It will open the door to a huge market.
As there are not one or two generic drugs pending approval, the approval of Plectra is a boon for the entire biotech stock.
I nodded.
“Buy as much as you want.”
“Okay.”
Senior Sangyeop decided to buy it.
If the future prospects are good, the stock price will drop right now, so it’s not a problem. The capital we have is enough to cover all the short selling.
But a few days later, the announcement was made.
[Plectra, unanimously approved by the European Medicines Agency (EMA)!][100% same effect as Procade!][Is the EU export route open?]Annual sales of the original drug Procade are approximately $10 billion.
Even taking 30 percent of that share would be $3 billion. If we start exporting to the European Union, our sales and operating profit will double.
As soon as the approval was announced, the Cell Twins quickly set the upper limit. With that expectation, other bio stocks also soared.
I stuck out my tongue.
“The skills are still there.”
Senior Sangyeop chuckled.
“Is it still usable?”
Individuals who have endured while receiving hedge funds and short selling cheered.
Another negative factor for the short sellers was the exchange rate.
There are two main ways to deal with the short selling of speculative capital. One is to raise the stock price and the other is to lower the exchange rate.
As the stock market turned to an uptrend and capital inflows, the exchange rate turned to a downtrend.(Read more @ wuxiax.com)
At this point, Berkshire Cashier also issued an announcement to acquire stakes in several companies. Warren Boat said that the Korean stock market is markedly undervalued and that it intends to increase its investment in Korea in the future.
The exchange rate fell even faster.
Domestic capital is not affected by the exchange rate, but foreign capital responds sensitively. This is because even if you make a profit on your investment, if you suffer a loss on foreign exchange more than that, you will lose as a result.
Short covering requires repurchasing short-sold stocks, which causes the exchange rate to fall and the actual stock price to become more expensive.
As stock prices and exchange rates moved unexpectedly and losses snowballed, hedge funds that could not stand it any longer began to withdraw.
The stock price continued to rise as short-covering volumes flocked to various good news at once. Brokerage companies were also crying and eating mustard, so they had no choice but to go short covering.
It is a problem if the stock price falls too much, but it is also a problem if it rises too much. We made a profit by selling the stocks we had bought in the meantime.
-Hey, you bastards who sell short are your enemies.
-Everyone has worked hard to hold on without selling.
– At the end of the song, happiness is coming ㅜㅜ
– The Korean stock market may be smaller than your country’s stock market, but our stock market is also great.
– There is the world famous Seoseong and Eunseong, and there is the global speculator Jinhoo Kang.
-Never ignore the Korean stock market again!
* * *
As the short selling forces retreated, the Korean stock market regained its own peace.
The problem is that something similar can happen again at any time. Either restrict short selling or modify the system so that individual investors can sell short, but no matter how much criticism rained down, the financial authorities did not budge.
Securities companies that need to protect customers are doing business with short selling. This is why the Korean stock market is said to be a graveyard of ants.
The stock market turned to a bull market, but there was another market that was the hottest.
That is the cryptocurrency market.
Vantcoin, which started to rise at the end of the year, crossed the $10,000 mark.
A few years ago, when BANTCOIN hit $100, the reaction was absurd. When I hit $1,000, I thought I was crazy.
But when the $10,000 hit, everyone was speechless.
Moreover, instead of showing any signs of declining, it continued to rise. Now I have no idea how high it will go.
The founders and early investors who made new coins made billions and tens of billions of dollars in just a few years, changing the rankings of the world’s richest people.
I was surprised to receive a report on the performance of Bansomem, invested by K Company, last year.
It has risen hundreds of times compared to the previous year.
“Profits are greater than sales.”
Sales were 533.4 billion won, and profit was 735 billion won. In other words, he sold a 100-won ballpoint pen and left 150 won.
Does this make sense?
