[Half-Success in the First Launch of Korea's Space Rocket, Uranus
Korea's first space launch vehicle, the historic Uranus, failed to enter its originally planned target orbit and was announced as a half-success.
After reaching an altitude of 195 kilometers, the first-stage rocket was supposed to shut down and separate. However, contrary to the plan, the separation mechanism did not function properly, resulting in...]
Although it used existing engines with proven performance and safety, and incorporated a significant amount of Russian technology, it was still the first space rocket ever manufactured domestically. As a result, the probability of failure was far higher than that of success.
Because of that, no grand ceremony was held, and no distinguished guests were invited.
The governor of Jeju Province, members of the National Assembly, and even the Blue House expressed their desire to attend the launch site. However, worried that the atmosphere would become chaotic and that the researchers might feel pressured and lose focus, Seok-won personally stepped in and declined all of them.
In truth, being able to refuse the political establishment so outright, without worrying about repercussions, was something only Seok-won could do.
Even so, since it was the historic first launch of a Korean space rocket, not only press crews but also large crowds of onlookers gathered around the Moseulpo Space Center.
Seok-won looked at a newspaper article about the failed launch, which featured a large photo of his face alongside an overview of the Moseulpo Space Center, then let out a bitter smile and set the paper down.
"Looks like it really was the right call not to make a big spectacle out of the first launch."
Even now, the level of interest was high enough that the story was running on the front pages of major daily newspapers. If the launch had failed after putting on a noisy event with a crowd of VIPs in attendance, the aftereffects would have been far worse.
"It would've been great if we'd succeeded on the very first rocket launch, but you can't expect to be full after the first bite."
In fact, if it had failed with a real satellite onboard instead of a test payload, the damage would have been much greater, so it was fortunate that wasn't the case.
"This launch cost about 10 billion won, so it was a bit pricey, but we can think of it as paying for a preventive shot in advance."
After briefly sinking into discouragement over the failed launch, the Blue Space researchers regained their motivation thanks to Seok-won's encouragement. They were already out at sea aboard the Cheonghaejin, a 3,200-ton rescue vessel provided by the navy, working to recover rocket debris that had fallen into waters near Okinawa.
Once all the wreckage was retrieved and thoroughly analyzed, they planned to identify the cause of the failure and immediately begin building a new rocket for a second launch attempt.
"As rocket launches become more frequent going forward, we'll probably need the navy's rescue ships more and more. Might as well take this opportunity to build a bigger, next-generation rescue vessel and donate it."
That way, even debris that had sunk deep into the ocean over much greater distances could be recovered without issue, making it a clear benefit for Blue Space as well.
"If we scale it up to about twice the size and build something around the 7,000-ton class, that should do it."
The navy would gain a far larger, state-of-the-art vessel than before, while Blue Space could avoid owning a rescue ship outright and simply receive support whenever needed, saving a significant amount of cost. It was a win-win situation for both sides.
"Looks like I should tell President Yoon to talk things over with the navy."
As he was mapping out the next steps, the phone lying on his desk began to ring.
[Boss. It's me.]
Hearing Landon's voice, Seok-won leaned back into his plush leather chair and asked,
"It should be nighttime in New York right now. What's going on at this hour?"
[I'm calling because there's something urgent I need to report to you.]
Hearing the noticeably excited tone, Seok-won felt his curiosity stir as well.
"What is it? Tell me."
[Moody's is going to downgrade WorldCom's credit rating by another three notches tomorrow, down to Ca.]
The moment he heard that, Seok-won's eyes flashed.
"Ca? That's a junk rating, isn't it?"
[That's right. It's practically stamping them with a label saying bankruptcy is imminent.]
"After the accounting fraud came to light, they've already been downgraded several times. And now they're dropping it three more notches at once. In a situation where their cash is already drying up fast, this will push WorldCom even further into a corner."
[Standard & Poor's and Fitch are planning to follow with downgrades as well, so just as you said, their funding lines will dry up even more.]
Holding the receiver to his ear, Seok-won gave a small nod.
"I wouldn't want to extend additional loans or buy corporate bonds from a company that might go bankrupt at any moment either."
[Exactly. There's already serious concern that they won't be able to repay the tens of billions of dollars in debt coming due in the second half of this year. If news of another credit downgrade gets out on top of that, WorldCom's bond prices, which have already collapsed, will quite literally become worthless.]
Landon let out a soft chuckle.
[When that happens, thanks to your foresight, boss, the returns on our positions won't just come from the stock side. The massive short bets we placed on WorldCom's bonds will pay off big as well.]
Seok-won replied with the corner of his mouth lifting slightly.
"A few days ago, WorldCom's management announced a restructuring plan that included laying off 20% of its employees. With this credit downgrade, that'll all be completely drowned out."
[That's right. When people are wondering if the company might go bankrupt at any moment, no one's going to care about a 20% workforce reduction.]
"What's WorldCom's stock price right now?"
[97 cents per share.]
Raising one hand to stroke his chin, Seok-won said.
"Considering it dipped to around 40 cents a few days ago, it's rebounded quite a bit."
[Several hedge funds that thought it had hit bottom stepped in to buy on the cheap, pushing the price back up.]
WorldCom, which had once traded above 60 dollars, had plunged repeatedly and turned into a penny stock, so it was understandable that many believed it had fallen far enough.
[If Moody's announces the downgrade before the market opens tomorrow, the hedge funds that rushed in without fear will realize that there's a hell beneath the floor.]
"If this happens, there's a high chance the 2 billion dollar emergency funding package currently being discussed with the creditor group will fall apart."
[If WorldCom goes bankrupt like this, they won't just lose the interest. They may not even be able to recover the principal. But if they lend more money and lose that as well, they'd only be increasing their losses. They'll probably write off what they're already stuck with and walk away at this point.]
Since that was exactly what he was thinking as well, he nodded and said.
"Then, like Enron, they'll have no choice left but to file for bankruptcy."
[That's how it'll likely play out.]
As he continued the call, Seok-won brought up WorldCom's stock price chart on the monitor in front of him. He lightly tapped the desk with his fingertips, thinking for a moment.
After reaching a decision, he adjusted his grip on the phone and said,
"If the share price drops below 30 cents, liquidate the position immediately."
[You said 30 cents?]
"That's right."
Landon burst into loud laughter on the other end of the line, making a fuss.
[With positions this large, covering the shorts will push the price up a bit, but even so, we'll still be looking at returns of over 90%. Once those numbers get out, Wall Street is going to be turned upside down again.]
Seok-won let out a soft chuckle and added,
"Liquidate the WorldCom bonds as well."
[Understood.]
As he was replying, Landon suddenly spoke as if he had just remembered something.
[Ah, and it looks like Xerox will be facing another credit rating downgrade soon as well.]
After Enron and then WorldCom were exposed for accounting fraud, the U.S. Securities and Exchange Commission (SEC), recognizing the seriousness of the situation, launched a broad investigation targeting the five major accounting firms in the United States.
As a result, it was revealed that Xerox, the world's largest photocopier manufacturer, had inflated its revenue by more than 3 billion dollars over four years by improperly overstating income through overseas affiliates and equipment leasing arrangements.
[With its core copier business already struggling and restructuring underway, the accounting fraud scandal has erupted on top of that. It looks like it will be difficult for them to roll over the 7 billion dollars in debt that needs to be repaid by May.]
"If it were just Xerox, that might be one thing. But with not just WorldCom, but multiple companies teetering on the brink of bankruptcy, the banks won't have the capacity to support them all."
[Exactly. With non-performing loans snowballing, the banks will be more worried about their own survival than helping other companies.]
Seok-won asked, wearing an expression like a hunter staring down his prey.
"How much cash does Xerox have left?"
[We can't know the exact figure, but even at most, it wouldn't exceed 2 billion dollars.]
"That gives them a few months of breathing room, but it's nowhere near enough to repay their debts."
[As you said earlier, with the banks in poor shape and the accounting fraud issue piled on top, extending the repayment period will be difficult.]
At that, a deep smile spread across Seok-won's lips.
"Then let's propose a deal to Xerox."
Caught off guard, Landon asked in a puzzled tone,
[There doesn't seem to be much there that would tempt you. What exactly are you talking about?]
"Have them give us the Palo Alto Research Center."
[...!]
Also known by the abbreviation PARC, the Xerox Palo Alto Research Center was, as its name suggests, an R&D division located in Palo Alto, California.
It first opened its doors in July 1970, making it a research institute with a history of no less than 32 years. Rather than focusing solely on printing technology, it carried out innovative development and research across a wide range of fields.
Most notably, countless technologies had their first ideas conceived and brought into existence there, including the laser printer, the world's first personal computer and graphical user interface, and Ethernet.
'Even the mouse, an essential computer input device, was first invented at PARC, but Apple quietly swooped in and took advantage of it.'
It would not be an exaggeration to say that virtually the entire blueprint of modern computing originated there. Yet, unable to properly recognize the value of these technologies, Xerox ended up throwing away with its own hands the chance to become one of the greatest companies in history.
"What I want are the outstanding researchers at PARC and the patents they hold."
Landon, who knew well that Seok-won was so interested in patents that he would even set up separate companies just to acquire them, assumed this was more of the same and did not make a big deal of it.
[Under normal circumstances, they wouldn't consider selling the research center, but with the company standing on the edge of a cliff right now, there should be room for negotiation.]
"Don't drag this out and risk unexpected variables cropping up. Present an amount that will leave Xerox's management with no choice but to sell the research center."
[How much are you thinking?]
After thinking for a moment, Seok-won spoke.
"Tell them we'll pay 1 billion dollars."
Landon inhaled sharply, clearly surprised.
[That much?]
"It's more than worth that. Even if we have to add a premium, make sure we secure PARC no matter what."
He still didn't fully understand, but since it was Seok-won's instruction, he nodded and accepted it without further protest.
[Understood.]
"And as for the short positions we've taken on Xerox, you can handle the timing and unwind them as you see fit."
[Yes. I'll take care of it.]
After ending the call and setting his phone down, Seok-won interlaced his fingers and leaned back.
"Xerox never really made proper use of the technologies developed at PARC, but the patents are still there. Just collecting licensing fees from IT companies would bring in tens of billions of dollars every year. In that sense, 1 billion dollars is practically a bargain."
On top of that, once the profits from unwinding the short positions on Xerox came in, they would exceed 1 billion dollars anyway, meaning it would be almost the same as acquiring PARC for free.