Chapter 224: Short Selling
└Wow, Dojin Frontier’s stock price is amazing.
└Isn’t the stock price rising too much?
└Why? How much has it risen?
└As soon as Kang Tae-joon posted about Leviathan, it surged 8%.
└So, the stock price is over $20 now?
└Exactly $20.7. It’s more than five times the listing price.
└Wow, that’s incredible.
└But… will he be able to keep his word this time? His goals seem too ambitious.
└Actually, I’m worried about that too. I’m considering selling my stocks.
└It’s hard to believe a company making its first rocket can achieve reusability.
└Even Spade Z, which succeeded in reusability after 10 years, could only reignite three times.
└And the payload is 100 tons for LEO.
└Isn’t the limit for the Merlin Heavy just 60 tons?
└I’m most curious about whether they can recover the rocket properly.
└To relaunch within a week, they first need to recover the propulsion system properly.
While some supported and cheered for Kang Tae-joon, most comments on the feed doubted his goals.
However, despite such reactions, Dojin Frontier’s stock price continued to rise, perhaps due to Kang Tae-joon’s unexpected achievements so far.
＊＊＊
California, USA, Spade Z.
In the center of a glass conference room overlooking the Pacific, two men sat facing each other.
Matthew Haligan, the chief development officer of Merlin, burst into uncontrollable laughter while looking at his tablet.
“Hahahaha.”
His tablet screen displayed Kang Tae-joon’s feed post.
Five reignitions
First-stage booster recovery
Relaunch within seven days
100-ton payload.
“Isn’t the outcome too obvious? A company making its first propulsion system claims it can reignite five times.”
Even he, with a world-class development team, took 10 years to achieve just three reignitions.
And a 100-ton payload? It was an unbelievable figure.
“There’s no propulsion system in human history with that capacity.”
Haligan tapped the tablet screen with his finger, continuing his sarcasm.
“Leviathan will probably just put on a fireworks show at the launchpad. Or the first stage will disintegrate before re-entering the atmosphere.”
Merkes, who had been listening quietly, set down his coffee cup and replied softly.
“Definitely… the chances are high.”
His voice was calm, but his expression was unreadable.
“We burned through dozens of methane pumps to achieve three reignitions. And relaunch within seven days…”
Haligan nodded.
“That’s why I’m certain. Leviathan won’t even take off properly and will explode.”
His tone was filled with disdain for Dojin, but his expression hid a determination that it must happen that way.
Perhaps sensing this, Merkes turned and looked Haligan straight in the eye.
“…But, Matthew.”
His gaze sharpened for a moment.
“That Kang Tae-joon guy has broken what I thought was ‘impossible’ several times now.”
The first was the premium electric car, PRIME.
With a maximum output of 1,550 horsepower, 0-60 mph in 1.6 seconds, a top speed of 284 mph, and a fully charged range of 423 miles.
When he first saw the post, he thought Kang Tae-joon was a liar.
But…
‘When I saw PRIME at the Burkling Circuit trial, my heart stopped.’
The second was EV-Nova.
He thought they’d be far behind in production since it was their first venture into cars.
But with the ‘Terra Casting’ method and acquiring Ahsung Motors’ electric vehicle division, they closed the gap instantly.
“What surprised me most was the autonomous driving.”
The video Kang Tae-joon released.
Though it was a CG-created video, it completely shattered the rule-based framework he had been working with.
Autonomous driving through cloud-based feedback learning.
‘The speed of development is just… too fast.’
It was almost frightening.
So, even seeing this post, he couldn’t laugh it off like Matthew.
He couldn’t shake the feeling that they might actually pull it off.
“If Dojin has found a way to control engine cooling and vaporization rates, and reduce reignition intervals…”
Haligan smirked and shook his head.
“That’s impossible. If such technology existed, I would have used it first. The same goes for the ECR technology Dojin released.”
Haligan turned off the tablet screen and continued.
“They claimed the ECR could eliminate toxins from hypergolic combinations, so we tried it. But the effect was minimal.”
“No effect?”
Matthew Haligan gestured in the air with his finger as he explained.
“The ECR sits between the combustion chamber and nozzle, burning nitrogen oxides and hydrocarbon residues in a precious metal catalyst layer… The concept is sound, but for the high-temperature ceramic filter to operate without thrust loss, the catalyst reaction speed, flow rate, and nozzle expansion ratio must all be optimized.”
Haligan shook his head.
“We ran several experiments with our team, but even a slight blockage in the catalyst layer caused thrust fluctuations.”
That would lead directly to the explosion of the first-stage rocket.
“So, you’re saying it’s doomed to fail?”
Haligan curled his lips and replied.
“Leviathan won’t even take off properly on its first launch. The ECR module will cause back pressure, reducing thrust until it explodes. The whole world will witness it. And one more thing.”
He presented Merkes with decisive evidence of Leviathan’s inevitable failure.
“This… what is this?”
Merkes’s eyes widened as he examined what Matthew had handed him.
＊＊＊
Tesla Headquarters, Fremont, California.
Private Lounge.
As Merkes, back from Spade Z, was catching up on work, a call came in.
“Lionel Brennan?”
Merkes frowned at the name on the phone screen.
The Chief Investment Strategy Officer of Golden Edge.
He immediately answered the call.
[Merkes, long time no talk.]
A soft yet sharp voice came through the receiver.
“What’s this suddenly about?”
[Haha, do I need a reason to call a friend?]
Merkes and Lionel had known each other for a long time.
Before Merkes took over Tesla, they co-founded the payment startup ‘PayBrit’ in Silicon Valley.
After listing PayBrit and selling it, Merkes acquired Tesla with the proceeds.
Lionel, on the other hand, used the money to buy a stake in Golden Edge and became its Chief Strategy Officer.
In Silicon Valley, they and other founding members were called the ‘PayBrit Mafia.’
“I’m busy, so get to the point. You’re not the type to call just for a joke.”
[You’re as sharp as ever.]
After a brief pause, Lionel got to the point.
[You saw Kang Tae-joon’s post, right?]
It was about Leviathan, which he had just discussed with Matthew Haligan.
Merkes’s eyebrows twitched slightly.
“With all that nonsense he posted, how could I not have seen it?”
[I knew you’d be paying attention. So, what do you think?]
“What?”
[Do you think Leviathan will actually achieve the performance Kang Tae-joon claimed?]“
Finally realizing why Lionel called, Merkes looked incredulous.
“Are you thinking of investing in DJFT?”
[Yeah, it looks too tempting to pass up.]
Lionel had been eyeing Dojin Frontier’s stock price for a long time.
With a PER (Price Earnings Ratio) over 100, it was far beyond normal ranges.
Even combining construction, defense, and electric vehicles, their annual revenue was less than $50 billion, with single-digit profit margins.
For such a company to have a market cap over $200 billion, it was clearly a bubble.
“A PER of 100 is definitely way beyond normal.”
For the stock price to be justified, operating profits would need to grow by several hundred percent annually.
[What if Leviathan fails in this situation?]
Lionel’s voice dropped, but there was an unmistakable excitement.
[If that happens, the market will strip away all the growth premium.]
Lionel intended to take it all for himself.
Merkes closed his eyes for a moment, then opened them.
“Definitely… the chances of failure are much higher than success. Five reignitions, relaunch within seven days? A company making its first propulsion system can’t avoid engine cooling and turbopump reliability issues. Managing back pressure from hypergolic fuel won’t be easy either.”
[Good, that’s all I needed to hear!]“
Lionel sounded satisfied.
“So, you’re planning to short Dojin Frontier?”
Lionel chuckled low.
[Yeah, short selling. But just a short position would be a waste.]
“Then?”
[I’m going all-in on volatility. I’ll switch between long and short positions before and after the launch to scoop up the option premiums too.]
The corners of Merkes’s mouth twitched slightly.
He thought that if things went well, they might be able to get rid of the thorn in their side, Dojin.
The ultra-giant financial firm, a symbol of New York’s Wall Street.
If Golden Edge (Golden Edge) moved properly, it was entirely possible.
“What’s the total exposure you’re planning?”
[I’m starting with around $3 billion.]
Merkes took a sip of coffee from his cup.
Then, he immediately sent Lionel a photo.
[What’s this?]
He recognized it as a rocket propulsion system but didn’t understand why Merkes sent it.
“It’s a photo of Leviathan we obtained.”
[But… is there a problem?]
“There is, a big one.”
Merkes curled his lips and continued.
“Last year, how long did it take us to relaunch the recovered Merlin?”
[…]
“Exactly two months.”
They succeeded in recovering the propulsion system.
But it took over a month just to bring the 60-meter-tall propulsion system from the offshore barge back to the launchpad.
[Since Dojin also needs to bring the propulsion system from offshore, you’re saying they can’t relaunch within seven days as posted?]
Merkes shook his head.
“No, looking at the photo, Leviathan doesn’t even have a landing device designed for propulsion system recovery.”