Chapter 226: Blueprint

Dojin Industries’ top floor, the executive office.

The stock price graph of Dojin Frontier on the wall screen was drawing a red trajectory of decline.

“Brother, is this really okay?”

Seong-hwan pointed to the screen with a worried voice.

[DJFT: $12.03 ▼-10.4%]

[Market Cap: $120.3 billion]

“It’s almost halved from the peak. I think we need to take some action, like buying back our own shares if necessary…”

Seong-hwan trusted me more than anyone, but the stock price was falling so steeply and continuously.

It seemed difficult for him to shake off his worries.

“Don’t be impatient. Just because the market is shaky doesn’t mean we have to shake with it.”

“Still… the current market situation is completely panicked. Even individual investors are cutting their losses one after another…”

At that moment, the door to the executive office was knocked.

“Sir, a guest from DJ Capital is here.”

At the secretary’s words, I immediately told them to come in.

It was Grant and Lisa, whom I had called regarding this issue.

“It’s been a while, sir.”

Although we had been in constant contact since my visit to New York for the Brexit issue,

It had been almost a year and a half since we last met in person.

“This time, I didn’t have time to go, so I had to call you here.”

Autonomous driving, semiconductor development, Leviathan, Luna Link, electric vehicles, and more.

There was so much to take care of that I couldn’t possibly spare the time to go to New York.

“Thanks to you, we got to visit Korea, which isn’t too bad for us.”

“Is this the sir’s executive office?”

Lisa exclaimed as she looked at the view outside the window.

When I first purchased this Gwanggyo site, there were only old and dilapidated buildings around.

Now, 15 years later, it had transformed into a completely different city.

The view from the building located in the heart of the city was quite nice, even in my opinion.

“I’ll start with the ‘Post-Brexit Execution Results’ as requested.”

Knowing I was busy, as soon as they sat down, Grant and Lisa each took out their laptops.

They immediately connected to the monitor in the executive office and displayed the data.

[DJ CAPITAL - GLOBAL PERFORMANCE DASHBOARD]

※ Period: June 2016 ~ March 2018

As Lisa flipped through the data, graphs unfolded like waves.

“To get straight to the point, immediately after Brexit, the combined AUM of DJ Capital and its 50 subsidiary hedge funds was $813.4 billion. And currently, it’s $1,412 billion. The 21-month cumulative return is 73.6%.”

At the numbers, Seong-hwan’s eyes widened.

“The AUM increased by $600 billion?”

At the current exchange rate, that amounted to 70 trillion won.

“Focusing on industries riding the upper curve of the ‘K-shaped recovery’ you mentioned, sir, proved effective.”

Lisa flipped to the next slide.

Numerous stocks and numbers filled the screen.

[Sector/Theme Performance]

  • Infrastructure & Construction (Korea/Southeast Asia): +41%

  • Secondary Battery Materials (Cathode/Electrolyte): +56%

  • Server/Data Center Semiconductors (DDR·HPC·Fabless Foundry): +63%

  • Consumer Reopening (Airlines·Duty-Free·Online Commerce): +22%

  • Energy & Precision Chemicals (Refining·NCC·Specialty): +28%

[Risk/Return Profile]

  • Annualized Sharpe: 2.14 / Sortino: 3.01

  • Maximum Drawdown (MDD): -6.8%

  • Beta (Global): 0.42 / Correlation Coefficient (US Market): 0.38

  • Bottom-up Alpha Contribution: +7.3%p / Top-down Timing Contribution: +5.6%p

An annualized Sharpe ratio of 2.14 indicated how stably we outperformed the ‘government bond rate.’

Typically, a Sharpe ratio above 1 is considered good,

And above 2 is deemed excellent, so 2.14 meant the portfolio’s risk-adjusted return was exceptionally high.

The correlation coefficient with the US market indicated the degree of synchronization with the S&P500.

A value of 0.38 meant the correlation was very low, indicating we had taken a path different from the US market, and the diversification effect was significant.

“The efforts of you both are clearly evident in these figures. Good work.”

“Thank you. Next is the hedging and liquidity management section.”

Lisa briefly answered and immediately flipped to the next slide.

[Cash·Hedge·Margin Capacity]

  • Cash mobilizable within 24 hours (Dry Powder): $187 billion

  • Prime Broker Limits (SS/MS/JPM/BofA): +$310 billion

  • Currency·Interest Rate Hedge: Won/Dollar Call·Cross-Currency Swaps absorbed -9%p volatility

  • Gross/Net Exposure (Average): 192% / 58%

“Immediately mobilizable cash is $187 billion, and we can borrow $310 billion from places like Silverman Sachs.”

“With gross exposure at 198% and net exposure at 58%, the short defense strategy is also solidly in place.”

Whenever I had meetings with DJ Capital, no matter how busy I was, I always brought Seong-hwan along.

Initially, he knew nothing about finance, but now he was understanding even complex terms at once.

“The dry powder being only $187 billion is because a lot of assets are tied up in acquisitions of shares in propulsion-related component companies, right?”

“Correct. The dry powder being $187 billion is, as you mentioned, due to many tied-up assets.”

Grant showed the assets tied up in the Luna Link project.

[Liquidity Bridge Status (Summary)]

  1. Strategic Equity (Lockup·Escrow): $102.4 billion

  • AL-Li 2195 Billet·Ring Position $9.1 billion (2 European firms)

  • High-Temperature Ceramic Nozzle·Shroud $6.8 billion (Japan-Germany Joint Venture)

  • ECR Catalyst Canister·Filter Module $4.3 billion (UK·Israel)

  • Navigation·Thrust Vectoring……

  1. Derivative Collateral·Excess Margin (Collateral): $61.2 billion

  • Options·TRS·XCCY Swap Initial Margin (IM) $28.5 billion

  • Variation Margin (VM) Buffer $12.7 billion

  1. Operating Funds (Short-Term):……
  • Deal Sourcing/Research/Rebalancing……

-……

“So, to summarize, $203 billion is tied up in the Luna Link project?”

“Correct. Although we’ve been acquiring shares for a long time using subsidiary hedge funds, the target companies are numerous, so the costs have been quite high.”

“Still, compared to the $1,412 billion AUM, it’s not overwhelmingly large.”

Compared to when DJ Capital was first established, it was astronomical, but considering the current massive assets, it wasn’t a burden.

“Now, let’s talk about the Dojin Frontier issue.”

“Understood.”

After finishing the status report, Lisa shared the data on Dojin Frontier on the screen.

[DJFT Real-Time Market Intel]

  • Current Price: $12.03 (-10.4%)

  • 20-Day Volatility: x2.7

  • Short Interest: 28.8% (921.6 million shares)

  • Borrowing Fee (SBF): Core Coverage Stocks Average 12.4% → 17.8% Sudden Rise

  • Option Put·Call Skew: Put Premium 34%p (vs. ATM) / Dealer Negative Gamma Entry

  • Intraday Liquidity Gap:……

  • Media·SNS Sentiment Index: +0.41 → -0.72 (D-90 → D-55)

Grant pointed to a specific graph with the pointer.

“As you can see here, news headline exposure and short betting inflow are simultaneous. And on the day the Golden Edge report came out, borrowing and put contracts spiked together.”

Lisa displayed a bubble chart with names hidden.

[Position Map (Anonymous Aggregate)]

  • Short Majors: ‘G—E’, ‘S—C’, ‘D—P’, ‘Q—B’ (Combined Short 18.2%p)

  • Short Followers: 17 Mid-Tier (Combined 7.1%)

  • Long Core: Trinity Holdings, Argo Legacy, Hanseatic Partners, etc. (Spot Long + Long-Term Calls)

  • Long/Option Hybrid:……

“So, Golden Edge, Sigma Capital, Delaware Partners, and QuantBridge are holding an 18.2% short position?”

To my question, Grant nodded.

“Correct. The four companies you mentioned are holding 18.2% of the floating shares as short positions, and mid-tier hedge funds following them hold an additional 7.1%.”

“And the long core holders are all on our side?”

Lisa shook her head.

“Not all. Argo Legacy and Hanseatic Partners are houses we did joint deals with during Brexit. They’ve laid LEAPS (2-year maturity calls) on top of long-term spots, so they’re less likely to be swayed by short-term volatility.”

“But, sir……”

Grant looked at me as if he had something to say.

“What is it?”

“About Leviathan, as you mentioned in the feed, is it really possible?”

Even though I had already explained it roughly over the phone, he still seemed uneasy.

I spoke again firmly.

“Leviathan will definitely succeed, so don’t worry and focus on strategizing how to wipe out the short-sellers with this opportunity.”

“Then… were the leaked photos fake?”

He seemed to be referring to the leaked photos of Leviathan circulating in the media and online.

I shook my head.

“No, those photos are real.”

At my words, both Grant and Lisa’s eyes widened.

“Then it’s true that Leviathan has no landing gear?”

“Yes.”

“But… then how will the propulsion system be reused……”

He seemed about to ask, but I didn’t explain in detail.

“You’ll see later, so let’s set the board first.”

I planned to wipe out all the forces messing with Dojin Frontier this time.

“…Then, under the assumption that Leviathan succeeds, I’ll explain the strategy first.”

Regardless of his worries, he seemed to have carefully prepared the investment strategy as I instructed.

A way to make those betting against me cry tears of blood,

A blueprint to trigger the short squeeze was drawn.