The company once hailed as the legend of Japan's IT venture scene, alongside Masayoshi Son's SoftBank, was none other than Livedoor.
It started with a simple idea: free internet services. In today's terms, it was similar to the ad-supported free application model.
"It wasn't a bad idea. From the start, they had a solid revenue base in advertising. Regardless of whether it succeeded or not, it was sound."
They were also lucky. They caught the wave of the dot-com boom at just the right time, even making it to a Tokyo Stock Exchange listing the following year. But not long after, the devastating tsunami of the dot-com bubble burst hit, and they couldn't withstand the crash.
In the end, as the company was on the verge of shutting down due to a rapid decline in management, a young venture entrepreneur named Koyu Takahashi stepped in and acquired it, marking a dramatic turnaround.
Seok-won pulled out a report sent from the company's Japan branch that was filed neatly on one side of his desk.
Inside were photos of Koyu Takahashi and a detailed analysis of his venture company, On the Edge, which he had founded himself.
Leaning back into his plush leather chair, Seok-won looked at the smiling Takahashi in the photo and murmured in a dry tone,
"With just six million yen, he started as a small website design company, then went on to acquire Livedoor and several other firms. To think he became a major figure in Japan's IT industry within only four years—his business acumen is undeniable."
After acquiring Livedoor and even renaming his company after it, Takahashi continued his aggressive streak of mergers and acquisitions.
By his thirties, he commanded a massive business empire—around forty subsidiaries across sectors like securities, credit cards, distribution, publishing, and consumer finance—with a total market capitalization of nearly one trillion yen.
In a country like Japan, known for its manufacturing industry, achieving such rapid growth based solely on IT within four years was almost unheard of, which made his success all the more remarkable.
"Of course, there's Masayoshi Son, who founded SoftBank first," Seok-won muttered, "but as his name suggests, being a Zainichi Korean, he's always been treated as an outsider in Japan. They probably don't want to acknowledge him."
In contrast, Koyu Takahashi was a pure-born Japanese and a graduate of the prestigious University of Tokyo, which made it only natural for the Japanese public to idolize him.
He became the symbol of the so-called "New Economy"—a golden boy of the internet age—and rose to hero status among Japan's youth.
Riding on his immense popularity and public recognition, Takahashi even ventured into politics, running for the House of Representatives under the ruling Liberal Democratic Party's endorsement. His career seemed unstoppable.
"But the problem," Seok-won muttered, "was that none of this success was built honestly. It was all a show—a sandcastle of lies and dirty tricks like window dressing and illegal financial dealings."
The success story of Koyu Takahashi, once celebrated as Japan's national hero, came to a bitter end when he stood handcuffed in front of the prosecutor's photo line.
Even knowing this, Seok-won had still chosen to invest in On the Edge, the company Takahashi had founded. Before the deception was exposed, the company's meteoric growth had caused its share value to skyrocket.
"If I pull out before the truth comes to light, I can make a hefty profit. There's no reason to just sit back and watch."
As he imagined how much his investment would multiply, a faint smile formed on Seok-won's lips—just as his phone began to vibrate again.
Already expecting the call, Seok-won glanced at the screen, saw Landon's name, and immediately answered.
"Judging by your call, I'm guessing Bank One's earnings report is out?"
[That's right, boss.]
Hearing the unusually upbeat tone in Landon's voice, Seok-won spoke while holding the phone to his ear.
"Judging by that cheerful tone, I take it the results came out just as we expected."
[Hahaha. That's right. This quarter's profits dropped by another four hundred million dollars, just like last time—and their earnings guidance projects an additional decline of over sixteen percent.]
"So, an earnings shock, in the truest sense."
[Exactly. As soon as the announcement came out, Bank One's stock—which was already on a downward trend—plummeted even further in after-hours trading. It's now down to half its peak value.]
"When the market opens, disappointed investors will dump their shares, pushing the price down even more."
[There are times when an excessive drop after an earnings shock triggers bargain buying and a rebound, but in this case, the results are too poor. I'd say the odds of a deeper fall are much higher, just as you said.]
"The market's disappointment matches the expectations that had built up around the merger. When hopes are that high, even a small miss feels like a disaster."
[Couldn't agree more.]
As they spoke, Seok-won checked the Bloomberg terminal installed beside his desk. Sure enough, negative headlines about Bank One were flooding in.
[There's even talk of replacing the executive team after back-to-back earnings shocks.]
A sharp glint appeared in Seok-won's eyes as Landon continued.
[Honestly, if I were in their shoes and saw the stock collapse like this, I'd probably want to fire the entire management team too.]
Seok-won's gaze narrowed slightly as he thought that the time was drawing near for another Wall Street giant—Jamie Dimon—to step onto the stage.
"What's Bank One's share price right now?"
[It's trading at $41.21 per share in the over-the-counter market.]
Considering that the stock had once surged past $80 per share after the merger announcement, it really had been cut in half.
Seok-won moved his mouse and watched the stock's movement on his monitor.
"When it drops below $30, close out the short position."
[Given the current sentiment, the price might fall even further. Wouldn't it be better to hold on a little longer?]
But Seok-won, who already knew that Jamie Dimon would soon take over as CEO and revive Bank One, shook his head firmly.
"Even if the situation looks bad now, considering Bank One's size, there's not much left to gain once it goes below thirty."
Landon, sensing that Seok-won had made up his mind, sounded a little disappointed but agreed to follow orders.
[Understood. If that's your decision, I'll proceed accordingly.]
"Once we've cleared everything, start buying as much Bank One stock and call options as possible."
[Excuse me?]
Landon's voice shot up in surprise at the unexpected instruction.
[You mean… take a long position?]
The disbelief in his tone was unmistakable.
It was understandable—bad news was piling up, the earnings outlook was terrible, and yet Seok-won was instructing him to flip from short to long.
"Yes."
When Seok-won replied calmly, Landon quickly followed up.
[Do you believe Bank One's stock will rebound?]
"It might fall a little further," Seok-won said evenly, "but once it goes below thirty dollars, I think there's far more room for it to bounce back up than to keep falling."
In fact, after Jamie Dimon took over management and successfully restructured the company, Bank One was eventually acquired by JPMorgan Chase in a massive $58 billion deal.
And during that time, the stock that had been cut in half recovered its value.
Given that Bank One's board, shocked by the repeated earnings disasters, would soon dismiss its current executives and start searching for a new CEO, this was the perfect moment to reverse their position.
[Are you expecting that once the executives are replaced over the poor results, the mood will shift and confidence will return?]
Landon, ever perceptive, asked the question directly. Seok-won smiled faintly, still holding the phone.
"Exactly. Once that happens, the power struggle between the old Bank One and First Chicago executives should settle down, at least to some degree."
[Now that you mention it, that does make sense.]
Landon agreed after a moment of thought.
[Understood. I'll switch the position as you instructed.]
"Good."
Just as Seok-won was smiling in satisfaction, Landon suddenly spoke again.
[Oh, and there's one more thing I should report.]
"What is it?"
Seok-won leaned back comfortably in his chair as he asked.
[The Quantum Fund, which had been betting against the market on the belief that stocks were overheated, has reportedly taken a major hit—losing tens of millions of dollars and closing out all of its short positions.]
"...!"
Seok-won's expression hardened as he straightened up in his chair.
"Is that true?"
[Yes. From what we can tell, all of their massive short positions on index futures and large-cap stocks were liquidated at once. Wall Street is practically gloating over it. The same Quantum Fund that once brought the Bank of England to its knees has now tried to go against the trend—and learned a painful lesson.]
As the saying goes, you envy your cousin when he buys land. The Quantum Fund, long envied by other hedge funds for its consistent profits through moves like the pound attack and the Asian financial crisis, had now taken heavy losses and been forced to retreat. Seok-won could easily imagine how the mood must be.
[According to rumors, their losses this time exceed seventy million dollars. Even for Quantum, that's a serious blow.]
"I can believe it. With all three major indices hitting record highs day after day, it must have been impossible to keep holding out."
[Exactly. Just imagining how nerve-wracking it must've been—watching the market rise endlessly while sitting on shorts—gives me chills.]
Landon shuddered as if the thought alone made him uneasy, then continued.
[To recover their losses, they immediately flipped positions and started buying large-cap stocks aggressively. With even the Quantum Fund—one of the last remaining pessimists—finally capitulating, the market will probably gain even more momentum.]
Landon sounded optimistic, but his expression told another story.
He knew that when the last bear surrenders and unbridled optimism paints the market in rosy tones, it often means the bubble has inflated to its absolute limit—right before it bursts.
But the final stage of a bubble is always the most dazzling and intense, Seok-won thought. It's when people ignore the warning signs, afraid of missing out, diving in like moths to a flame—only to be trapped at the peak and lose everything.
[There used to be endless debates among Wall Street traders about who was the better investor—George Soros or you. But I think that question's finally been settled.]
Seok-won, who had been brooding over the impending market bubble, gave a wry smile at Landon's carefree remark.
"We're not children. I don't concern myself with things like that."
[Of course, I'm sure you don't.]
After chatting a little longer with Landon, Seok-won set his phone down and muttered with a heavy expression,
"It's time to stop dancing and leave the party."
The liquidation of Rodney, the CIO and the last remaining pessimist, served as a canary in the coal mine—a clear signal that the dot-com bubble was nearing its end.
TL/n -
Livedoor Co., Ltd. (株式会社ライブドア, Kabushiki-gaisha Raibudoa) was a Japanese company that functioned as an Internet service provider and operator of a web portal and blog platform before being brought down by a scandal in 2006.
The company was founded and led in its first 10 years by Takafumi Horie, known as "Horiemon" in Japan. Livedoor grew into one of Japan's premier Internet businesses, putting over 1,000 employees on its payroll at its peak. Its reliance on acquisitions and stock swap mergers to achieve growth also made it one of the country's most controversial enterprises.
Its growth came to a resounding halt when a scandal erupted in early 2006. An investigation of securities law violations led to a nosedive in the company's stock price.
The Tokyo Stock Exchange delisted Livedoor on April 14, 2006.
The floundering company's properties were purchased by South Korea–based NHN Corporation in 2010.