At the tennis court of a mansion in South Hampton, Long Island, Joseph Salucci, chairman of Goldman Sachs, was playing a singles match with Dan Perry, chairman of Merrill Lynch.
"Forty–thirty!"
"Damn it!"
Perry swung in frustration, tapping his racket against his hand after narrowly missing Salucci's serve.
"Try not to miss the next one."
"Tch. Just serve already."
Seeing Perry crouch low near the net with a scowl on his face, Salucci let out a short laugh and stepped behind the baseline.
He bounced the ball twice and fired off a powerful serve.
Perry sprinted forward and made a clean return just before the ball hit the left corner of the court.
"Haah!"
Already waiting at the net, Salucci instantly volleyed it back, this time sending it deep to the right.
Perry dashed across the court, but the ball hit the ground before he could reach it.
"Game point!"
Salucci lifted both arms in triumph. Perry, who had missed by inches, groaned in annoyance.
"Damn it."
Standing at the net, Salucci smirked smugly.
"You might want to take a few more lessons."
"My condition's off today."
"Not your skills?"
Face twisted like he'd bitten into something rotten, Perry spun around and walked straight toward the parasol table at the side of the court.
He pulled a can of beer from the cooler, sat down, and cracked it open just as Salucci wandered over, twirling his racket.
"Hey, don't get so worked up just because you lost."
Salucci sat across from him, wearing the relaxed smile of a man who'd won, cooling off with a beer of his own.
"How about another round right now?"
Perry, still irritated from the defeat, shot back with a bitter expression. Salucci responded with a teasing drawl.
"Even if we play again, I'll probably win."
"Let's find out right now, then."
Perry's eyes flashed. He was not someone who could stand losing.
Before he could even get up from his seat, Salucci raised a hand to stop him.
"All right, all right. Even if we play again, at least catch your breath first."
"Tch."
Forced back into his chair, Perry took a big gulp of beer as if trying to cool his temper.
"You're too impatient for your own good."
Salucci chuckled and wiped the sweat off his face with a towel.
When the heat finally left his body, and he'd calmed down a bit, Salucci straightened his posture and brought up the real reason he'd wanted to meet.
"I'm sure you've heard: Eldorado Fund is shorting Enron."
Perry's annoyed expression dropped. He set his beer can down.
"I thought it was strange when they suddenly dumped their entire stake. I never imagined it was prep work for a short attack."
"I didn't either. Enron's been doing great. And now that George Bush is in the White House, everyone's expecting them to benefit even more."
Perry leaned back in his chair and nodded slightly in agreement.
"Everyone knows Haywood, Enron's chairman, is one of George's longtime friends and supporters. And if the White House pushes through deregulation for the oil and gas sector, Enron stands to gain the most."
As he spoke, Perry's brow tightened a little.
"That's exactly why no one expected a short attack. Both of them are major supporters with deep personal ties to President Bush."
"I wondered about that too. I looked into it closely, but I couldn't find anything wrong with Enron."
Salucci placed the towel he'd used to wipe his sweat on the table.
Perry had also ordered an internal review the moment he learned Eldorado was shorting Enron, but nothing suggested the stock should collapse.
If anything, the findings pointed to strong momentum and even higher valuations in the future.
"If the company isn't the problem, yet they're dumping shares and trying to drag down the stock, then there's only one explanation."
"And what's that?"
Perry's eyes sharpened with interest.
"For some reason, the two of them must've had a falling out. Something emotional. A fight."
Perry frowned, clearly surprised.
"You're telling me someone would short a company worth more than seventy billion dollars over a personal feud?"
Salucci shrugged.
"It sounds ridiculous, but the world doesn't always behave according to common sense."
"..."
"After so many consecutive wins, and after gaining that level of fame and wealth… maybe he's gotten arrogant. Maybe he thinks he can move the market however he pleases."
Given that Seok-won had accurately predicted the dot-com crash and made a killing on the short, becoming one of the most influential figures on Wall Street, a little arrogance wasn't hard to imagine.
Salucci glanced sideways, studying Perry's expression, then spoke in a slightly lower voice.
"Whatever the reason, the fact that Eldorado Fund has exposed such a massive short position… doesn't that present us with an excellent opportunity?"
Perry understood immediately.
"You're suggesting we buy up Enron shares and force a short squeeze."
"Exactly."
Salucci leaned forward, continuing.
"It's an estimate, but as of yesterday, Eldorado's short position in Enron exceeded eight million shares. That's more than ten percent of the total outstanding shares."
"No wonder the price dropped. With them unloading that kind of volume every day, the stock had to fall."
Under Eldorado's relentless daily short selling, Enron's share price had dropped to 79 dollars and 21 cents—down 13.2 percent from its peak.
"With numbers like that, isn't it worth making a move?"
Though Salucci posed the idea with subtle enthusiasm, Perry's response was lukewarm.
"Sure, the short interest is big. But even if we absorb all the selling, push the price up, and force Eldorado to capitulate… what happens if other shareholders start dumping their shares? Then all our effort just lines other people's pockets."
"That's true—if things play out that way. But if Eldorado doesn't back off and keeps shorting until their position exceeds twenty percent of the float, the whole situation changes."
Perry's eyes sharpened.
"They're not stupid. They know increasing their short exposure also increases their risk. Would they really go that far?"
"That's the thing—we don't know. But based on everything we've seen from Chairman Park Seok-won so far? He dumped his entire stake and shorted tens of millions of shares. You think he'll be satisfied making a measly ten percent return? Of course not."
"Well… considering he's been hitting jackpots of several hundred percent repeatedly, I suppose the payoff does look small in comparison."
Any other hedge fund would've been popping champagne at such profits.
But for Seok-won and Eldorado, it barely counted as noteworthy.
"If he's already gone in this deep, and if not just the two of us but other investment banks and funds join forces to corner him, we could actually pull this off."
"Hm…"
Perry stroked his chin in thought.
Salucci's steady persuasion seemed to be working; unlike at the start, Perry now looked genuinely interested.
"Even so, if other shareholders start selling, it'll be hard to push the stock into a full short-squeeze situation."
"Then we just make sure Enron shareholders don't sell."
"And how do you expect to do that?"
Perry narrowed his eyes. Salucci raised the corner of his mouth in a meaningful smile.
"We spread the word across Wall Street that Eldorado Fund is trapped and being forced into short-covering."
Perry let out a low whistle.
"If Eldorado has to buy back shares to close their short, the stock will shoot upward. That'll trigger greed—shareholders will want to sell at a higher price, so they'll hold instead."
"Exactly. Knew you'd catch on fast."
Salucci grinned in satisfaction.
"If Eldorado gets anxious because there aren't enough shares to buy back, they'll keep raising their bid. And the higher the price climbs, the more shareholders will cling to their shares."
"And if we quietly encourage that sentiment from the sidelines… the effect will be even stronger."
Perry, now listening with folded arms, nodded.
"And once the moment is right, we dump everything first and walk away."
"If we don't get greedy and cash out around a hundred dollars a share, that should be enough."
"Not a bad plan."
A hungry gleam flickered in Perry's eyes.
Yes, the moment the squeeze broke, the stock would crash again, leaving the latecomers and unsuspecting shareholders holding the bag—but that was none of their concern.
"Well? Interested in teaming up?"
"Hmm…"
Perry still didn't answer immediately.
It looked promising, but the opponent wasn't just anyone—it was Seok-won and Eldorado Fund. Jumping in recklessly would be foolish, so hesitation was inevitable.
Salucci leaned in and spoke in a low, coaxing tone.
"We've taken heavy losses to Eldorado Fund more times than I care to count—starting with the dot-com crash. Don't you think it's about time we paid them back and restored some pride?"
The moment Salucci said it, Perry was reminded of the humiliation he suffered when he sold put options right before the bubble burst.
Even now, the memory made his stomach churn with anger.
"You're right. It's time we knocked them down a peg."
Perry nodded, finally accepting Salucci's proposal.
"Fine. Let's talk to a few others and see what they think."
"I'll make some calls and set up a meeting."
A satisfied smile spread across Salucci's face. Bringing Merrill Lynch over to his side was a major win.
The two men completely forgot about their tennis match and spent a long while discussing—in great detail—how to drive Eldorado Fund into a full-blown short-squeeze trap.
***
As usual, Seok-won arrived at his office on the top floor of the 63 Building in Yeouido. Handing his jacket to Na Seong-mi, he spoke.
"I'll have a warm Americano, please."
"Of course."
Smiling, she hung his jacket neatly in the closet and stepped out.
Seok-won sat at his desk and, out of habit, moved his mouse to pull up Enron's stock chart.
[ENE: 71.24 (▲1.02)]
He clearly remembered seeing Enron fall below seventy dollars a share before going to bed.
Now it was up by a whole dollar. A faint crease formed between his brows.
Sensing something odd, he checked the trading volume. About an hour before market close, a sudden surge of large buy orders had pushed the price upward.
"Well now… look at this."
The moment he felt certain that someone was deliberately moving the stock, his phone buzzed.
He picked it up from the desk, saw Landon's name on the screen, and answered immediately.
"I was just about to call you. Good timing."
[I take it you've seen Enron's price.]
Leaning back in his chair, Seok-won asked,
"Looks like someone hit us with a counter-short attack. Am I right?"
[That's what it appears to be.]
Instead of looking alarmed, a relaxed smile spread across Seok-won's lips.
"They stayed quiet even as our short position approached twenty-five percent, so I wondered if they'd sit still.
But of course—they took the bait."
[The groups we've identified so far are Goldman Sachs, Merrill Lynch, and JPMorgan. What should we do?]
They were all top-tier Wall Street powerhouses, but Seok-won didn't show the slightest hint of concern.
"Stick to the plan. Increase our short position even further and make it look like we're trying to crush the price by force. That'll convince them we've walked straight into their trap and make them even more eager to scoop up Enron shares."
Landon had expected this response, and he laughed lightly.
[I'll proceed as you said.]
After ending the call, Seok-won stared at the Enron chart on his monitor. A cold, mocking smile touched his lips as he murmured to himself:
"Charging in without realizing they're walking into their own death. How stupid."