After the conference call with Epicura ended, there was a man who angrily threw his phone and erupted in rage.
It was none other than the portfolio manager (PM) of Capital Research Group.
"Shit, is this bastard out of his mind?"
Capital Research Group held a whopping 15.42% stake in Epicura.
Just four months ago, it was only 9%, but they had increased it in anticipation of a real estate spin-off.
However, CEO Whitr was firmly opposed to the idea.
Today, they had mobilized five major shareholders in favor of the spin-off to exert pressure, but Whitr remained unmoved.
"Why is he acting like this?"
The person cautiously asking beside him was an analyst in charge of Epicura.
He had also listened in on the call and couldn't help but feel puzzled.
"There's no way he doesn't know he could be dismissed at this rate…"
Whitr's actions were difficult to understand logically. However, there was a more urgent problem at hand.
"Recalculate the expected loss if the REIT plan falls through!"
As the likelihood of the real estate spin-off beca even slimr, it was ti to seriously consider pulling out.
The PM, having given instructions to the analyst, headed straight to the execution trader.
"Unload as much of our Epicura holdings as you can!"
The execution trader, responsible for carrying out actual trades, couldn't hide his troubled expression despite being tasked with executing the PM's orders.
"Disposing of a significant amount will inevitably result in losses."
Capital Research Group held as many as 18.7 million shares.
At market value, this amounted to about $6.4 billion. Dumping even just 10% of that would cause the stock price to plumt.
"Start by offloading small amounts so as not to affect the market. Make sure no rumors spread!"
It was a tricky order, but executing such tasks was precisely the role of an execution trader.
He paused to think for a mont.
"So, no rumors, huh…?"
Using block deals or multiple brokers had to be ruled out.
While that would allow them to handle the volu quickly, news of the major shareholder’s sell-off would spread in no ti.
"Let’s check out the dark pool first."
A dark pool is a private trading system operated by financial institutions.
The trader first posted the shares on Goldman's Sigma S.
Minimum price: $43.00
Current price: $44.39
The key feature of a dark pool is that all information remains confidential.
Participants input their desired price and quantity, and transactions are only executed when the conditions match.
Matching results:
B987654/200,000/$44.23
B876654/100,000/$44.05
That's how it works.
All participants only learn the trade volu and price after the transaction is complete.
This confidentiality was the greatest advantage of dark pools.
Here, large quantities could be sold without impacting the market price.
Although there were criticisms of dark pools due to their opacity, transparency in information wasn’t always beneficial.
Without such systems, the market would have fluctuated every ti a major institutional investor managed their portfolio.
"Isn't the trading volu too low?"
The trader posted additional shares in several other dark pools, but the execution volu fell far short of expectations.
"If I increase the amount any further, rumors will spread…"
There were over 40 dark pools, but listing shares on all of them was unwise.
Many traders closely monitored transactions within dark pools.
If shares of an unpopular stock suddenly appeared across multiple platforms, it could lead to speculation about a major shareholder's sell-off.
anwhile, while the trader was mulling over these issues, the PM was walking away with a heavy heart.
The person he sought out was the Chief Investnt Officer (CIO), the top investnt manager responsible for overseeing all fund investnts.
"It seems we need to pull out of Epicura."
Upon hearing the report, the CIO's expression imdiately turned cold.
The PM had obtained approval to expand the position just a few weeks ago, confidently predicting the REIT spin-off.
And now, he was saying that judgnt had been wrong?
"You assured us it was a sure thing."
The CIO’s voice was filled with sharp warning tones. Depending on his response, the PM could face a significant reduction in his portfolio managent funds, or even dismissal.
Desperately defending himself, the PM argued,
"Two activist funds are already involved, and 49% of major shareholders are in favor, with the general eting just around the corner."
The PM's voice was tinged with frustration.
In a typical situation like this, the CEO would usually try everything to placate the shareholders.
Thus, his judgnt that the real estate spin-off demand would be accepted wasn’t entirely unreasonable.
On the contrary, it was strange that Whitr was holding out so firmly.
And that wasn’t all.
"Rather than a spin-off, it looks like he’s planning to sell Harbor Lobster before the general eting."
“Sell it? Before the general eting?"
“Yes, that’s correct.”
A brief look of confusion flickered across the CIO’s face.
Selling Harbor Lobster was bound to provoke shareholders' anger.
Yet, Whitr chose to take this step right before the general eting.
It was akin to putting a knife to his own throat.
"Do you have any idea why he might be doing this?"
“I don’t know. Unless he’s lost his mind, he wouldn’t be acting this way.”
The CIO nodded in agreent.
By now, his expression had softened.
“Unlucky, it seems.”
Wall Street is rciless toward failure, but it tends to be relatively lenient when the failure is unpredictable.
If investors were forced to bear unforeseeable risks, they would be too afraid to make future investnts.
Whitr’s actions as Epicura’s CEO were unpredictable.
Therefore, in this case, the PM couldn’t be held responsible.
What mattered now was not assigning bla, but mitigating the damage.
“If we withdraw at this point, the losses will be significant."
“…That’s right."
The CIO remained silent for a while.
After a long pause, he finally spoke.
"Let’s hold off for now."
"Sorry, what?"
"Maybe we haven’t applied enough pressure yet."
With that, the CIO imdiately called soone.
The na appeared on the screen of the smartphone on his desk.
The PM’s eyes widened at the sight of the na.
Dex Slater was notorious on Wall Street.
He was the CEO and CIO of Shark Capital.
Known by the nickna ‘Great White Shark,’ he had a fearso reputation.
[What’s going on?]
Slater’s voice rang out through the speakerphone.
“Busy these days?”
[When have I ever not been busy?]
“If you’re that busy, I’ll hang up.”
[Well, I suppose I can look into one or two things.]
“Do you know anything about Epicura?”
The CIO got straight to the point.
He detailed Epicura’s poor performance, its excessive real estate holdings, and the background of their efforts to pressure the CEO.
There was a clear intent behind sharing such detailed information.
They wanted Slater to take the lead in pushing the REIT spin-off proposal.
Essentially, the major shareholders were voluntarily calling in the ‘Great White Shark.’
But this sort of thing wasn’t uncommon on Wall Street.
When there were disagreents with managent, major shareholders often sought the help of activist funds.
Sharks had significant expertise in pressuring executives, making them valuable allies for major shareholders.
“If you’re interested, we’ll give you our full support.”
This ant they would unconditionally back Slater if he decided to join the fight.
If things escalated into a proxy battle, they would start with 15.43% of the shares in hand.
This was an appealing offer for Slater as well.
However, he was cautious.
[I’ll think about it and get back to you.]
***
Four days had passed since I returned from my business trip to Florida.
Things were progressing smoothly.
“Is the list of acquisition candidates ready?”
We were now officially pursuing the acquisition of a new brand.
This ant that Whitr had chosen my strategy.
Against all odds, my plan had been accepted over the MD’s proposal, despite being just a low-ranking employee.
In this situation, one might expect Pierce to be disgruntled, but his reaction was surprising.
He showed no hostility toward at all.
Even now, he was smiling so broadly it seed his mouth might split, as he said,
“Thanks to you, we’re about to earn double the commission.”
‘Is he being sarcastic?’
For that, his face was far too cheerful.
"Not only consulting fees but also acquisition commissions—it's a win-win, isn’t it?"
"It seems real estate is quite important."
Jeff, standing beside Pierce, added a comnt.
He intended to emphasize once again that this was not because my strategy was exceptional, but because Whitr was excessively obsessed with real estate.
‘Yeah, that reaction seems normal.’
Even if Pierce had decided to use , it would have been sensible for Jeff to display at least so level of wariness toward .
Yet Pierce showed no such signs.
"Co to my office in 10 minutes. We’ll be speaking with the CEO."
When Pierce ntioned that he would involve in the call with the CEO,
Jeff couldn’t hide his shock.
“Sean too… together with us?"
"Whitr would probably prefer it that way. It’ll save ti explaining the situation."
He wasn’t wrong, but still…
Why was he being so accommodating, despite the fact that my strategy had been chosen over his?
Pierce's suspicious behavior didn’t end there.
During the call with the CEO, he even asked this question:
"Which brand among these do you think would be the most suitable?"
He was asking which brand from our shortlisted candidates would be best for acquisition.
And he asked this during a direct call with the CEO.
"I recomnd the seafood brand Double Crab House. It would be easier to attract existing Harbor Lobster custors than with a completely unrelated brand."
Selling off Harbor Lobster and acquiring an unrelated brand would an starting from scratch.
On the other hand, acquiring a seafood chain might entice regular Harbor Lobster custors to think, ‘Why not give it a try?’
That was the crux of my argunt.
"I agree with that opinion."
Pierce imdiately expressed his support for my view.
[Then proceed with Double Crab House.]
Since both Pierce and I had recomnded it, Whitr approved without hesitation, and the direction was ultimately decided based on my suggestion.
…….
It’s not bad that things are going smoothly, but…
This is an acquisition worth a whopping $500 million.
And yet, they’re proceeding according to the opinion of a re analyst?
Honestly, this reeks of suspicion.
“Are you coming on the next business trip too?”
After the call ended, Pierce even asked this question.
This… wasn’t an order but a suggestion.
It was as if he was giving a choice.
"No, I think I’ll stay. There’s a lot of work to handle here at the office."
"Alright. Then Chris will go this ti."
He readily accepted my decision to stay behind.
Sothing still feels off.
‘What’s his real motive?’
It can’t be that he genuinely acknowledges my abilities or holds goodwill toward .
That cunning MD must have so hidden agenda, but not knowing what it is leaves feeling uneasy.
“Why aren’t you going on the trip?"
As soon as I returned to my seat, Dobby asked.
etings with the CEO were great opportunities to build connections, so analysts and associates usually pounced on them eagerly.
It must have seed odd that I voluntarily turned it down.
But I had my reasons.
"I have sothing else to investigate."
The new chain acquisition was rely a procedural necessity.
Right now, I had sothing more important to focus on.
I imdiately accessed the SEC’s EDGAR database and searched for any 13D filings.
A 13D filing is a mandatory disclosure required when soone acquires more than 5% of a company’s shares.
I checked for any 13D filings related to Epicura, but there were none.
‘Not yet?’
On Wall Street, a 13D filing carries significant implications.
Shareholders with more than 5% ownership gain various rights, such as calling special etings, proposing CEO dismissals, and nominating board candidates.
All of these are threatening actions from the managent’s perspective.
Therefore, when an activist fund acquires more than 5% and files a 13D, it is perceived as a declaration of war.
It’s essentially a signal that they plan to make a move.
“Why? Worried another shark might show up?"
Dobby, who had crept up beside and was peering at my screen, asked.
That was exactly it.
I was watching for any signs of the Great White Shark’s move.
But so far, there was no indication of any activity.
‘Are they planning a surprise attack?’
Sharks typically accumulate just shy of 5%—around 4.8% or 4.9%—before swiftly buying up more shares and filing a surprise 13D.
The Great White Shark might be employing the sa strategy.
As I was deep in thought, a Bloomberg alert sounded.
It was a speculative report about the sale of Harbor Lobster.
Since we were working with Goldman on the sale, we had known about it for months, but this was the first public announcent.
The news caused Epicura’s stock price to plumt by 20%.
Selling off a flagship brand was seen as negative news.
However, the stock recovered to its original price within half a day.
“The recovery is too fast. Isn’t this better than expected? It seems the market is reacting positively after all."
Dobby interpreted the rebound as a sign of investors' confidence in Epicura.
But I saw it differently.
‘He’s here.’
The Great White Shark.
They probably leaked the news on purpose to drive the price down and took the opportunity to buy in bulk.
My intuition was spot on.
Two days later, breaking news confird my suspicion.
The Great White Shark had made its move.
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