[South Korea, an IT powerhouse, thrown into chaos by an internet blackout]
[The software empire Microsoft collapses helplessly under a worm virus attack]
[Worm virus exploits vulnerabilities in Microsoft's database management system, SQL Server, causing internet outages across the globe]
[Internet disruption at Bank of America (BOA) halts operations of 13,000 ATMs]
[Japan and Taiwan also experience issues, including slowed internet speeds]
Although South Korea suffered the most damage from the simultaneous worm attacks worldwide, other countries also experienced significant disruption.
The aftermath was immediately reflected in the stock prices of technology companies, including Microsoft.
Ring—ring! Ring—ring!
"Delta and Continental Airlines have also reportedly had their online reservation systems completely shut down due to this incident!"
"BOA has announced that all servers have been fully restored and that ATM services resumed normal operation starting this morning."
With his shirt sleeves rolled up, Dan Baradan, Senior Investment Chief at Eldorado Fund, stood listening to the reports coming in from all directions before turning his head to the left.
"What about MS stock futures?"
At that, Mason leaned forward over the stack of monitors piled on the desk and replied,
"They're down 2.18%, currently at 49.17 dollars."
Dan, the Senior Investment Chief, smacked his lips lightly.
"Considering the scale of the incident, the drop isn't that significant."
"Microsoft's swift response—distributing security patches—seems to be having an impact. However, whether this will minimize the shock and wrap things up, or trigger a wave of panic selling and lead to a steep decline, will only become clear once the market opens."
"Well, once the market opens, retail investors might start dumping their shares."
"That's right."
At that moment, Chad, a junior trader, spoke as if reading aloud from an interview article displayed on his monitor.
"Linux has criticised this incident, saying it clearly exposes flaws in Microsoft's products, and that fundamental vulnerabilities in Microsoft servers caused the global internet outages."
A sly grin curled up at the corners of Dan Baradan's lips.
"Looks like Linux is helping us."
Then another trader, staring at the Bloomberg terminal, shouted.
"Breaking news! Airlines, including Delta and Continental, are reportedly considering seeking compensation from Microsoft for the damages caused by the shutdown of their online reservation systems!"
Hearing this, Dan hurriedly checked Microsoft's pre-market price on the monitor in front of him.
[MSFT: 47.53 (▼2.74) -5.4%]
As news spread that the affected companies were planning to demand compensation from Microsoft, the decline steepened in an instant.
Seeing that, Dan's eyes gleamed.
"That's right. This is a country of lawsuits—there's no way they'll just sit still."
He let out a low chuckle.
Not long after, a sharp beep rang out from the speaker installed on one side of the trading floor, signalling the market opening.
At the same time, the three major indices and the stock prices of key companies displayed on the large electronic board began to fluctuate wildly up and down.
With high oil prices compounded by the aftermath of the recent terrorist attack in Kandahar, Afghanistan, the market showed an overall downward trend—yet certain stocks were falling far more sharply than others.
These were Microsoft, along with telecommunications network stocks and companies that had suffered damage from the incident.
"Delta Air is down 1.3%, and Continental Airlines is down 1%!"
"Hilton and Marriott hotels are both declining as well!"
"AT&T and Verizon are down 1.5% and 2%, respectively!"
Among them, the one showing by far the largest drop—forming a long bearish candlestick—was, as expected, Microsoft.
"Sell orders are pouring in due to concerns over compensation for affected companies and potential class-action lawsuits!"
"Bear Stearns has lowered its target price for Microsoft from 70 dollars to 65 dollars!"
"Breaking news from the Wall Street Journal! The FCC has launched an emergency investigation into the security vulnerabilities of Microsoft's SQL Server!"
Shouts erupted nonstop from all across the trading floor.
The FCC, the Federal Communications Commission, was a government agency directly under the President, responsible for regulating and supervising all areas of communications in the United States—including cable TV, wireless, satellite, television, and wired services.
If the FCC were to determine that Microsoft had knowingly neglected server security vulnerabilities, the company could face massive fines in addition to compensation for damages.
And sure enough, as news spread that the FCC had launched an emergency investigation, sell orders surged, driving Microsoft's stock price down even further.
[MSFT: 45.33 (▼4.94) -9.8%]
"That's right."
Watching the scene unfold, Senior Investment Chief Dan clenched his fist tightly.
The traders on the trading floor also raised both arms and cheered.
"Wow!"
"It's dropping hard!"
"It's a complete waterfall, a waterfall!"
It was only natural for them to celebrate—after all, they had placed a 5 billion dollar short bet on Microsoft using 5x leverage.
Mason, who had already risen from his seat, shouted with his headset hanging around his neck.
"It's already at a 15.6% return!"
Dan glanced at the market board and replied indifferently.
"Then that's roughly 780 million dollars in profit. Well, it's modest."
If another hedge fund or family office had made this much profit from a single investment, it would have caused a huge stir like hitting the jackpot.
But the Eldorado Fund was different.
There was no need to look far—just recently, Eldorado Fund's Japan branch had made a staggering 8.42 billion dollars from yen investments.
Compared to that, this really was a modest amount.
Just then, the phone on the desk rang, and Dan reached out to pick up the receiver.
[Microsoft's stock is dropping quite nicely.]
A sly smile spread across Dan's face at the sound of CIO Andrew's voice.
"As you've probably already heard, if the FCC's emergency investigation proceeds, there's a high chance the decline will deepen even further."
[Even if it's not as severe as in South Korea, which suffered the greatest damage, the United States hasn't escaped unscathed either.]
He shifted his gaze to the side and checked the stock prices of Oracle and IBM displayed on the monitor.
"It may be a bit late, but if Microsoft falters due to this incident, I'm thinking of buying shares in its competitors, who are certain to benefit from the spillover effect."
[Hold off on that for now.]
Dan, who had naturally expected approval, slightly furrowed his brow at the unexpected response.
[And close out all the short positions in Microsoft within today.]
He tightened his grip on the receiver and asked back,
"Are you saying we should liquidate the position already?"
[That's right.]
Dan frowned, as if unable to accept it.
"But didn't you just agree that there's a high likelihood it will drop further?"
[That's true.]
"But you're saying we should wrap it up this quickly?"
[I may think so, but it seems the boss has a different opinion.]
Dan, momentarily taken aback, asked again.
"An order from the boss?"
[Yes.]
"No, but why…?"
Although he wore a puzzled expression, the moment he heard it was Seok-won's directive, Senior Investment Chief Dan couldn't bring himself to object rashly.
[According to the boss, while it's true that this incident was caused by a vulnerability in SQL Server, Microsoft had already recognized the issue and uploaded a free security patch on its website.]
"…!"
[If a free security patch was provided, yet users failed to apply it and that led to the damage, wouldn't that change the situation?]
Realizing the implication instantly, he let out a low exclamation.
"If it turns out that the responsibility lies not with Microsoft but with users who failed to properly install the security patch, then a significant portion of the negative factors will disappear."
[Exactly. That's why you're being told to lock in the profits and get out before that happens.]
Dan clicked his tongue and said,
"How on earth did the boss figure something like that out?"
[I was curious too, so I asked. Apparently, there was a similar incident back in 2001, and he found it strange that Microsoft would be unprepared this time, so he looked into it.]
"Ah, come to think of it… back in July, the year before last, more than 300,000 computers were hit by the 'Code Red' virus attack."
[That's the one.]
Dan let out a hollow laugh and shook his head.
"While everyone else is only focused on how far Microsoft's stock will fall because of this incident, he recalled the Code Red case and even went as far as verifying it himself… truly impressive."
[That's exactly why, at such a young age, he's become a major figure on Wall Street, nicknamed the 'Midas Touch.']
"That's true."
Dan nodded in agreement.
Considering everything Seok-won had accomplished so far, it wasn't all that surprising that he had been the first to recognize that Microsoft had already uploaded a free patch to fix its SQL Server vulnerability on its website.
[With reports already out that the FCC is launching an emergency investigation, Microsoft will surely reveal that it had provided a free security patch and move to respond aggressively.]
Dan gave a small nod and responded.
"I would do the same."
[Many hedge funds and traders are entering short positions, betting against the stock because they believe Microsoft's price will fall further. What do you think will happen once this information becomes known?]
"After plunging, the stock will rebound—and a short squeeze will hit immediately."
From the other end of the line, CIO Andrew let out a low chuckle.
[Then you know what action to take, right?]
Holding the receiver to his ear, Dan formed a deep smile.
"I'll liquidate the position immediately and take a long position."
[Good.]
CIO Andrew spoke with satisfaction.
[We don't know when the clarification announcement will come out, so move as quickly as possible.]
"Understood."
With a sharp glint in his eyes, Senior Investment Chief Dan gave a brief reply, ended the call, and set the receiver down.
He immediately lifted his gaze to check Microsoft's stock price displayed on the monitor.
[MSFT: 45.13 (▼5.14) -10.22%]
Fortunately, it seemed that news of the free security patch had not yet spread, as the decline was still deepening.
Straightening his posture, Dan clapped his hands loudly.
"All eyes on me!"
As he shouted loudly, the attention of every trader on the wide trading floor turned toward him.
Sweeping his gaze around once, Senior Investment Chief Dan spoke with force.
"From this moment, we liquidate all positions in Microsoft and switch to long."
At the unexpected order, the trading floor erupted into a stir.
"Right now?"
"It still looks like it could drop further…"
"Isn't this too soon?"
Although most of the traders voiced their concerns, there was no time to explain everything in detail.
"I'll explain the reason later, so for now, just move. Buy back all the shorted shares and clear out all put options!"
As he gave the order, the traders set aside their doubts and immediately sprang into action.
The sound of keyboards clattering and urgent voices placing orders through receivers erupted from all directions.
Watching the scene, Senior Investment Chief Dan crossed his arms and smiled faintly.
"Heh… if this goes well, we might make even more profit than expected."
With eyes full of anticipation, he stared at Microsoft's stock graph plunging downward like it was falling off a cliff.