A Wall Street Genius's Final Investment Playbook-Chapter 163

The 13D filing must be submitted when a shareholder accumulates 5% or more of a company's shares.

For corporations, this filing is considered a declaration of war, as it grants the shareholder various rights to intervene in management.

It was for this reason that Allergan convened an emergency meeting less than an hour after Ha Si-heon made his 13D filing public.

Attendees included the CEO, CFO, IR representative, and key executives, along with the Chairman of the Board, the Lead Director, and legal advisors who were visiting the headquarters.

Allergan’s CEO, Beckett, stood up and announced the start of the meeting.

“Thank you for attending this urgent meeting despite your busy schedules. I never expected our opponent to act this swiftly.”

Allergan had been monitoring the market, so they were aware that an entity was acquiring shares in their company.

However, they had initially scheduled a strategy meeting three days later to discuss countermeasures.

Typically, after securing 5% of the shares, a shareholder would file within ten days.

Yet, Ha Si-heon filed his disclosure immediately on the very day he secured his 5% stake.

The situation was more pressing than anticipated, forcing them to assemble the meeting immediately.

“Some of you may have already seen the report, but the entity behind this is a newly established hedge fund called Pareto Innovation Capital. It’s been less than three months since its founding.”

Ordinarily, such a new fund would not be considered a major threat.

However, this case was different.

“The person leading this fund is rather unusual. Some of you might have heard of the name Ha Si-heon…”

Several heads nodded around the table.

“Of course, I know him. He’s always been quite the troublemaker…”

“I never imagined Ha Si-heon would target us…”

“Are we the next prey of the Orca?”

Though the fund itself was new, Ha Si-heon’s reputation was already well-known on Wall Street.

Even as a rookie at Goldman, he had crushed a financial mogul during the Epicura case and exposed the fraud behind Theranos.

That infamous Orca—wasn't it him?

And now, that very Ha Si-heon had set his sights on Allergan.

“Is there any reason Allergan would be a target?”

The one who raised the question was Allergan’s external legal advisor, hired specifically to deal with Ha Si-heon.

“Ha Si-heon has already made a strong impression on the public and the market by revealing the truth about Theranos. If he claims fraud again, everyone will listen to him. So, let me ask—is there any chance that we could be misunderstood in that way?”

In other words, was Allergan actually involved in any fraudulent activities?

CEO Beckett firmly shook his head.

“There is no such issue. And Ha Si-heon isn't claiming fraud either. For those who haven’t read it yet, we have prepared copies of the 13D filing he submitted.”

Activist funds that file 13D often attach letters explaining their intentions and plans.

Ha Si-heon had also expressed his stance in this way.

The documents placed before the attendees had highlighted sections:

> Allergan is a solid company, but its current operations contain various risk factors that could threaten its long-term stability.

> To ensure continued growth, we propose expanding through strategic mergers and acquisitions (M&A).

> We would like to meet with the management to discuss this matter.

In short, Ha Si-heon was demanding an M&A strategy—and he wanted to negotiate about it.

“Today, we must decide whether to accept this meeting or not.”

CEO Beckett straightened his posture.

Then, meeting the eyes of everyone in the room, he firmly stated:

“But I am against it. The moment we agree to this meeting, we signal to the market that Allergan is open to M&A discussions. Then, a flood of activist funds and corporations seeking M&A will rush in.”

In fact, several firms had previously approached Allergan with M&A proposals.

However, these discussions had never been publicly disclosed.

Since M&A processes involved significant costs, companies typically first consulted with the CEO in private before proceeding.

But CEO Beckett had always firmly rejected such approaches.

As a result, no discussions had ever progressed further.

If a CEO refuses M&A, the only remaining option is a hostile takeover, which requires tremendous resources.

However, Ha Si-heon’s approach was unprecedented.

He skipped the informal inquiry process entirely and publicly demanded a meeting about M&A.

“I believe we should reject this meeting. It’s best to leave no room for M&A discussions.”

The CEO reiterated his stance.

However, the Chairman of the Board disagreed.

“Refusing to meet with a 5% shareholder could create another risk.”

A 13D shareholder has the right to call a special shareholders' meeting and initiate a vote.

“If some shareholders support M&A, they might accuse us of rejecting discussions without even listening. And if the situation escalates…”

If Ha Si-heon rallied those shareholders, there could be a proxy battle at the shareholders' meeting, leading to a management and board shake-up.

If that happened, the newly appointed management could forcibly push M&A forward.

Of course, this was a worst-case scenario.

“I don’t believe Ha Si-heon holds that much influence. This is his fund’s first official campaign—shareholders won’t trust him that easily.”

The CEO spoke with confidence, but the Chairman of the Board thought differently.

“Under normal circumstances, that would be true. But with Ha Si-heon, it’s different.”

At those words, the room fell silent.

That was the power of reputation.

Ha Si-heon’s abnormally high credibility made him someone they couldn’t afford to underestimate.

“We need to gauge the shareholders' opinions first.”

Thus, the CEO, executives, and the Chairman began contacting major shareholders to assess their stance on Ha Si-heon’s declaration of war.

However—

> [Why not at least hear what he has to say?]

To their surprise, most shareholders supported meeting with him.

> [There are rumors that Ha Si-heon has his own unique algorithm. So far, it has shown an exceptionally high accuracy.]

At this, the CEO furrowed his brows, his expression turning unpleasant.

He had heard those rumors before.

However—

“That’s absurd. An 80% accuracy rate in the pharmaceutical industry is impossible. Do you really believe that?”

> Dismissing it just because it seems unlikely isn’t wise either. Some say he even predicted the recent Ebola outbreak.

“That must have been a coincidence.”

> [If an algorithm has accurately predicted two major events, isn't it worth at least listening to?]

Even if they didn’t fully trust Ha Si-heon, many shareholders recommended meeting with him.

“……… It seems we should meet him after all.”

Just as the Board and the CEO were discussing their stance—

A voice echoed from the speakerphone.

> We have reached your financial advisor. Would you like me to connect you now?

To deal with the situation, Allergan had hired an external financial advisor.

However, since he was based in New York, he could not attend the emergency meeting in California in person, so he had to join remotely.

Then, from the speakerphone, a deep voice came through.

> Dave Pierce, Head of Investment Banking at Goldman.

The advisor they had hired was none other than Pierce—a renowned M&A expert who had worked directly with Ha Si-heon.

“You know Ha Si-heon’s methods well. What do you think?”

Key Point: The Structure of Pareto’s Accumulated Shares

> The type of shares that Pareto has accumulated is worth noting. The shares Ha Si-heon used were rather unusual. He only utilized methods that did not require a 5% disclosure obligation, using cash settlement options.

A series of detailed explanations followed, but the conclusion was clear.

> He skillfully navigated the gray area, ensuring that no one could detect his actions. Had he continued to keep things hidden, Allergan would have been caught off guard by a surprise attack. But in the end, Ha Si-heon chose to reveal himself.

Indeed, Ha Si-heon’s behavior was rather peculiar.

He moved in the shadows when the situation was dangerous but then beat the war drums when it was time to strike.

> It lacks consistency.

At first glance, it was difficult to understand.

Typically, one either carries out a complete surprise attack or asserts their presence from the start.

“Why did he act this way?”

> I don’t know.

It was an overly candid response.

> But one thing is certain—he has a hidden agenda.

Pierce’s voice carried unwavering conviction.

> It would be wise to comply while Ha Si-heon is still speaking politely. Otherwise, he will inevitably set a fire, using the part of his plan that he has yet to reveal.

“But we can’t just agree to his demands out of fear that he might set a fire.”

The CEO remained firm, but Pierce did not back down.

> The last two fires he set were Epicura and Theranos.

Silence fell over the room.

Each of those cases had been massive—events that had shaken entire nations.

> If he doesn’t get the attention he wants, he will ignite a fire to force it. Even if there’s only a 1% chance that such a fire could spread, are you really going to refuse a meeting with him?

The conclusion came swiftly.

“Let’s meet him—at least for now.”

***

Allergan Headquarters, California

This meant I had to board a plane again.

But this time, I made a bold decision.

“Book a private jet.”

For once, I decided not to fly first class.

There was no need for me to own a jet outright. Plenty of companies specialized in private jet rentals.

However, when I requested a medium-sized jet for up to ten passengers, my assistant returned with an awkward expression.

“The compliance department says approval is difficult. There’s been increased scrutiny on executives using company funds for private jets. They insist on exercising caution…” freeweɓnovel.cѳm

They weren’t wrong.

When a CEO was ousted, the most frequently used pretext was often "misusing company funds for private jet travel."

But no matter what, this time, I had to take a private jet.

“The cost shouldn’t be much different from three people flying first class, right?”

“It’s three times the cost. They’re asking for a justifiable reason…”

What a nuisance.

The compliance department was essentially the corporate ethics division, and it was their job to nitpick like this.

"This is exactly why I should own one myself…"

If I had my own private jet, I wouldn’t have to request permission every time.

But I wasn’t at that level yet.

For now, I had no choice but to call the compliance officer directly and convince them.

> Sometimes, there’s something more important than money—time.

> [The flight time difference is minimal.]

> I’m not talking about flight duration. In first class, I can’t hold a proper strategy meeting with my team. In a private jet, we can conduct a six-hour meeting.

> This trip was arranged on short notice, so I need to maximize efficiency during travel.

> That’s why a private space is essential.

> [……Understood.]

And so, for the first time in my life, I boarded a private jet.

Of course, it wasn’t mine—it was a rental.

And it wasn’t even a Gulfstream—just a modest 10-seater medium-sized jet.

But still—

"This is on a whole different level from first class."

The journey was exceptionally smooth.

Instead of the crowded Newark Airport, I could use the quiet Teterboro Airport.

"So peaceful."

There were no long lines, no tedious security checks, no endless noise, and no waiting times.

Skipping all of that and boarding in just 15 minutes made first class feel obsolete.

“Not bad at all.”

The plane was small, but satisfying.

Most importantly, there were no rows of seats lined up like prisoners.

There was a conference table for discussions on one side and luxurious leather sofas for relaxation on the other.

“When would you like your meal, sir?”

“Please serve it in an hour.”

Unlike on commercial flights, I could pre-order exactly what I wanted—no generic airline food.

Both the menu and meal timing were entirely under my control.

"Perfect."

I even found myself humming in satisfaction.

Once we took off, I immediately began the strategy meeting.

Joining me on this trip were Dobby and Laurent.

“So… shall we discuss what you’ve found?”

I had instructed them to use their Wall Street connections to investigate everything about Allergan’s CEO, Beckett.

Even seemingly trivial details could be valuable.

“He is undeniably capable,” Laurent began.

“Under his leadership, Allergan’s revenue grew from $10 billion to $70 billion. He was also instrumental in making Botox a global success. Because of that, he has an exceptionally high level of trust from employees, executives, and the board."

He was practically the embodiment of the company itself.

“He’s British and has a resolute personality. He doesn’t get easily swayed and is extremely stubborn.”

Even these personality traits were valuable intel.

“He has received countless M&A proposals behind the scenes but has rejected all of them outright.”

Now that was an interesting piece of information.

“Some of those proposals were reportedly incredibly lucrative, yet he didn’t even entertain them. He’s known as a hardcore anti-M&A advocate.”

And yet, I sent him a letter demanding an M&A.

That was my core strategy.

Thus, the goal of this trip was simple— Convince Beckett.

“…Do you really think that’s possible?”

Laurent hesitated.

"From everything we've heard, he seems like someone who completely rejects the idea of M&A…"

But I simply smiled confidently.

“In Korea, we have a saying—‘the fire has reached your feet.’”

“…Excuse me?”

I smirked like a wise sage and continued.

“It means that even things you wouldn’t normally do, or have been postponing, become unavoidable once the fire reaches you.”