ridiculous cases of SKorean stock rumors

A 30 year old man was indicted on charges of stock price manipulation yesterday. Well, this kind of thing always happens (and always will hereafter) but what interests us in this case is that it was related with politics, namely upcoming elections.

The rigger made a picture go viral on the web lat June. The picture depicted an unknown man with Moon Jae-in, one of the most prominent presidential candidates. With the picture, the rigger claimed that the man in the picture (with the prominent candidate) is a member of board of some company, of which the rigger had bought stocks. The price of the stock tripled in a month. Later, it turned out to be a lie—the man in the picture was a nobody—and the price crashed, causing heavy damages to personal investors.

There is no reason to believe that even if the man in the picture was in fact a member of board or a CEO or a founder, the actual value of the company would increase. Unless you realize this is the Republic of Korea, in which political-power-related corruption is still regarded to be prevalent. Although a lot of corruption cases (around those who are close to the president) are exposed recently, power-related corruption is less likely to happen today but you know the power of a belief: if everyone believes, something that isn’t true becomes, or incarnates to be, true.

Even those who bets their fortune on the stocks with political rumors do not believe their actual value will increase. Anyway reserve money seeks to invest on and there are stocks with rumors whose value rise threefold at the sudden of a month or two—who wouldn’t bet on them? My mother, currently betting on both Moon-related and Park Geun-hye-related stocks, retorted.

There is a history of these charged-with-rumors stocks, which are usually dubbed “theme stocks.” Let me entertain you for a moment, with one of these cases:

The history of “theme stocks” starts from late 80’s, after the stock market became closed with ordinary investors.

The most ridiculous cases came up with the birth of the theme stocks craze were the “Great Wall 4,” which gained attention with the government’s rapid establishment of diplomatic relationship with China. It was said that the Chinese government is going to raise windbreaks on the Great Wall and Daehan Aluminium (delisted in 2001) will supply all the chassis necessary to build them so the price of the stock soared. After that, Taewha (delisted in 1999), which had been producing rubber shoes, accompanied: the rumor said that the company in question will be supplying all the shoes for the construction workers.

Soon, Samlip General Food, which is still beloved for its steamed buns, joined the fad, due to the next rumor said that the company will supply steamed buns for the workers.

Yet, there is one, the most ridiculous one, left—Handok Pharmacy. Wait… a pharmacy company? Yup, the rumor said—*drum roll*—it will supply digestive medicines for the workers in case of an upset stomach.

True story. And the history continues.


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