Kakao Pay, even the public offering price was broken… New lows every day on ‘weak growth stocks and concerns about selling in bulk’
Kakao Pay recorded a share price of less than 90,000 won in the midday on May 10th. Investor sentiment toward growth stocks has weakened, and concerns about overhangs (sell-to-sell stocks) overlapped with the lifting of the mandatory holding period.
On the afternoon of May 10, Kakao Pay closed at 91,900 won, down 2.03% from the previous trading day. Immediately after the opening, the drop expanded to 4.37%, recording 89,700 won, and the public offering price of 90,000 won collapsed for the first time since listing.
Kakao Pay was listed as an offering of 90,000 won on November 3, last year, and was selected as a stock with high growth potential, forming an initial of 180,000 won and rising to 230,000 won on the same day. On November 30, last year, it also recorded an all-time high of 245,500 won. However, in recent years, new lows have been marching down to the 90,000 won level in just six months, and the glory of the past has faded.
On the 3rd, the mandatory holding of 76.24 million shares of Kakao Pay, including 62.35 million shares owned by Kakao, the largest shareholder, and 13.89 million shares, allocated to third parties, including Alipay, the second largest shareholder, was lifted. This is equivalent to 57.57% of the total listed stocks (132,43,8691 shares).
Of these, 62.35 million shares owned by Kakao have been confirmed for one year by adding 6 months of legal protection to 6 months of voluntary protection. However, as the obligation to hold about 12 million shares, which is part of the 51.10 million shares owned by Alipay, the second largest shareholder, was immediately lifted, anxiety that Alipay could make a profit by selling in large quantities persists, increasing investor anxiety. all.
At that time, Kakao gave a principled answer that it was continuing cooperation with Alipay from a long-term perspective. In the market, considering that Alipay did not sell 37.12 million shares that were not initially tied up as a protectorate, the possibility of abruptly disposing of the shares is slim. However, it is also raising the possibility of disposing of some of its shares through a block deal (mass trading after hours).
External conditions are also putting downward pressure on Kakao Pay’s share price. Investor sentiment toward growth stocks in general deteriorated due to the US central bank’s (Fed) big-step rate hike (0.5 percentage point), inflation due to the prolonged war in Ukraine, and China’s coronavirus lockdown measures. When interest rates rise, the buying trend of risky assets such as stocks tends to decrease, and as concerns about an economic downturn intensify, anxiety about the future of growth stocks increases, causing stock prices to fall sharply.
As the atmosphere where Kakao Pay could not withstand the daily decline continued, SK Securities lowered its target price from 145,000 won to 110,000 won. Choi Gwan-soon, an analyst at SK Securities, said, “It is positive that financial services sales such as loan relays have rebounded while solid growth of payment services is expected due to the expansion of offline payment channels even after the corona virus. We are lowering our target price as profitability improvement is being delayed due to continued losses.”
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