Anna Jiwon Park has been covering the politics at The Korea Times since the summer of 2024, when she joined the press pool for the Office of the President in Korea. Prior to that, she spent about five years reporting extensively on financial markets, regulatory authorities and the financial industry. She joined The Korea Times in 2019 after spending eight years as a broadcast journalist at Arirang TV, Korea’s leading global broadcaster, covering politics, defense and culture.
Kakao Pay shareholders perplexed by Alipay's block deal
Kakao Pay management and key officials from the Korea Exchange (KRX) and local brokerage industry celebrate the listing of Kakao Pay on the main benchmark KOSPI market at the lobby of the headquarters of the KRX in Yeouido, Seoul, on Nov. 3, 2021. Newsis
By Anna J. Park
By Anna J. Park
Small shareholders of Kakao Pay are suffering from plunging stock prices, following news that the firm's second largest shareholder sold off five million shares in a block deal.
The stock price ended at 89,500 won ($71.23), falling 15.57 percent on Wednesday, as the company officially disclosed earlier in the day that Alipay Singapore Holding ― the second largest shareholder of the company ― dumped five million shares on Tuesday, which amount to 3.77 percent of Kakao Pay's entire stocks.
The company explained that the five million shares sold by Alipay through the block deal are about 10 percent of Alipay's own stake in the Korean fintech company, adding that Alipay remains the second largest shareholder as well as its strategic investor, holding some 46 million shares or a 34.72 percent stake in the Korean company. A three-month lock-up period will be applied to the remaining stocks.
The two company's partnership began in 2018 and remains strong, despite the block deal sale, Kakao Pay officials said.
Despite the company's explanation, the payment fintech company's market cap shrank by more than 2.1 trillion won in a single day to 11.8 trillion won.
Since the company's IPO in early November last year, the firm's shares have been on a declining trend, despite fluctuations. Wednesday's closing price is less than half of the firm's closing price of 193,000 won logged on November 3, the first day of its listing on the main benchmark KOSPI market.
The management of Kakao Pay stirred up controversy as they exercised their stock options last December, just a month after the company's listing on the stock market. They collectively earned 87.8 billion won ($73 million) through the sale of the stocks, but the disposal was interpreted as a signal of the management's distrust in their company's valuation, leading to mounting criticism from small shareholders who sustained losses after betting on the fintech company.