Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
Will Samyang Foods defy 'emperor stock' curse?
A customer selects a bundle of Buldak noodles at a supermarket in Seoul, March 26. Yonhap
By Lee Yeon-woo
Sky-high share prices lead to thinner trading, weaker liquidity
The shares of Samyang Foods, the maker of the globally popular Buldak instant noodles, recently surpassed 1 million won ($723.43), earning the coveted title of "emperor stock."
While the price has already surged tenfold in two years, brokerages scramble to raise their target prices, with some estimates reaching as high as 1.7 million won.
Few believe the ride is over.
Choi, a financial industry worker based in Yeouido, is confident the rally has room to continue. The 33-year-old said he has been recommending the stock to friends and colleagues since it was in the 600,000 won range.
Yet, his advice has often been met with lukewarm responses. "With a single share now priced at over 1 million won, it’s understandably a bit burdensome to buy in at this point," he added.
As the stock shows no signs of cooling, attention is turning to whether Samyang Foods will soon fall victim to the so-called "emperor stock curse."
In Korea’s stock market, companies whose shares surpass the 1 million won mark have often faced sharp declines afterward, leaving peak-time investors to endure years of losses.
For example, gaming firm NCSOFT surpassed the 1 million won threshold in January 2021 amid a boom in game-related stocks. But after a series of underperforming game releases, its share price has since tumbled to around 150,000 won.
Similarly, LG Household & Health Care, which held its emperor stock status for five years, has seen its stock drop to the 320,000 won range since 2022, weighed down by weak performance in China and sluggish domestic consumption.
No former emperor stock has ever reclaimed its title once it fell below the mark.
As Choi’s case shows, when a stock price climbs too high, trading volume tends to shrink, and liquidity worsens. It can also be seen as a psychological red flag — a signal of a market top fueled by overheated investor expectations.
To avoid this slump, some companies opt for stock splits to make shares more accessible and boost liquidity. But splits can also lead to the results investors might wish to avoid. Market watchers note that retail investors drawn in by the lower price tend to exit quickly if expected returns don’t materialize, weakening overall buying pressure.
There’s also a perception that a high share price reflects greater corporate value, weakening the general buy sentiment.
In May 2018, Samsung Electronics brought its stock down to the 50,000 won range per share, following a peak of over 2.5 million won. By the next month, the number of retail shareholders had more than doubled — but the share price dropped 11 percent.
For now, Samyang Foods appears to be holding off, with a company official saying a stock split is not currently under consideration.
Going forward, market watchers say the real test will be performance.
"It’s true that Samyang Foods’ portfolio is heavily reliant on Buldak noodles, and concerns about it being a one-hit wonder haven’t fully disappeared," a brokerage official said on condition of anonymity. "But the brand has firmly established itself among younger consumers, and with strong earnings, the company still has room to grow."