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.
Krafton, KakaoBank, SKIET shares face expiration of lockup periods
From left, Krafton Chairman Chang Byung-gyu, KakaoBank CEO Yun Ho-young, SKIET CEO Rho Jae-sok / Courtesy of each company
By Anna J. Park
By Anna J. Park
Share prices of mobile-based KakaoBank and global online game company Krafton both declined Monday, recording falls of 2.8 percent and 2.11 percent respectively, amid concerns over the expiration of lockup periods.
Despite facing a similar overhang issue, SK's materials subsidiary SK IE Technology (SKIET) saw its stock end a surprising 8.93 percent up at the close of trading, dispelling lockup expiration worries.
Both KakaoBank and Krafton also saw a slight rebound in the afternoon session, somewhat reducing the shock from earlier trading.
KakaoBank stock fell 8 percent in the early session from the negative impact of the expiration of its three-month lockup period, following its IPO in August. However, it managed a recovery to just 2.8 percent below the start, thanks to strong buying by foreign and retail investors.
With the expiration, 20 million shares, or 4.2 percent of KakaoBank's listed shares held by various institutions ― 7.6 million held by game company Netmarble, 7.6 million by Skyblue Luxury Investment and the remainder with institutional investors ― are now free to be traded.
Krafton, which also made its KOSPI debut in August is facing a potential huge selloff when its three-month lockup period expires Wednesday. Four million shares or 8.3 percent of total listed ― including 1.69 million held by Altos Ventures, 1.35 million by institutional investors, and 500,000 shares at Saehan Venture Capital ― will be available for trading.
While the gaming company's stock still hovers below that of its IPO price, institutional investors will be mulling over whether to cash in immediately or wait and see if the performance of the firm's newest game, “New State,” to be launched in most countries Thursday, a day after the expiration, will give the share price a boost. The company said over 50 million people globally have already signed up during a pre-registration period, raising the market's expectations over the firm's performance. ?
Because of such expectations, Krafton's share price, which dived to 428,000 won ($361) Monday morning, recovered and finished at 441,500 won, slightly down from the listing price.
SKIET, meanwhile, has the largest amount of shares to be released from lockup at 52 million, but despite similar downward pressure saw a price boost. This is likely due to SK On holding 43 million of the shares and these are unlikely to be put up for sale for the time being. Any downward pressure comes from the 6.2 million shares held by local private equity firms as well as 3 million in the hands of institutional investors.
However, analysts say positive impacts from a globally rising demand for rechargeable batteries and the current trend towards a wider use of electric vehicles could outweigh this downward pressure which they feel will be temporary.
“Given that the six-month lockup expiration falls Thursday, SKIET stock may face a temporary burden in stock supply. Yet, since there has been no change in mid- to long-term trends and vision for the firm, November, could provide good timing for a stock purchase,” said Cho Hyun-ryul, an analyst at Samsung Securities.