One Store CEO criticized for flip-flopping on IPO

Lee Jae-hwan, the CEO of One Store, speaks during a press conference announcing the company's initial public offering (IPO) plan at a hotel in Seoul, May 9. Courtesy of One Store

By Baek Byung-yeul

Lee Jae-hwan, the CEO of SK Group's mobile app market subsidiary One Store, is facing fierce criticism over flip-flopping regarding the firm's botched initial public offering (IPO), according to industry officials, Thursday. On Monday, Lee told reporters that One Store would push ahead with the IPO under any circumstances, but two days later, it announced that it would withdraw the listing, raising questions about his leadership and tarnishing its corporate image.

“It is unfortunate that SK Shieldus, an affiliated company, withdrew its listing, but we plan to keep pushing ahead with the listing because the industry is different from One Store and we think there is a lot of growth potential,” Lee told reporters during a press conference held in Seoul, Monday.

During the conference, Lee cited SK Shieldus, a subsidiary of SK Group's ICT investment company, SK Square, and a security company that provides both physical security and cybersecurity services. On May 6, the security company abandoned its IPO plan due to weak investor sentiment

But the One Store CEO assured that his company would have no problem with the listing as it has high growth potential, unlike SK Shieldus.

Kim Sang-don, the chief financial officer of One Store, also dismissed the controversy over the high valuation of the company, saying, “One Store's corporate value is somewhat undervalued because a fairly high discount rate has already been applied to the public offering price.”

However, the two executives' over-confidence didn't last two days as the company withdrew its listing on Wednesday.

“During the IPO process, we received positive reviews from most institutional investors about our fundamentals, including growth, profitability and stability. But, investor sentiment has been sharply dampened by deepening uncertainties in the global economy, so we decided to withdraw the listing,” a One Store spokesman said. “The company will push for a listing on the stock market again when the best time comes.”

Contrary to the company's explanation, an industry official in the local IT industry said that One Store was wrong in valuing itself too highly.

“One Store originally calculated its IPO price by comparing itself to Apple, Alphabet and Kakao. The company corrected its comparison by comparing itself to Tencent, Naver, Kakao and Nexon but its move can be interpreted as the company having tried to set its IPO price too high,” an official from a local IT company said, asking for anonymity.

Like Google Play and Apple's App Store, One Store operates a mobile app market in Korea. The company has been expanding its presence here, where Google and Apple have dominated, by receiving less commission fees from both app developers and mobile app users.

Market tracker Mobile Index's data showed that One Store had the second-largest share in Korea's app market, with 13.8 percent in 2021. The figure lagged far behind Google's share of 74.6 percent, but was greater than Apple's 11.6 percent.