Theborn Korea shares in freefall despite CEO's apology

Theborn Korea CEO Paik Jong-won announces a plan to suspend TV and online broadcast appearances in a video uploaded to his YouTube channel, Tuesday. Captured from YouTube

Theborn Korea shares have been on a sharp downtrend for days, battered by a slew of product quality scandals and alleged mismanagement, market analysts said Thursday.

Company CEO Paik Jong-won said recently that he would indefinitely suspend TV and online broadcast appearances, pledging a support package of 5 billion won ($3.5 million) for its franchisees. However, investor sentiment remains deeply negative.

The analysts say the shares will not be able to find a breakthrough, given “stock overhang,” a large block of shares that could significantly depress the stock price if released into the market all at once.

The share lock-up period of six months expired as the company went public on Nov. 6, 2024. This means that more than 4.8 million shares, or about 33 percent of the total, held by Paik and other firm executives will be able to be traded. Also up for release are 282,000 shares held by institutional investors.

According to the Korea Exchange, Theborn Korea shares closed at 26,400 won on Wednesday, down about 2 percent from the previous session.

This was the lowest closing price since the company's initial public offering (IPO), more than 22 percent lower than the IPO price of 34,000 won and a dramatic plunge from the previous peak of 64,500 won on the day of the IPO.

On Thursday, the shares closed at 26,750 won, up 1.33 percent from the previous session.

The firm is facing a slew of scandals.

Paik and the company are under police investigation for false advertisement, stemming from allegedly promoting imported shrimp as locally produced. According to police, this is in violation of a law governing food ingredient labeling.

Paik made a public apology on Tuesday for the incidents, his third apology since March.

“From now on, I will focus on the growth of Theborn Korea as a CEO, no longer as a TV personality,” he said.

A KB Securities report said Paik’s recognition as a public figure can strengthen brand power, but reputational risks can be just as significant.

“Paik’s popularity can be a double-edged sword. In times of success, the company will soar, but when things go south, the downfall will be just as dramatic,” the report said.