Blockbuster IPO shares fear price drop this week as lockdowns expire
A stock freeze is a device designed to prevent large shareholders from selling their stock too quickly and causing a sudden change in stock prices after a company goes public.
Institutional investors are expected to trade around 11 trillion won ($ 9.3 billion) of newbie shares in Kospi this year, they said. The list includes KakaoBank, Krafton and SKIET.
According to data from financial monitoring services, the three-month blocking period of online lender KakaoBank ends on November 8.
Existing shareholders of KakaoBank – such as gaming company Netmarble and Skyblue Luxury Investment, a subsidiary of Tencent Holdings – will then be free to sell their 20.3 million class shares. The shares together are worth 1.2 trillion won, calculated by the closing price of 57,200 won per share on Friday.
From November 10 after a three-month block, the big shareholders of the gaming giant Krafton are free to sell their 4 million shares. Assets were worth 1.8 trillion won at Friday’s close at 451,000 won per share.
SKIET, a battery materials subsidiary of SK Innovation, is expected to experience a higher fluctuation in its stock price than KakaoBank and Krafton, experts say.
With its six-month lock-up ending Nov. 11, the company’s major shareholders will be able to sell their 52.9 million shares, worth 7.7 trillion won, calculated using Friday’s closing price of 145 500 won per share.
“Since SKIET’s trading volume had already fallen to almost half of August’s, institutional sales would cause a bigger shock to the share price. The second largest shareholder, Premiere Superior, owns 8.8% of the shares and is currently making 200% of the rate of profit (and is very likely to sell its shares), ”Ko Kyung-beom, researcher at Yuanta Securities, said in a report. . .
Market insiders warn that once the lockdowns end, the initial IPO pop – driven by liquidity from the pandemic – will fade. Companies that debuted in the market this year with IPO prices that are high relative to their fundamentals could see their stock prices plunge deeply and suffer heavy losses for retail investors, they said.
By Byun Hye-jin ([email protected])