Kage, 6 Consecutive Days of Decline... Chasing Buyers Left in Tears

[Asia Economy Reporter Koh Hyung-kwang] Since Kakao Games entered the stock market and recorded a 'ttasang-sang' (opening price formed at twice the IPO price on the first trading day, followed by two consecutive days of hitting the upper price limit), its stock price has been steadily declining. Recently, it has fallen for six consecutive trading days, with the stock price dropping nearly 25% during this period. Individual investors who belatedly chased the stock are now wearing a gloomy expression.

According to the Korea Exchange on the 21st, as of 10:40 a.m., Kakao Games was trading at 61,200 KRW, down 3.4% from the previous trading day. It has been on a downward trend for six consecutive trading days since the 14th. During this period, the stock price fell by 24.5%. After listing on the 10th and recording a ttasang-sang, the price soared to 81,100 KRW but has not rebounded at all since then.

The significant drop from the peak price has deepened the sighs of individual investors. From the day of listing until the 18th, individuals consecutively net bought Kakao Games for seven trading days. During this period, individuals net purchased 372.1 billion KRW worth of Kakao Games shares. Kakao Games was the most purchased stock by individuals in the domestic stock market during this period. This amount exceeds that of the second-ranked LG Chem (266.4 billion KRW) by more than 100 billion KRW.

On the other hand, foreign and institutional investors have been net sellers for seven consecutive trading days. Foreign investors sold 122.6 billion KRW, and institutions sold 118.5 billion KRW. Kakao Games was also the most sold stock by these groups during this period. The profit-taking sales by foreigners and institutions were fully absorbed by individual investors.

Even on the 14th, when Kakao Games' streak of hitting the upper price limit stopped, the pattern was the same. Foreign investors sold 84.2 billion KRW, and institutions sold 48.5 billion KRW in one day. Conversely, individuals net bought 170.8 billion KRW worth of Kakao Games shares on the same day. The trading volume exceeded 20 million shares that day, indicating that individuals mainly purchased shares near the peak price.

Experts have suggested a fair value for Kakao Games' stock price in the range of 30,000 to 40,000 KRW. Although fluctuations will continue, they expect the downward trend to persist. Kim Chang-kwon, a researcher at Mirae Asset Daewoo, said, "Kakao Games' 12-month forward price-to-earnings ratio (PER) is between 50 and 60 times, which is higher than NCSoft, the leading domestic game industry stock at 18 times, and Netmarble, which surged to 45 times due to expectations of benefiting from the New Deal Fund." He added, "Once the IPO fever subsides, the stock price will gradually converge to the consensus (average estimate by securities firms)."

Blind faith in IPO stocks began with SK Biopharm. SK Biopharm, which had a market capitalization of about 3.8 trillion KRW, recorded three consecutive days of hitting the upper price limit after its IPO, pushing its market cap up to 19 trillion KRW. This even surpassed the market cap of its parent company SK (which was 18.75 trillion KRW at the time). Experts analyze that the surge in SK Biopharm led to a massive inflow of individual investors' buying into Kakao Games as well. A financial investment industry official advised, "Given the recent heated investment enthusiasm for IPO stocks, it is necessary to approach investments in newly listed stocks more cautiously."

This content was produced with the assistance of AI translation services.