Is the Ttassang Myth Over Now?...Is the IPO Boom Coming to an End?

No Stocks Have Achieved Double Opening Price Since Iljin Hysolus on September 1
K Car's Subscription Deposit Only 366.8 Billion KRW
IPO Performance Sluggish Amid Market Slump...Focus Needed on Fundamentals

[Asia Economy Reporter Gong Byung-sun] The 'Ttah-sang' phenomenon of IPO stocks that heated up the domestic stock market this year has not appeared for over a month. As the money flowing into IPO stocks decreases, there is an analysis that the enthusiasm for IPO stocks is cooling down.

According to the Korea Exchange on the 16th, 19 stocks have been newly listed since last September, but Iljin Hysolus is the only one that recorded a Ttah-sang. Since Iljin Hysolus was listed on the 1st of last month, Ttah-sang stocks have been missing for a month and a half. Ttah-sang is a newly coined term meaning that the opening price forms twice the public offering price and then rises to the upper limit on the listing day.

The performance of stocks expected to achieve Ttah-sang is also sluggish. The performance of K Car, which was listed on the 13th, belies its title as the number one player in the domestic used car market. K Car's final public offering price was decided at 25,000 won after being lowered once during the public offering process, but even the opening price was formed at 22,500 won, 10% lower. In addition, the stock price of Lotte Rental, which was listed on August 19, never exceeded the public offering price of 59,000 won even once. Hyundai Heavy Industries, once considered the leader in the shipbuilding industry, also expected Ttah-sang, but the opening price was 85% above the public offering price, and the stock price increase rate on the first day was only 0.45%.

Number of Ttah-sang Stocks Increased from 2 in 2019 to 10 in 2020... Already 15 Ttah-sang Stocks This Year

The Ttah-sang craze for IPO stocks began last year. The number of Ttah-sang stocks, which was only two in 2019, increased significantly to 10 last year. SK Biopharm, which was listed in July last year, even recorded 'Ttah-sang-sang-sang' by hitting the upper limit for three consecutive trading days after listing. This year, a total of 15 stocks recorded Ttah-sang, surpassing last year, with 2 in January, 2 in February, 2 in March, 1 in April, 1 in May, 2 in June, 1 in July, 3 in August, and 1 in September.

However, the IPO boom that continued until the first half of this year has been lackluster in the second half. SK IE Technology and SK Bioscience, which were listed in the first half of this year, set new records by gathering 80.9 trillion won and 63.6 trillion won in deposits submitted to receive IPO allocations, respectively, but K Car, listed this month, gathered only 366.8 billion won in deposits. Krafton, expected to be a leading game stock when it was listed in August, also gathered only 5.0358 trillion won in deposits.

The sluggishness of IPO stocks despite the listing of large stocks such as Hyundai Heavy Industries and Krafton is interpreted as due to the sluggish stock market. The KOSPI index, which rose 14.73% in the first half of this year, has been falling every month, with declines of 2.86% in July, 0.10% in August, and 4.08% in September. This month, it also fell below the 3,000 mark for the first time in about six months.

Experts pointed out that since Ttah-sang itself is a rare phenomenon, excessive investment in IPO stocks should be avoided. Hwang Se-woon, a research fellow at the Korea Capital Market Institute, said, "IPO investment cannot be considered risky, but expecting Ttah-sang like last year and this year is somewhat unreasonable," adding, "It is important to focus on the fundamentals of the company when examining IPO stocks."

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