[Funding] Maxst Faces Commercialization Concerns Due to Reduced Capital Increase Scale

Expected to raise 52.7 billion KRW at board resolution... 36.6 billion KRW raised based on 1st issuance price
Operating fund budget reduced from 25 billion KRW to 10.2 billion KRW
M&A proceeding as planned... 'Game Content' important in the Metaverse era

[Asia Economy Reporter Hyungsoo Park] As volatility in the stock market increases, Maxst's fundraising plans have encountered setbacks. After deciding on a paid-in capital increase, Maxst's stock price fell, making it unlikely to raise funds at the expected scale.

According to the Financial Supervisory Service's electronic disclosure system on the 10th, Maxst set the first new share issuance price at 32,950 KRW. This is about 40% lower than the issuance price of 47,400 KRW expected at the board resolution on January 24. The fundraising amount also decreased from 52.7 billion KRW to 36.6 billion KRW.

Maxst, which was listed on the KOSDAQ market last July and raised funds, initiated a shareholder allocation capital increase in less than a year. The company made a bold decision to preoccupy the metaverse market, but external conditions such as inflation concerns and Russia's invasion of Ukraine hindered progress. Maxst's stock price was above 60,000 KRW before the capital increase but fell below 50,000 KRW within two months.

Founded in 2010, Maxst operates businesses including augmented reality (AR) development platforms, industrial AR solutions, and extended reality (XR) metaverse platforms. This year, Maxst is accelerating the commercialization of metaverse-related businesses. It expected that funds raised through shareholder allocation would provide momentum for business promotion.

However, due to the reduced fundraising scale, the operating fund usage plan was changed. At the time of the board resolution, 25 billion KRW was allocated, but after the first issuance price was set, it was reduced to 10.2 billion KRW. The company planned to invest 10 billion KRW in the metaverse portal business, down from the original 100 billion KRW budget. The metaverse portal will be built based on extended reality (XR) spatial construction technology, providing service tools that connect the real world and the metaverse world easily and quickly. Due to the budget reduction, the commercialization speed may be slower than planned.

While significantly reducing operating funds, Maxst cut merger and acquisition (M&A) funds slightly from 27 billion KRW to 26 billion KRW. It appears that M&A is considered necessary to enhance the completeness of the metaverse platform. The company explained that games are the most powerful way to attract users in the early metaverse market.

In the fierce competition to preoccupy the metaverse market, Giantstep, which decided on a capital increase ahead of Maxst, actually raised more funds than initially planned. While planning to raise 70 billion KRW, the issuance price increased due to stock price rises, allowing them to raise about 28 billion KRW additionally. Thanks to this, the M&A budget increased from 40 billion KRW to 68.5 billion KRW.

Last year, as expectations for the growth of the metaverse market increased, Giantstep and Maxst attracted attention and entered the domestic stock market. Giantstep was listed on March 24 and grew its corporate value from 103.7 billion KRW at the IPO price to 980 billion KRW in one year. Maxst, listed on July 27 last year, grew about threefold compared to the IPO price. Based on the IPO price, Maxst's market capitalization was 30 billion KRW larger than Giantstep's. Currently, based on stock prices, Giantstep's corporate value approaches 1 trillion KRW, surpassing Maxst's 500 billion KRW scale.

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