LG Energy Solution Drops to 3rd in Market Cap... Foreign Investors Leave as Short Selling Restrictions Lifted

[Asia Economy Reporter Kwon Jae-hee] After the short-selling restrictions were lifted, foreigners launched a large-scale short-selling attack on LG Energy Solution.

According to the Korea Exchange on the 21st, as of the 18th, LG Energy Solution's market capitalization was 89.388 trillion KRW, a decrease of about 29 trillion KRW from the initial market cap of 118.17 trillion KRW on the first day of listing. The main culprit behind the sharp stock price drop(?) is foreigners. From February 15th to the 18th of this month, foreigners continued net selling for 22 consecutive trading days.

In particular, after its inclusion in the KOSPI 200 on the 10th, it became a target of short-selling forces, significantly increasing the volume of sales. On March 11th alone, foreigners net sold 188.2 billion KRW, 297.6 billion KRW on the 12th, and 112.3 billion KRW on the 15th. Since short-selling was allowed, a total of 826 billion KRW worth of short-selling orders poured out over five trading days. This ranks first combined in KOSPI and KOSDAQ, showing a large gap compared to second place Samsung Electronics (179.5 billion KRW) and third place HMM (120.3 billion KRW).

During this period of concentrated short-selling, LG Energy Solution's stock price fell 8.5% from 417,500 KRW (closing price on the 10th) to 382,000 KRW (closing price on the 18th). This is the third-largest decline among the top 100 companies by market capitalization, following Amorepacific (-11.18%) and LG Household & Health Care (-10.47%).

Despite the stock price slump due to short-selling, LG Energy Solution's business competitiveness is highly evaluated. There is growing expectation that it will recover after an adjustment period. According to financial information provider FnGuide, the average target price for LG Energy Solution suggested by 13 forecasting institutions is around 520,000 KRW.

Kim Hyun-soo, a researcher at Hana Financial Investment, analyzed, "Based on the first-mover advantage in the U.S. market, LG Energy Solution's profitability is expected to gradually improve," adding, "Operating profit will increase to 1.6 trillion KRW in 2023 and 2.4 trillion KRW in 2024."

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