KakaoPay Block Deal Risk Persists... Weakness Over Two Days

Kakao Pay Falls 15% Previous Day
Continues Weakness Over 1% Early Today
Still Holds 34% Stake in China's Alipay (Second Largest Shareholder)

[Asia Economy Reporter Ji Yeon-jin] Kakao Pay has been showing weakness for the second consecutive day due to a large-scale stock sale by its second-largest shareholder.

According to the Korea Exchange on the 9th, Kakao Pay recorded a decline of over 1% in the early trading session. Following a sharp 14.35% drop the previous day after Alipay Singapore Holdings, a subsidiary of China's Ant Group and the second-largest shareholder, sold 5 million shares (3.77%) out of its 51,015,105 shares through a block deal, the stock has continued to fall for two days. As the World Bank mentioned the possibility of a global economic recession, the domestic stock market remained weak, and the block deal risk further dampened investor sentiment significantly.

Alipay still holds a 34.72% stake (46,015,105 shares) in Kakao Pay as the second-largest shareholder, and block deals by the second-largest shareholder may recur in the future. Jo A-hae, a researcher at Samsung Securities, said, "Recently, reports indicate that the Chinese government is easing pressure on big tech companies, and Ant Group is resuming business, such as launching an internet bank in Singapore yesterday." He added, "Although the purpose of Alipay's sale has not been disclosed, it appears that Ant Group (Alipay's parent company) needs investment funds as it restarts its business."

Since its listing in November last year, Kakao Pay's stock price soared to 248,500 KRW, but it sharply declined after former CEO Kim Young-jun and other executives sold their shares, realizing huge profits. At that time, criticism from investors expanded to the Kakao Group, dragging down the stock prices of Kakao Bank and Kakao as well. Furthermore, with the continued weakness of growth stocks since early this year, Kakao Pay's price fell to 85,000 KRW on the 15th of last month, below the IPO price of 90,000 KRW. All Kakao Group stocks, including Kakao, Kakao Bank, Kakao Games, and Neptune, plunged to 52-week lows last month.

Compared to the beginning of the year, the market capitalization of these group stocks has evaporated by 37.8853 trillion KRW. Kakao dropped from 5th to 9th place in the KOSPI market, while Kakao Bank and Kakao Pay fell from 10th and 14th to 18th and 30th place, respectively.

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