Big Tech Hits 52-Week Low... Market Cap Evaporates by 41 Trillion Won

Naver Stock Hits Lowest Since June 2020
Kakao Also at Lowest Since November 2020
Market Cap Plummets from 112 Trillion to 71 Trillion Won

[Asia Economy Reporter Hwang Yoon-joo] Naver and Kakao have slumped, recording consecutive 52-week lows following the Federal Reserve's giant step rate hike.

According to the Korea Exchange on the 19th, Naver closed at 237,500 won, down 2,500 won (1.04%) on the 17th. During the session, it hit 232,500 won, marking a 52-week low for five consecutive trading days. This is the lowest level since June 15, 2020 (235,000 won).

Kakao closed at 72,200 won, down 100 won (0.14%). During the session, it dropped to 70,200 won, marking the lowest level since November 11, 2020.

[Image source=Yonhap News]

Due to the sharp decline in stock prices, the market capitalization of Naver and Kakao has evaporated by more than 40 trillion won since the beginning of the year.

Based on the closing price, Naver's market capitalization was recorded at 38.9617 trillion won. Kakao's was calculated at 32.1162 trillion won. The combined market capitalization of the two companies decreased by a staggering 41.1655 trillion won, from 112.2434 trillion won at the end of last year to 71.0779 trillion won on the 17th.

The reason why the stock prices of Korea's leading big tech companies are struggling is attributed to downward pressure on the stock market due to high-intensity tightening and weakened investor sentiment toward growth stocks. On the 15th (local time), the Fed raised the benchmark interest rate by 0.75 percentage points. Fed Chair Jerome Powell indicated in a press conference that a 0.75% hike in July is possible, showing a commitment to high-intensity tightening.

During periods of interest rate hikes, the discount rate on future earnings increases, which is unfavorable for growth stock prices. Since the Fed began raising the benchmark interest rate in earnest in March, the Nasdaq index has also undergone significant corrections and has currently fallen to its lowest level since September 2020.

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