Vessel, Small Shareholders Suffer from CB Bomb... Who Benefits?

Conversion Request for CB Volume Equivalent to 5% of Total Shares
Stock Price Plummets, CB Investors in Profit Zone
CB Investors Are Affiliates of Shin Hwan-ryul, CEO of The E&M

The stock price of Vessel, a KOSDAQ-listed company, plummeted. This is analyzed to be due to the risk of a large volume being released as the convertible bonds (CB) resold last week were converted. However, the related company THE E&M, led by CEO Shin Hwan-ryul, which acquired these CBs, is expected to profit since they purchased the CBs at a low price.

According to the Korea Exchange on the 24th, Vessel closed the day at 5,350 won, down 6.3% (360 won) from the previous day. During the session, it even showed an 8% decline.

The reason for Vessel's sharp drop is interpreted as the increased possibility of a large volume being released due to the conversion request of the CBs. On the 22nd, Vessel disclosed that convertible bonds worth 3.1 billion won of the 6th series CB were converted. Accordingly, 757,796 new shares are scheduled to be newly listed. This corresponds to 5.76% of the total existing issued shares. From the perspective of existing shareholders, the value of their holdings in Vessel shares is diluted by about 5%.

On the other hand, those converting these CBs are still in a profitable position. On the 17th, Vessel resold the 6th series CB worth 3.15 billion won at face value to a corporation named JH E&M for about 3.3 billion won. The conversion price of this CB is 4,109 won. With a premium of about 5% added, JH E&M actually acquired the CB at approximately 4,315 won per share. At the current price level of Vessel, they can still make a profit of over 20%.

The timing when JH E&M acquired Vessel's CB at such a low price was after THE E&M acquired Vessel. On the 6th, THE E&M became the largest shareholder by acquiring 1,663,536 shares of Vessel for 13.7 billion won. The price per share was 8,206 won. THE E&M did not directly acquire the 6th series CB held by Vessel but transferred it to JH E&M after purchasing the old shares from the previous largest shareholder at a price above 8,000 won. JH E&M is a company where CEO Shin Hwan-ryul of THE E&M served as an inside director until April 2020. After acquiring a certain listed company in 2018, CEO Shin had a close relationship with JH E&M by buying its CBs and shares.

Meanwhile, the new shares from the 6th series CB of Vessel, which were converted this time, are scheduled to be listed on the KOSDAQ market on March 9. Since CB holders can short sell from three trading days before the listing date, caution is advised regarding the potential volume bomb.

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