Fear of Forced Liquidation Spreads... DYPNF Hits Lower Limit Price

In the wake of the sharp plunge triggered by Soci?t? G?n?rale (SG) Securities, KOSDAQ-listed company DYPNF hit the lower price limit due to forced liquidation.

According to the financial investment industry on the 13th, DYPNF fell to the maximum price limit on the previous day. Shindaeyang Paper, a company listed on the KOSPI market, also dropped 24.64% compared to the previous day.

When DYPNF and Shindaeyang Paper plummeted, SG and Morgan Stanley were among the top selling brokers.

A DYPNF official stated, "We have received many inquiries about the excessive stock price decline," and explained, "There are absolutely no internal factors that could negatively affect the stock price." He added, "The business is progressing without any issues," and "The first quarter report will be submitted within the deadline."

The official also explained, "It is estimated that the short-term stock price volatility is significant due to the impact of forced liquidations recently occurring in the stock market," and "There are no legal issues, and the company's intrinsic value remains unchanged, so we ask investors to keep this in mind."

An individual investor presumed to be a DYPNF shareholder said, "This decline is unrelated to the recent plunge incidents involving Seongwang and Daesung Holdings last month," and added, "The forced liquidation happened after investing using leverage (debt)."

Market experts advised that amid growing wariness of forced liquidations, a 'fire sale' phenomenon often occurs where investors rush to sell first when stock prices sharply fall. A financial investment industry official said, "At the start of trading, when stocks with high credit balance ratios sharply drop, forced liquidation is the first suspicion," and added, "When forced liquidations occur in some accounts causing stock prices to fall, it leads to collateral shortages in other accounts."

Another official expressed concern, saying, "Simply using leverage through CFD accounts is not illegal," and "As regulatory improvements on CFDs are implemented quickly, temporary confusion is inevitable."

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