Employees Earn 170 Million KRW Each... 'This Company' Employees Achieve 1400% Profit on Stock Options

Over 1400% Increase Compared to 1,500 Won in 2nd Round
Stock Options Issued to Secure Talent During Business Growth Phase
Criticism That "Only a Very Small Number Gain Large Profits"

The subscription-based e-book platform 'Millie's Library' has attracted attention to the stock options granted to its employees as it completes its initial public offering (IPO).

[Photo by Millie's Library]

Millie's Library announced on the 10th that it will issue 280,900 new shares through the exercise of stock options. This accounts for about 3.5% of the total issued shares (approximately 811,000 shares).

Stock options give the right to purchase company shares at a predetermined price (exercise price) regardless of the market price. As a result, employees are expected to gain profits exceeding 1,400% through exercising their stock options.

Since its founding, Millie's Library has granted stock options to employees six times in total. The stock options exercised this time were granted in April 2019 (2nd round) and March 2020 (3rd and 4th rounds). The exercise prices were 1,500 KRW per share (199,000 shares) and 3,000 KRW per share (90,000 shares). A total of 35 employees (including duplicates) and one external expert exercised their stock options.

Millie's Library was listed on the KOSDAQ market on September 27 with a public offering price of 23,000 KRW, and the closing price as of the 16th was 22,900 KRW. If the stock options are sold at the current stock price, it represents an increase of over 1,400% compared to the exercise price of the 2nd round (1,500 KRW). Simple calculations suggest that the average capital gain per employee could reach approximately 170 million KRW.

However, the mandatory holding period is set at 3 years for the 2nd and 4th rounds, and 2 years for the 3rd round. Therefore, employees who acquired shares through exercising stock options will be able to exercise their options starting from October 2025, two years from now at the earliest.

Consequently, the remaining stock options that employees can exercise amount to 259,500 shares. This includes 82,000 shares from the 5th round (exercise price 7,000 KRW) and 147,500 shares from the 6th round (exercise price 12,810 KRW), which also hold significant potential for capital gains.

Most of these stock options (1st to 5th rounds) were issued before being acquired by Genie Music, a subsidiary of KT Group, in September 2021.

This is interpreted as Millie's Library offering stock options as compensation to secure talent such as developers during its business growth phase, despite relatively short employee tenure.

Some critics point out that only a small number of employees will gain substantial profits from this listing. The stock option exercisers are a small group of employees who joined Millie's Library in its early days. The number of employees grew from 11 in 2017 to 30 in 2018, and 65 in 2019. As of the first half of this year, the number of employees reached 148, more than ten times the initial count.

Millie's Library first introduced a monthly subscription e-book service in Korea in 2017. As of July, it has about 6.4 million subscribers and partnerships with 1,900 publishing companies. It was acquired by Genie Music under KT Group in 2021 and became part of the KT Group affiliates.

Last year, Millie's Library recorded sales of 45.8 billion KRW, a 58.8% increase from the previous year, and achieved an operating profit of 4.17 billion KRW, turning profitable.

In the first half of this year, it posted sales of 26 billion KRW and operating profit of 5 billion KRW, achieving an operating profit margin of 19%.

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