"Invest Now and Lose Everything": 14 High-Risk Stocks Facing Delisting

As efforts to expel underperforming companies from the Korean stock market are accelerating, more than 120 companies have been found to fall short of the financial authorities' criteria. In particular, 14 companies are facing a compounded crisis as they qualify as both penny stocks and have low market capitalization.

A total of 14 companies fell below both the penny stock and market capitalization criteria. Fantagio is one of these 14 companies. Its main artists include Cha Eunwoo and Kim Seonho.
Fantagio homepage.

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According to FNGuide, a financial information provider, as of the closing price on February 23, there were 124 listed companies that did not meet the delisting criteria announced by the Financial Services Commission.

The Financial Services Commission previously announced delisting reform measures twice-on January 21 and February 12-to enable prompt and stringent expulsion of underperforming companies from the domestic stock market. These measures were introduced as part of the Lee Jaemyung administration's policy to improve the health of the stock market.

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The Financial Services Commission stated it would delist companies that meet the following conditions: penny stocks with a share price below 1,000 won; companies with a market capitalization below 30 billion won on the KOSPI or below 20 billion won on the KOSDAQ; companies with complete capital erosion based on semiannual reports; those that have accumulated 10 or more penalty points; and those with annual sales below 10 billion won on the KOSPI or below 5 billion won on the KOSDAQ. Among these, the criteria for penny stocks, market capitalization, capital erosion, and penalty points will be applied starting in July.

Currently, there are a total of 58 penny stock companies. Since share consolidation can be used to raise the share price above 1,000 won, the Financial Services Commission stated that even if the price exceeds 1,000 won after consolidation, stocks will still be subject to delisting if their price is lower than the face value. Therefore, companies whose current share price is higher than the face value were excluded from consideration.

There are 77 companies that do not meet the market capitalization criteria and 3 companies that fall short of the sales criteria. For sales, the standard is only applied to companies with a market capitalization below 100 billion won on the KOSPI or below 60 billion won on the KOSDAQ, so bio companies with no sales but high market capitalization are excluded.

A total of 14 companies fell below both the penny stock and market capitalization criteria. Due to the difficulty in identifying capital erosion and disclosure violations at present, these factors were excluded from this analysis.

Among them, the company with the lowest market capitalization is iTalksy. As of February 23, iTalksy's closing price was 465 won, and its market capitalization was about 6.7 billion won.

iTalksy is a game publishing company. Its major game titles include "God of High School," "Cheonsangbi K," and "TRAHA." Last year, the company also established a joint venture in Ukraine to participate in reconstruction projects. However, its performance has continued to deteriorate, and the share price has been on a downward trend.

Fantagio is also one of the 14 companies. Fantagio is engaged in entertainment management. Its main artists include Cha Eunwoo and Kim Seonho. Recently, Cha Eunwoo has been embroiled in a tax evasion controversy involving around 20 billion won, and Kim Seonho has also faced suspicions regarding a single-person corporation and tax evasion. Fantagio itself was previously subject to a tax assessment of 8.2 billion won related to a value-added tax refund. As a result, Fantagio's share price fell from 2,450 won in 2024 to the 300 won range currently.

Among the companies that fall short of the sales criteria, Ascendio stands out. Ascendio posted provisional sales of 5.9 billion won last year. If it fails to achieve results again this year, it will be subject to delisting. Ascendio is also an entertainment management company.

The Financial Services Commission stated, "If underperforming companies are promptly expelled, we will simultaneously improve the listing system so that promising innovative companies can be smoothly listed in their place," adding, "We will pursue innovations on the scale of a complete redesign of the exchange, creating a market in which investors can invest with confidence."

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