The Three Kakao Brothers Who Fell From Hell...Why Ants Still Can't Leave After Shin Hyun-ah's IPO

Photo = Yonhap News It was the 'Three Brothers (Kakao · · )' who suffered exceptionally this year. It's because the stock price has barely been able to. The Kakao brothers 3 have not yet found a…

The Three Kakao Brothers Who Fell From Hell...Why Ants Still Can't Leave After Shin Hyun-ah's IPO

Photo = Yonhap News It's because the stock price has barely been able to. The Kakao brothers 3 have not yet found a significant growth engine, and the stock prices have risen at the beginning of the year due to various negative factors such as 'stock option disputes by executives', 'octopus listing', ' stalling of Kakao Talk', and the recent 'violation of the separation of bank and commerce'. The contrast was 'cut in half'.

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According to the Korea Exchange on the 18th, Kakao's share price based on the closing price on the 16th is 54,400 won, down 1.63% from the previous day. Kakao Bank fell 0.19% and Kakao Pay rose 0.49%. Despite the failure of the Kakao service, the three brothers' share price in Kakao, encouraged by the news of Saudi Arabian Crown Prince Bin Salman's investment in Kakao Entertainment, began to decline again. K Cube Holdings, a finance and insurance company affiliated with Kakao, a corporate group subject to restrictions on mutual investment (assets of 10 trillion won or more), violated the principle of separation of finance and industry and held shares in its subsidiaries Kakao (10.51% participation) and Kakao Games (0.91% participation). I see you have exercised your voting rights.

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Investor losses are spiraling as stock prices continue to fall. If you bought the Kakao Brothers 3 earlier this year, the loss rate would reach 52-65% based on the 16's closing price. During that time, the KOSPI index is down about 21%. but the decline was much greater. Kakao is referred to as a 'national stock' with over 2 million minority shareholders. As such, individuals can be seen to have suffered great losses. Expectations for future value are usually reflected in growth stocks like Kakao. For this reason, when interest rates rise, the discount rate for future value increases, resulting in an adjustment to the appraised value (valuation). Additionally, a service outage caused by a fire at the SK C&C Pangyo Data Center fueled the decline. It is regrettable to see executives and employees throwing a 'performance bonus party' at a time when stock prices are plummeting due to a variety of fraudulent issues.

Photo = Yonhap News The Fed has indicated it will not cut rates until 2024. This means that interest rates will continue to rise, at least until next year. Given the Fed's recent announcement of GDP growth rates for this year and next year, the possibility of a recession is also emerging. Following the performance announcement early last month, securities companies lowered their price targets for Kakao. An industry official said, 'Institutional investors are not very optimistic about Kakao's future vision.' This is interpreted to be due to institutional investors' propensity to prioritize macro-environments such as economic downturns and interest rate hikes when investing, while there is currently a lack of large-scale good news for each company. He added: 'In Kakao's case, a short-term rebound is possible, but it won't increase because there are expectations in terms of performance.' Lee Hong-jae, researcher at Hyundai Motor Securities, said, 'The fact that the valuation burden is still high and supply and demand may be somewhat diversified due to K-Bank's listing next year are negative factors for the share price Therefore, the inevitable increase in risks to the health of the assets will also act as a weakness'.

Even so, people diligently contain kakao. Kakao ranked in the top 3 in the stock market with the most net purchases by individuals this year (Jan 3-Dec 16). Net purchases amount to KRW 2.2872 trillion. It was also found that only net individuals bought Kakao Bank and Pay when both foreigners and institutional investors were losing money. Did he simply take advantage of the drop in the stock price to buy at a low point? Of course, there might be ants that are buying at the low point, but they would have felt that there was enough upside potential after a rough period. Kim Jin-goo, researcher at Kiwoom Securities, said, 'Recently, Kakao has been exposed to negative issues intensely, so if a positive signal comes out, there is plenty of room for an increase.' Lui said, 'We are open to expanding our business to web novel and webtoon based side videos, blockchain, robots, artificial intelligence (AI) and cloud.' Kakao Pay's acquisition of Loca Mobility has not yet been decided, but Lim Hee-yeon, a researcher at Shinhan Investment & Securities, said, 'The enterprise value of the acquisition of Loca Mobility is estimated at 9.4 trillion won, and even if the acquisition fails, the fair corporate value is estimated at 7.4 trillion won.' I did it. At the same time, we have increased our buy rating and target price from KRW 40,000 to KRW 73,000.