[미디어SR 임은빈 기자] Kakao’s stock split at a 5-to-1 ratio is drawing attention from small investors.
According to the Electronic Disclosure System of the Financial Supervisory Service on the 26th, Kakao will propose this as an agenda at the regular shareholders’ meeting on the 29th of next month, and after a final resolution, it will be listed in installments on April 15th.
The key is to divide the price per share from 500 won to 100 won. When the par value division is carried out, the number of Kakao shares will increase five times from 87.76 million 4620 shares to 435,232,100 shares.
An official from Kakao explained to Media SR, “We wanted to increase accessibility so that more diverse market participants can invest in Kakao by lowering the share price per share.”
With par value split, companies can increase the number of shares without capital increase and can expect additional inflows from individual investors by lowering the price per share. Apple and Tesla, which went through a stock split last summer, increased their stock prices on the first trading day after the stock split.
Of course, the par value split does not change the company’s market capitalization. In the short term, small shareholders’ participation can be expected to increase, but it is a general evaluation of industry insiders that the ripple power will decline after a certain point. After all, the long-term share price flow depends on the company’s performance.
Oh Hyun-seok, head of Samsung Securities Research Center, said, “It is a kind of making high-priced stocks at a low price, and it has the effect of inducing small shareholders to participate as shareholders.” There is an aspect of it, but this has a strong effect on supply and demand and psychological aspects, and there is no part that changes fundamentals.”
On the 26th, Kakao traded 56,2549 shares, including after-hours transactions. This is a 37% decrease from the volume of transactions 6 months ago (88,7733 shares). On the other hand, the stock price rose about 27% during this period.
Naver, which previously split the stock worth about 700,000 won into 5 to 1 on October 12, 2018, has fallen by 8% after three months. Samsung Electronics also carried out a 50:1 par value split on May 4, 2018, but after three months, the stock price also fell by 12%.
Face divisions occur frequently in the US as well as in Korea. Apple has conducted face-to-face splits five times, and Microsoft has carried out face-to-face splits nine times since 1987 until recently. In addition, Wal-Mart (9th) and Ford (8th) conducted face-to-face split several times.
Currently, in the case of Kakao, the largest shareholder, including the chairman of the board of directors Kim Beom-soo, has about 22.5 million shares (25.42%) as of the 19th of last month. As of the 25th, foreigners owned about 30.42 million shares (34.3%). After subtracting these from the number of issued shares, the remaining number of shares is 3567 million shares.
Kakao new shares are scheduled to go public on April 15th, and trading will be suspended from April 12-14. Kakao plans to propose the agenda at the shareholders’ meeting on the 29th of next month.