Kakao rose slightly in the stock market plunge on the 26th due to the good news of the par value split. On this day, Kakao ended at 488,000 won, up 0.72% from the previous day. During the intraday, it rose by 3.6% and exceeded 500,000 won, but the transaction was closed with a reduced increase.
The US stock market plunged overnight, and most of the top stocks in the market cap fell to around 3%. Among the top 20 companies by market capitalization, Kakao and Kia were the only companies whose stock price rose on that day.
Kakao announced that after the closing of the regular market the day before, at 5 pm, the stock split will be conducted by dividing the price per share from 500 won to 100 won to expand the number of shares in circulation. While the par value split lowers the price per share, there is no change in corporate value such as market capitalization as the number of circulating stocks increases. However, as the stock price decreases, the accessibility of investors increases, and it is usually perceived as a favorable share price. For this reason, Kakao’s share price rose to 510,000 won in a single-price transaction outside of the hour the previous day.
An official from the financial investment industry who requested anonymity said, “It can be said that the stock market plunge has eliminated the issue of optimism.” Can be viewed as positive as it has been confirmed.”
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%.
[강봉진 기자 / 김정범 기자]
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