This undated file photo provided by Kakao Pay Corp. shows its headquarters in Pangyo, south of Seoul.
SEOUL, June 10 (Korea Bizwire) — Shares of South Korean mobile payment service Kakao Pay Corp. have plunged following the stock sales through block deal by Alipay Singapore Holdings Pte, which is the company’s second-largest shareholder.
Kakao Pay employees owning company stock, in turn, are seeing significant losses.
On Wednesday, Kakao Pay shed 15.19 percent to close at 89,900 won, moving under the 90,000 mark for the first time since its successful stock market debut in November of last year.
Kakao Pay announced that Alipay sold 5 million common shares in an after-hours trade.
The problem lies in the perception that there will be a continued overhang on the remaining shares held by Alipay, which may weigh further on the price of Kakao Pay shares.
This will indicate more losses for Kakao Pay employees owning company stock. They cannot sell their shares either, since shares are typically in a lock-up for one year from the day of the listing.
Kakao Pay allocated 3.17 million shares to employees at the time of the listing. Each employee invested roughly 343 million won (US$270,290) to buy stocks as there were 831 staff members at that time.
Samsung Securities Co. reflected Alipay’s overhang risk on Kakao Pay on Thursday, lowering the target of the company’s share price to 120,000 won from the previous 162,000 won.
H. M. Kang (hmkang@koreabizwire.com)
