Watchdog recognizes Gmarket for model overseas share sale

Gmarket Inc., Korea’s largest consumer e-commerce Web site, was cited by the National Intelligence Agency as an exemplary case of a Korean company listing shares on overseas stock markets. The agency, in its report on “guidelines for local venture technology startups going public abroad,” said Gmarket set a textbook example for how a Korean tech company could launch a successful initial public offering abroad.
“GMarket established a good precedent for other Korean technology startups planning to go public abroad to follow later,” said the report. Gmarket, which listed its shares on the Nasdaq in June 2006, first succeeded in marketing the company to potential investors here and abroad and in earning their trust.
“A lot of top executives of local tech venture startups used to be engineers, who have excellent minds in technology but completely lack marketing skills to appeal to investors,” said the report.
But Gmarket was different. The company managed to attract investment from Oak Investment, the biggest U.S. venture capital firm, nearly two years before it went public, raising recognition of the company among U.S. investors and establishing a firm groundwork for stock listing in the United States.
The report also advised Korean tech firms to prioritize market potential rather than just attracting funds, saying Gmarket did not focus on the short term by issuing too many shares.
“If you issue too many shares suddenly, the firm’s share price is bound to go down for a while and it would increase costs for the firm to remain listed on the market,” said the report.

By Choi Joon-ho JoongAng Ilbo [hawon@joongang.co.kr]