Executives buy Posco stocks in symbolic gesture

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Executives buy Posco stocks in symbolic gesture

Executives at steelmaker Posco have started snapping up the company’s shares in an effort to take more responsibility for management and help stabilize prices after domestic industry players have found themselves rocked by high levels of volatility in recent months due to economic uncertainty, the company announced yesterday.

A total of 73 high-ranking executives participated in the move, including CEO Chung Joon-yang and President Choi Jong-tae. Each purchased between 50 and 100 shares of Korea’s largest steelmaker for a total of 4,531 shares.

Chung and Park each bought 100 shares in a bid to inspire other employees to follow suit, officials added. With yesterday’s acquisition, Chung owns 1,714 shares and Park 1,886, while its executives possess a combined 24,602.

“The stock price of [local steelmakers] plunged recently due to the economic downturn,” said a Posco employee. “Executives bought the company’s shares to reassure the public that prices won’t drop any further. The move is aimed at stabilizing share prices.”

Posco officials said the company’s shares are undervalued due to the economic downturn, but have much room to grow in light of forecasts that both the domestic and international steel industry are slowly rebounding. The company’s announcement helped its stock price jump by 6,500 won, closing at 418,500 won yesterday.

Posco in June started building the No. 3 Finex plant at its Pohang facility in North Gyeongsang. When completed in July 2013, it will become the largest non-blast furnace hot metal production facility in the world with an annual production capacity of 2 million tons. The steel company claims the 1.3 trillion won ($1.16 billion) plant will be environmentally friendly.

In November, Chung signed an MOU with Eric Schmidt, the executive chairman of Google, to exchange core capabilities with the aim of establishing a new business paradigm based on global operations, creative collaboration and highly skilled workers. The partnership drew much attention over what kind of results it would yield.

By Kim Mi-ju [mijukim@joongang.co.kr ]

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