KakaoBank slumps as lockup period ends, and 1 more looms

KakaoBank shares slipped Monday with some institutional investors offloading shares as the lockup period expired. The bank closed at 55,600 won ($47), down 2.8 percent.

Under a lockup agreement set during the initial public offering (IPO) process, institutional investors agree not to sell their holdings for a set period of time. The agreement is intended to prevent heavy selling of shares right after listing.

Three-month lockup period expired for some shareholders of KakaoBank on Saturday and the effects were reflected as market opened on Monday. The latest lockup expiration added some 20.3 million shares of the internet bank to the local stock market, which is some 4.3 percent of the total listed shares of KakaoBank.

Among the released shares are 5 million held by institutional investors that participated in the IPO subscription, 7.6 million held by game maker Netmarble and another 7.6 million of the bank held by Skyblue Luxury Investment, a Tencent company.

"It is highly likely Netmarble will try to sell off a large number of KakaoBank shares," said Koh Kyung-beom, a researcher at Yuanta Securities. "There could be an impact on the bank's share prices."

Among 36 million shares the bank allotted to institutional investors on listing, 59.82 percent of the shares have been under lockup agreements. While one-month and three-month lockup agreements have expired, shares under six-month lockup agreement, 13.26 million shares, will be added to the market on Feb. 6 next year.

KakaoBank shares, which were sold at an IPO price of 39,000 won and opened at 53,700 won on Aug. 6, hit highs in mid-August, with prices soaring to over 90,000 won. Over the past two months, its shares have traded between 50,000 won and 60,000 won.

Its weakening was largely driven by the government's push to discourage household lending. Last month, the internet bank had to discontinue some of its loan offerings until the end of the year to align with the government's drive.

Competition got tougher for the bank as well with the opening of Toss Bank, the country's third internet-only bank, at the beginning of last month.

Earlier this month, KakaoBank posted 52 billion won in net profit, 28 percent on year growth, significantly less than the expected 76.2-billion-won market consensus. The bank explained that provisions for increasing loans to people with weak credit scores pulled down the profit.

"Addition of locked-up shares in the market could weigh on the price in the short term," said Kim Hak-gyun, head of research at Shinyoung Securities. "But investors should be able to focus on the essential value of the companies in the longer run."

Other recent IPO companies are due to experience the same glut of shares later this week.

The three-month lockup period for roughly 4.05 million shares of game publisher Krafton, 8.3 percent of all Krafton shares, will end on Wednesday.

The six-month lockup period for 52.94 million shares of SK IE Technology will end on Thursday. That is 74 percent of the total listed shares. About 43.63 million shares are held by SK Innovation and 6.27 million shares are held by Premier Superior, a fund and the company’s second largest shareholder.

BY KIM JEE-HEE, LEE TAE-YUN [kim.jeehee@joongang.co.kr]