Kakao Pay's stock drops 16% as Alipay dumps shares

Kakao Pay

Kakao Pay shares plunged 16 percent Wednesday as Alipay Singapore Holding Pte dumped 5 million shares in a block deal.

The 5 million shares are around 9.8 percent of Alipay's holding, and 3.8 percent of Kakao Pay's total issued shares.

Alipay will still remain as the second largest shareholder of the mobile payment service, with 34.72 percent.

Kakao Pay closed at 16,500 won ($13) Wednesday, down 15.6 percent. Its market capitalization dropped by 2.2 trillion won to 11.9 trillion won.

Alipay is a mobile payment service owned by Hangzhou-based Ant Group. It held a total of 51,015,205 shares or 38.52 percent.

"The long-term partnership between Kakao Pay and Ant Group will be continuously strengthened," Kakao Pay said in Wednesday's release.

Kakao Pay went public in November, rising as high as 248,500 won intraday trading on Nov. 30.

But it came under fire after it was revealed that Kakao Pay former CEO RyuYoung-joon and seven other executives sold 90 billion won of company shares in December, only a month after Kakao Pay went public.

In late March, Shin Won-keun, Kakao Pay CEO-designate, said he will be paid minimum wage until the company's stock price hits 200,000 won.

Shin and four other executives will return the incentives they received last year, and Shin will not take any incentives until Kakao Pay's stock price bounces back. Money saved will go to rewarding employees, Kakao Pay said.

BY SARAH CHEA [chea.sarah@joongang.co.kr]