Game publisher Wemade shares nose-dive after CEO's surprise departure

Wemade headquarters in Seongnam, Gyeonggi [YONHAP]

Game publisher Wemade's shares are tumbling following the announcement that now-former CEO Jang Hyun-guk will step down from the top position.

Following Jang’s abrupt departure on Thursday, Wemade shares fell 11.36 percent to close at 56,200 won ($42.26) on Friday.

The price of the publisher's cryptocurrency, Wemix, nose-dived 40.64 percent to 3,548 won at one point on Thursday compared to the previous peak of 4,990 won just before the plunge. It was trading at 3,989 won on Bithumb at 3:41 p.m.

Wemade announced via electronic disclosure Thursday that former chairman Park Kwan-ho would assume the CEO position.

Jang will instead take the place of the company’s vice president.

Jang has held the top position for a decade since 2014, leading the company’s development of play-to-earn (P2E) games. In these games, users earn real-world money by collecting and selling in-game items using the company’s Wemix cryptocurrency.

Wemade's newly-appointed CEO Park Kwan-ho [WEMADE]

Park founded Wemade in February 2000. The first-generation game developer was in charge of the company’s iconic title, The Legend of Mir 2. Park’s return to the top spot comes 12 years after he stepped back in 2012 to head the board of directors.

Park is the largest shareholder of his company, with a 39.39 percent stake.

“Park will commit to game development and lead the company’s existing game and blockchain businesses,” Wemade said in a statement.

Wemade spokesperson declined to comment on the reason behind the sudden replacement.

Local media reports diverge on the issue, with some speculating that Park stepped out of the shadows to implement responsible management. In contrast, others say that the replacement stems from regulatory risks the company faces from an ongoing investigation from the prosecutors.

In May 2023, Jang was sued by 20 Wemix investors who accused him of unfair and fraudulent trading because of the gap between the number of tokens to be distributed according to company disclosures and the actual number outstanding.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]