The 'Speco Chairman' Who Sold Stocks When North Korea Bombed the Office

[Image source=Yonhap News]

[Asia Economy Reporter Yoo Hyun-seok] During a period of heightened military tensions with North Korea, Kim Jong-seop, chairman of Speco, sold his shares and made a profit worth billions of won.

According to the Financial Supervisory Service's electronic disclosure system on the 26th, Chairman Kim sold 360,000 shares (2.46%) out of the 5,277,071 shares (36.01%) he held in Speco on the 19th through on-market sales at 9,437 won per share. The total amount was approximately 3.4 billion won. Additionally, on the 17th, he sold 500,000 shares at 7,418 won per share, amounting to about 3.7 billion won. Combining the amounts sold on the 17th and 19th, the total exceeds 7 billion won.

The timing of Chairman Kim’s share sales coincided with a period of rising tensions with North Korea. On the 4th, Kim Yo-jong, First Deputy Director of the North Korean Workers' Party, issued the first statement condemning South Korea and defectors. On the 5th, she also stated that the inter-Korean joint liaison office would be dismantled. Particularly on the 16th, North Korea blew up the Kaesong inter-Korean joint liaison office, and the South Korean government issued warnings to North Korea, escalating tensions to their peak.

Until April and May, Speco’s stock price hovered around 4,000 to 5,000 won, but it began to surge as inter-Korean tensions increased. The stock price, which was 4,590 won on the 12th, hit the upper limit and closed at 5,960 won on the 15th. On the 16th, the day North Korea blew up the liaison office, the stock hit the upper limit in after-hours trading, and on the 17th and 18th, it rose to the intraday price limit, continuing its rapid ascent. On the 18th, it reached a yearly high of 12,900 won. Compared to the end of last year, this was a 216.56% increase. Coincidentally, Chairman Kim sold his shares during this peak period.

After peaking on the 19th and then stalling, Speco’s stock price plummeted when Chairman Kim Jong-un postponed military action plans against South Korea on the 24th. The stock price, which was 8,850 won on the 23rd, hit the lower limit on the 24th, and the following day closed at 5,240 won, down 15.48% (960 won) from the previous trading day, returning to early-month levels. This followed the typical pattern of theme stocks falling once the issue disappears.

Meanwhile, Speco is considered a defense-themed stock in the stock market. This is because it has been designated as a defense supplier for the Fin Stabilizer (a device that reduces the rolling motion of a ship caused by waves and wind during navigation) and exclusively supplies it to the Republic of Korea Navy.