Last Year's 'Daebak' IPOs, Downhill This Year

SK Biopharm, Kakao Games, and Other Major IPOs Last Year Showed Initial 'Double-Price Jump' but Continued Slump
SK Bioscience Expected to Draw Record-Breaking Attention Next Week

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[Asia Economy Reporter Minwoo Lee] Although the stock market is staggering due to negative factors from the U.S., expectations are rising as the largest IPO of the year, SK Bioscience, is set to begin its public offering next week. However, concerns have been raised that caution is necessary since the momentum of public offerings, which had previously attracted market funds, has only resulted in a 'brief surge.'

According to the Korea Exchange on the 5th, SK Biopharm, which sparked a public offering subscription frenzy last year, recorded 107,000 KRW at 11:19 a.m. on the same day, down 3.17% from the previous day. Since late November last year, it has steadily declined, falling below the closing price of 127,000 KRW on its first day of listing early on. It is even threatening the opening price of 98,000 KRW. This contrasts with the 'ttasang-sang' (opening price formed at double the public offering price followed by two consecutive days of upper limit price) recorded immediately after its listing in June last year. During this period, the KOSPI rose by about 15%.

The situation is similar for Kakao Games, which set a new record with subscription deposits of 58.5543 trillion KRW. After its listing on September 10 last year, the stock price declined for more than a month. On October 27 last year, it dropped to 42,950 KRW, falling below the opening price of 48,000 KRW. Since then, the stock price has struggled to recover. As of 11:19 a.m. on the same day, it was 50,400 KRW, down 3.45% from the previous day. This is a 19.2% drop compared to the closing price of 62,400 KRW on the first day of listing, which recorded 'ttasang.'

SK Bioscience, considered the largest IPO of the year, is conducting institutional demand forecasting until today and will finalize the public offering price on the 8th. The public offering price range is 49,000 KRW to 65,000 KRW, with the expected maximum public offering amount at 1.4918 trillion KRW, ranking sixth in KOSPI history.

It has attracted attention as it is entrusted with the production of COVID-19 vaccines from AstraZeneca and Novavax, and President Moon Jae-in visited twice, highlighting its prominence during the COVID-19 situation. Especially since it is the first major IPO after the public offering system was reformed, investment enthusiasm is expected to be considerable. Previously, allocation was based on the scale of subscription deposits, but now an equal allocation method is applied. If individual investors exceed the minimum subscription standard (10 shares), more than 50% of the allocation is distributed equally. The remaining 50% is still proportionally allocated based on subscription deposits, but now the number of subscription accounts has also become a key factor.

Accordingly, there is a growing trend of people opening new accounts with the underwriting securities firms. Some are even opening accounts under the names of minor children or elderly parents. A financial investment industry official said, "Since this is the first major listing to apply equal allocation, an unprecedented amount of subscription deposits is expected."

Meanwhile, as of 10:29 a.m. on the same day, the KOSPI recorded 2,992, down 1.68% (51.49 points) from the previous day. The 3,000-point mark was broken again, following the intraday drop on the 26th of last month. It appears that the decline in the U.S. stock market has also affected the domestic market. Kiwoom Securities researcher Sangyoung Seo explained, "The rapid rise in interest rates due to Federal Reserve Chairman Jerome Powell's remarks that he will not tolerate excessively high inflation, and the selling pressure mainly on tech and theme stocks, which had a heavy valuation burden in the U.S. stock market, were burdensome. Following the bond, foreign exchange, and commodity markets, the stock market also showed increased volatility, raising the possibility of weakened investor sentiment."