Namyang Dairy Turns Adversity into Opportunity... Stock Price Feels Dizzy

117% Stock Price Increase in May
Nearly 10% Sharp Drop on June 1 Followed by Recovery

Hong Won-sik, chairman of Namyang Dairy Products, is holding a public apology press conference related to the 'Bulgaris incident' at Namyang Dairy Products headquarters in Gangnam-gu, Seoul, on the 4th. Last month, Namyang Dairy Products announced at the 'Symposium on Developing Antiviral Foods in the COVID-19 Era' that the Bulgaris product was confirmed to reduce COVID-19 by 77.8%. However, the research results were reported to have exaggerated the animal 'cell-level' experiment results, causing controversy. In response, Hong Won-sik, chairman of Namyang Dairy Products, expressed his intention to resign at the public apology press conference on the same day. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Ji Yeon-jin] Namyang Dairy Products' stock price is on a roller coaster ride. After experiencing a significant fluctuation due to the Bulgaris incident, the company's value is once again swinging wildly following news of the owner's stake sale last month.

According to the Korea Exchange on the 2nd, Namyang Dairy Products was trading at 664,000 won, up 30,000 won (4.73%) from the previous day, as of 9:50 a.m. on the KOSPI market. The company's closing price on the securities market rose to the price limit (30%) on the 28th of last month, followed by a 22.81% increase on the 31st. The stock price, which was in the 300,000 won range at the beginning of last month, soared to 739,000 won on the 31st, marking a rise of 117.39%. However, on the 1st, the stock price dropped nearly 10% (9.43%). The opening price that day was 1.74% higher than the previous day and even rose more than 7% during the session, but the gains have since diminished.

Namyang Dairy Products also experienced significant volatility in April. Following the announcement on April 13 that its flagship probiotic drink Bulgaris was effective against COVID-19, the stock surged 8%, then nearly hit the upper limit (28.68%) the next day, only to plunge 26.28% in a single day.

The stock price, which had been hovering in the low 300,000 won range, began to rise again on the 4th of last month when former Namyang Dairy Products Chairman Hong Won-sik resigned, taking responsibility for the Bulgaris incident. On the day of Chairman Hong's press conference, the stock surged 28.40%. Subsequently, the stock price skyrocketed again as former Chairman Hong transferred his stake (51.68%) and the entire Hong family’s shares to Han & Company, a management participation private equity fund (PEF).

Meanwhile, Namyang Dairy Products was once a "royal stock," trading as high as 1,175,000 won in April 2013. However, the stock price declined following a boycott movement triggered by the 'agency gapjil' controversy.