Presidential Election Theme Stocks See Large Sell-Offs at High Prices... Small Investors Face Loss Concerns

Lee Jae-myung Presidential Election Theme Stock Eastaco Major Shareholders Sold 5,146,582 Shares This Year
Yoon Seok-yeol Presidential Election Theme Stock Daewon Electric Wire Chairman Seo Myeong-hwan and Executive Director Seo Jeong-seok Monetized 18 Billion Won in Cash

[Image source=Yonhap News]

[Asia Economy Reporter Gong Byung-sun] As presidential election theme stocks have surged this year, some major shareholders are selling their shares at peak prices. This raises concerns about losses for small investors.

According to the Financial Supervisory Service's electronic disclosure system on the 19th, Eastaco's largest shareholder CEO Kim Seung-je, relatives Hong Soon-hee and Kim Eun-sung, and affiliated company Starconet, where CEO Kim is the largest shareholder, sold a total of 5,146,582 shares this year. Eastaco is a real estate sales and leasing company. It is known in the securities market as a theme stock related to Gyeonggi Province Governor Lee Jae-myung's long-term public housing pledge.

The amount for the 4,846,582 shares with disclosed disposal prices is about 20.9 billion KRW. Including 300,000 shares sold by Starconet on the 10th, for which the disposal price was not disclosed, the total is approximately 22.4 billion KRW.

Eastaco's stock price, identified as Governor Lee's theme stock, rose from 677 KRW at the end of last year to 6,650 KRW at the end of June this year. The stock price increase rate in the first half of the year was 882.27%, ranking first among both KOSPI and KOSDAQ stocks.

As the stock price surged, the major shareholder family began steadily selling shares from March until recently. CEO Kim Seung-je sold 50,000 shares at 7,500 KRW per share, close to the intraday all-time high of 7,550 KRW, on June 29.

Eastaco's stock price began to decline sharply from the end of June, falling to the 3,000 KRW range by August. This represents nearly a 50% drop from the peak. The closing price on the 17th was 4,200 KRW.

[Image source=Yonhap News]

Daewon Cable, also grouped as a theme stock of opposition presidential candidate former Prosecutor General Yoon Seok-youl, saw Chairman Seo Myung-hwan and his son Executive Director Seo Jung-seok sell some of their shares. At the peak in June, Chairman Seo and Executive Director Seo sold 1 million and 5 million shares respectively, cashing out about 18 billion KRW.

Daewon Cable became a presidential election theme stock as an outside director is known to be an alumnus of Seoul National University Law School alongside former Prosecutor General Yoon. Daewon Cable's stock price remained at 1,080 KRW at the end of last year but rose to an intraday high of 3,850 KRW on June 17.

Another theme stock related to former Prosecutor General Yoon, NE Neungyule, also sold treasury shares when its stock price surged. From May 17 to 28, it disposed of 587,334 treasury shares for a total of 10.65568 billion KRW. The average disposal price per share was 18,368 KRW, nearly seven times higher than the year-end stock price of 2,845 KRW.

NE Neungyule was linked as a presidential election theme stock because its largest shareholder, Chairman Yoon Ho-jung of hy (formerly Korea Yakult), shares the Paepyeong Yoon clan with former Prosecutor General Yoon.

As theme stocks surge, the repeated practice of major shareholders or related parties selling shares to realize capital gains raises concerns about harm to small shareholders. In particular, political theme stocks often experience sharp fluctuations unrelated to corporate fundamentals, so caution is necessary when investing.