New Release Expected to Succeed... But November Lock-Up Release Volume Increases Burden
[Asia Economy Reporter Minwoo Lee] About three months after its listing, Krafton's stock price has struggled to surpass its initial public offering (IPO) price. Although expectations are rising for the release of new titles, the remaining lock-up release volume is seen as a potential variable.
According to the Korea Exchange on the 30th, Krafton closed at 469,500 KRW the previous day, down 1.16% from the day before. Since the 1st of this month, the closing price has not exceeded the IPO price of 498,000 KRW even once. On the 26th, it briefly rose back to 498,000 KRW but then declined, falling about 5.7% over three trading days.
Despite steady anticipation for this year's upcoming release, "Battlegrounds: New State," the stock price has struggled to surpass the IPO price since its listing on August 10th. In fact, "Battlegrounds: New State" surpassed 10 million pre-registrations just over a month after its pre-registration began in April. By mid-last month, it had exceeded 40 million. Notably, in India, where pre-registration started in early last month, 8 million users registered within just two weeks. Considering that the global monthly active users (MAU) of Battlegrounds is around 60 million, adding the 40 million MAU from the new title "Battlegrounds: New State" could secure over 80 million users, even accounting for some cannibalization effects.
Third-quarter earnings are also expected to be solid. According to financial information provider FnGuide, consolidated sales are forecasted at 462.9 billion KRW, with operating profit at 185.4 billion KRW. These figures represent increases of 32.31% and 1065%, respectively, compared to the same period last year. This is attributed to the success of "Battlegrounds Mobile India," released in July, which recorded a daily maximum user count of 16 million, a peak concurrent user count of 2.4 million, and 50 million cumulative downloads. This also supports expectations that dependence on China can be reduced.
Nevertheless, the sluggish stock price is attributed to the remaining lock-up shares. Starting mid-next month, about three months after listing, a flood of shares could hit the market. Hyunyong Kim, a researcher at Hyundai Motor Securities, expressed concern, saying, "The total number of shares subject to lock-up and mandatory holding agreements to be released is 4.05 million shares, accounting for 8.3% of the total issued shares," and added, "We expect a deterioration in supply-demand conditions from mid-next month." However, he added, "As the market absorbs the released shares, the launch of 'Battlegrounds: New State' and expectations for console releases and intellectual property (IP) business diversification next year will highlight the foundation for stock price growth."
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