Increase in Metaverse Content Requests After IPO
Establishing Growth Foundation Through Proactive Investment... Utilizing 68.5 Billion KRW Investment in Other Companies
Major Shareholder Participates in 30% of Dividend New Shares... Remaining Warrants Sold Over-the-Counter
[Asia Economy Reporter Hyungsoo Park] The amount of funds Giantstep plans to raise for mergers and acquisitions (M&A) has increased. As expectations for the metaverse rise in the domestic stock market, a virtuous cycle structure enabling Giantstep's growth is being created.
According to the Financial Supervisory Service's electronic disclosure system on the 17th, the first issuance price of Giantstep, which is pursuing a paid-in capital increase, rose 40.7% from the initially planned issuance price of 55,500 KRW to 78,100 KRW at the time of the board resolution. The amount to be raised increased from 70 billion KRW to 98.5 billion KRW. This is thanks to Giantstep's stock price rising 109.3% compared to when the board resolved the capital increase. The final issuance price will be confirmed on the 6th of next month.
Giantstep, which operates advertising visual effects (VFX), video VFX, and real-time content business divisions, has prioritized allocating the increased capital to acquiring securities of other companies. It plans to use 68.5 billion KRW as funds for acquiring securities of other companies, including investments in startups to develop new metaverse-related businesses. This is an increase of about 28.5 billion KRW from the 40 billion KRW planned at the time of the capital increase.
Applying real-time content solutions during advertising and video production can shorten production time. Giantstep is creating synergy effects when producing films and dramas using virtual studios. It is pursuing acquisitions of companies that can strengthen the VFX business division and secure skilled graphic artists. Giantstep explained that there are not only companies under due diligence as preferred negotiation partners but also companies in the review stage. However, if negotiations fail due to unforeseen external variables, it will hire personnel independently. A preliminary plan has also been prepared to use 20 billion KRW as operating funds primarily for workforce expansion and marketing related to new business growth.
To expand its full 3D metaverse online service, Giantstep is considering acquiring game companies, entertainment companies, and virtual studios that have developers and artists. The full 3D metaverse online service (tentative name) is a metaverse platform service based on a game platform. It allows users to watch extended reality (XR) live performances by famous artists in virtual reality and offers virtual fashion shows linked with the fashion industry, among other features. It also enables video content trading combined with non-fungible tokens (NFTs) and online shopping. It is expected that development costs and expenses for hiring excellent personnel will be necessary to implement the service. The service launch is targeted for 2023.
The background behind Giantstep's large-scale fundraising is the confidence that business opportunities will increase with the growth of the metaverse. Since its initial public offering (IPO) in March this year, requests for metaverse-related content, as well as virtual studio and virtual human businesses, have surged sharply. Additionally, it succeeded in commercializing research and development (R&D) projects conducted in the form of proof of concept (POC), and demand is expected to increase. With the development of the OTT industry, the film and drama VFX industry is anticipated to grow rapidly, making large-scale investment inevitable.
Giantstep plans to challenge a new market expected to rapidly emerge as a global trend by presenting completely new real-time, interactive 'metaverse content' that has not yet been experienced.
As the new share issuance price rises, the investment burden on CEO Ha Seungbong, the largest shareholder, has also increased. CEO Ha will be allocated 218,662 new shares for his 1.8 million shares held. He will participate in about 30% of the allocated amount. The largest shareholder's stake will decrease to 17.09%. CEO Ha and related parties plan to sell their new share subscription rights to strategic investors (SI) through over-the-counter transactions. Due to the recent stock price increase, the price of the subscription rights is also expected to rise.
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