Individual Investors Late to Jump into NFT-Related Stocks... Foreign and Institutional Investors Offloading Shares

Foreigners and Institutions Who Bought NFT-Related Stocks in November... Net Selling in a Downturn
NFT-Related Stocks Soar Even with a Mere Touch of NFT... Need to Separate the Wheat from the Chaff

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Gong Byung-sun] Individual investors recently took advantage of the sharp decline in non-fungible token (NFT) related stocks as a buying opportunity at low prices. However, foreigners and institutions, who led the rise by buying NFT-related stocks in November, have been selling off and gradually withdrawing from NFT-related stocks this month.

According to the Korea Exchange on the 8th, over the two days of the 6th and 7th, NFT-related stock Wemade Max fell by 23.10%. This was the second largest drop overall, following ZEMVAX GEO (-24.32%). Other NFT-related stocks also showed weakness. During the same period, Bident and Wemade fell by 15.43% and 13.29%, respectively. However, there was a rebound in the morning session. As of 9:38 a.m., Wemade Max recorded 45,800 KRW, up 2.80% (1,250 KRW) from the previous day. Bident and Wemade also rebounded by 1.58% and 3.21%, respectively.

As NFT-related stocks declined, individual investors engaged in bargain buying. During this period, individuals net purchased Wemade worth 50.6 billion KRW, Danal 48.4 billion KRW, and HYBE 38.4 billion KRW. Last month, none of the top 10 net purchased stocks by individuals were NFT-related.

However, foreigners and institutions actively sold NFT-related stocks, handing over shares to individuals. During the same period, foreigners net sold NCSoft worth 37.6 billion KRW and Danal 27.6 billion KRW. Institutions also sold Wemade worth 54.3 billion KRW, HYBE 40.2 billion KRW, Danal 22.4 billion KRW, and Bident 10.8 billion KRW.

In November alone, foreigners and institutions drove up NFT-related stocks. Over the past month, foreigners net purchased HYBE worth 203.1 billion KRW, NCSoft 168.4 billion KRW, and Wemade 57.0 billion KRW. Institutions also net purchased NCSoft 143.3 billion KRW, Netmarble 52.6 billion KRW, Gamevil 47.6 billion KRW, and Bident 36.1 billion KRW. Fueled by this buying momentum, Gamevil, Wemade Max, and Bident surged by 155.80%, 144.92%, and 113.54%, respectively, last month.

Concerns are rising that if investors do not distinguish the wheat from the chaff in this situation, individual investors could suffer significant losses. Many companies have yet to deliver tangible results or present concrete roadmaps related to NFTs, while some stocks have risen excessively merely by mentioning NFTs.

Professor Hong Ki-hoon of Hongik University’s Department of Business Administration said, “It has long been true that foreigners and institutions have led the stock market,” adding, “Individual investors need to carefully select NFT-related stocks based on fundamentals to reduce potential losses.”