Krafton Falls Below 400,000 Won on the 7th
NCSoft's 600,000 Won Level at Risk
Pearl Abyss Down 13% This Year
Game Stocks Suffer Joint Price Decline
Changes in Stock Wealth Rankings
Kim Dae-il, Pearl Abyss Chairman, Drops to 13th
Jang Byung-gyu, Krafton Chairman, Falls to 14th
[Asia Economy Reporters Song Hwajeong, Park Jihwan] Game stocks, which soared last year due to expectations around the metaverse (extended virtual world), non-fungible tokens (NFT), and play-to-earn (P2E), are showing signs of instability in the new year. This is interpreted as a combined effect of the burden from the steep rise in the second half of last year and the recent weakness in growth stocks due to early tightening concerns in the U.S. The poor performance of game stocks at the beginning of the year has also changed the rankings of wealthy shareholders.
As of 9:25 a.m. on the 10th, Krafton was trading at 378,000 KRW, down 16,500 KRW (4.18%) from the previous day. This marks five consecutive days of decline. Krafton, which has been on a downward trend since the start of the year, fell below the 400,000 KRW mark for the first time since its listing on the 7th. NCSoft also showed a slight decline, dropping 0.5% to 603,000 KRW. NCSoft, which was in the 640,000 KRW range at the end of last year, has continued to weaken this year, putting the 600,000 KRW level at risk. On the 6th, it even fell to 599,000 KRW during trading, falling below 600,000 KRW for the first time in about two months. Pearl Abyss also showed a decline of over 3% that day. Pearl Abyss has fallen more than 13% since the start of the year. Kakao Games, which was in the 90,000 KRW range at the end of last year, has dropped to the 70,000 KRW range.
The weakness in growth stocks due to concerns over early U.S. tightening has led to the poor performance of game stocks. The U.S. 10-year Treasury yield surged to 1.8% during trading on the 7th, marking the highest level since January 2020. Rising interest rates are a burden for growth stocks. Growth stocks, which focus more on future earnings than current performance, are evaluated lower as the discount rate on future earnings increases with rising interest rates. The steep rise last year is also cited as a recent factor for the stock price weakness. Fatigue from the sharp rise and profit-taking are believed to be weighing down the stock prices.
The simultaneous decline in game stocks has also affected the rankings of wealthy shareholders in the gaming industry, such as Kim Dae-il, chairman of Pearl Abyss, and Jang Byung-gyu, chairman of Krafton. Both have seen the value of their stock holdings decrease by more than 400 billion KRW each since the start of the year, causing their rankings to drop by one notch. As of the 7th, Chairman Kim, ranked 13th among stock-rich individuals, saw the valuation of his shares fall by 445.1 billion KRW (13.7%) from the end of last year to 2.8122 trillion KRW. Chairman Jang, ranked 14th, also saw his share value decrease by 460.3 billion KRW (14.2%) from 3.2329 trillion KRW to 2.7725 trillion KRW.
The U.S.-led tightening movement has also led to a sharp decline in the share values of leading domestic growth stock shareholders. Within one week of the new year, the valuation of shares held by Kim Beom-su, chairman of Kakao's board, and Bang Si-hyuk, chairman of HYBE, dropped by more than 10%. Chairman Kim's share valuation decreased by 739.1 billion KRW (11.1%) from 6.6515 trillion KRW on December 30 last year to 5.9125 trillion KRW on the 7th of this month. During the same period, Chairman Bang's share valuation also fell by 611.5 billion KRW (13.3%). Both saw their stock rankings drop by one notch, placing them 5th and 8th, respectively.
On the other hand, Chung Mong-koo, honorary chairman of Hyundai Motor Group, ranked 6th, and Cho Jung-ho, chairman of Meritz Financial Group, ranked 7th, made gains despite the sluggish domestic stock market, with their share values rising by 231.3 billion KRW (4.9%) and 514.1 billion KRW (12.0%), respectively. For Honorary Chairman Chung, the rise in Hyundai Mobis stock price was influenced by Hyundai Motor's strong sales performance in the U.S. market last year and the active restructuring moves following the sale of Hyundai Glovis shares. Chairman Cho's gains were the result of sustained investor interest in Meritz Group stocks due to aggressive share buyback policies aimed at enhancing shareholder value.
Meanwhile, the share values of most other wealthy shareholders showed slight declines. These include Lee Jae-yong, vice chairman of Samsung Electronics (-0.48%), Hong Ra-hee, former director of Samsung Museum Leeum (-0.04%), Lee Boo-jin, president of Hotel Shilla (-0.23%), Lee Seo-hyun, chairwoman of Samsung Welfare Foundation (-0.53%), Chung Eui-sun, chairman of Hyundai Motor Group (-0.39%), Chey Tae-won, chairman of SK Group (-2.19%), and Suh Kyung-bae, chairman of Amorepacific Group (-2.60%).
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