'National Stock' Samsung Electronics Plummets... Individual Investors Left 'Stunned'
Donghak Ant Movement's 'John Lee' Faces Illegal Investment Allegations, Causing 'Stock Market Depression' Complaints
On the 17th, amid the impact of a sharp global stock market decline, the KOSPI index fell below the 2400 level briefly in early trading. Dealers are working in the Hana Bank dealing room in Euljiro, Seoul. The intraday break below 2400 on the KOSPI is the first in about 1 year and 7 months since November 5, 2020 (2370.85). Photo by Moon Honam munonam@
[Asia Economy Reporter Yoon Seul-gi] The stock price of Samsung Electronics, which had raised expectations of becoming a '100,000 electronic,' has continuously hit new lows and eventually halved. As Samsung Electronics plunged to a '50,000 electronic,' individual investors (retail investors) have been left in despair. Adding to this, suspicions have arisen that John Lee, CEO of Meritz Asset Management, who led the Donghak Ant Movement and was nicknamed 'Jonbongjun' (John Lee + Jeon Bong-jun), illegally invested under his spouse's name, intensifying voices expressing stock market depression.
The stock price of Samsung Electronics, which had been hitting new lows daily, slid to the '50,000 electronic' level on the 17th for the first time in about 19 months. Until January last year, the price had risen intraday to 96,800, suggesting the possibility of becoming a '100,000 electronic,' but investor sentiment sharply contracted as the U.S. Federal Reserve (Fed) took a 'giant step' (a 0.75 percentage point interest rate hike).
With the collapse of the 60,000 won level of the 'national stock' Samsung Electronics, the cries of the Donghak Ants have also erupted. Mr. Lee, a 20-something office worker who purchased Samsung Electronics stock during the '70,000 electronic' period in August last year, said, "I was first introduced to stocks through Samsung Electronics," adding, "Since it had passed the 90,000 electronic mark, people around me said I bought it when it was relatively cheap. I thought it wouldn't fall any further, and it even rose a bit, so I held on, but now it's in the 50,000 won range," sighing deeply.
John Lee, CEO of Meritz Asset Management, is delivering the keynote speech at the 2020 Gold Age Forum held at the Banking Hall in Jung-gu, Seoul in 2020. Photo by Moon Honam munonam@
Meanwhile, shocking allegations have emerged that CEO John Lee, who was called the vanguard of the Donghak Ants and served as a psychological pillar for individual investors, illegally invested using his wife's name. According to the financial investment industry on the 19th, the Financial Supervisory Service (FSS) conducted an unscheduled inspection of Meritz Asset Management from the 23rd of last month to the 7th of this month and is investigating possible violations of regulations.
It is known that CEO John Lee is suspected of investing shares in a real estate-related online investment-linked finance (P2P) company A, established by an acquaintance, under his wife's name in 2016. The FSS is examining whether John Lee borrowed his spouse's name to invest in A's shares and whether there were any violations of the Capital Markets Act by John Lee and Meritz Asset Management during the operation of the P2P private equity fund.
Given that he had long emphasized the importance of stock investment with phrases like "Seed money starts from the price of a cup of coffee" and "Live on monthly rent instead of real estate and invest in stocks and funds," the shock is even greater.
As the situation stands, more people are expressing disappointment with stocks. Some even complain of 'stock market depression.' On stock communities, lamentations such as "I bought blue-chip stocks instead of a savings account, but seeing a -30% loss makes me feel guilty," "My head aches in this falling market," and "I know not looking is better for my mental health, but I keep checking and getting stressed" are pouring out.
Experts express concern that since the COVID-19 pandemic, young investors who have lost their investment balance amid increased uncertainty have appeared, and as the bear market continues, their depression may deepen. Professor Kwak Geum-ju of Seoul National University's Department of Psychology explained, "In fact, stocks and Bitcoin have high returns but also high risks of losing money, yet many young people jump in with expectations of profit without considering these risks. Their risk tolerance is higher," adding, "Young people, who are relatively economically vulnerable, take risks and invest, and when faced with a bear market, the shock is greater, leading to expressions of depression."
Meanwhile, on the 20th, after a meeting with the heads of 17 banks at the Bankers' Hall in Jung-gu, Seoul, Financial Supervisory Service Governor Lee Bok-hyun responded to questions about whether the illegal investment allegations against CEO John Lee reflect his commitment to 'strict punishment of illegal acts' stated in his inaugural speech, saying, "(The allegations) have been reviewed, and I will personally take a look."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
