[Featured Stock] Kakao Group Shares Face 'Black Monday'... Sharp Drop of 8-9%

[Asia Economy Reporter Kwon Jae-hee] Following the data center fire over the past weekend that paralyzed Kakao services, Kakao group stocks have simultaneously plunged immediately after the market opened.

As of 9:06 a.m. on the 17th, Kakao's stock price is trading at 46,750 KRW, down 9.05% from the previous trading day. At the same time, KakaoBank is down 8.57% at 16,000 KRW, KakaoPay is down 9.14% at 32,800 KRW, and KakaoGames is down 8.37% at 35,050 KRW.

On the 15th at around 3:30 p.m., a fire broke out at the data center operated by SK C&C, causing Kakao's services to be paralyzed. Although Naver was also affected by this incident, Naver quickly restored its services thanks to its segmented server management, whereas Kakao's services were suspended for nearly a day.

In the securities industry, while the possibility of users switching to other platforms is considered low, the unprecedented nature of the incident makes a sharp stock price drop and deterioration of fourth-quarter earnings inevitable.

Samsung Securities analyst Oh Dong-hwan stated, "The impact of this service suspension on sales will appear as lost revenue and user compensation," and forecasted, "Fourth-quarter sales are expected to decrease by up to 1-2%."

Daol Investment & Securities analyst Kim Jin-woo also pointed out, "If compensation extends to sellers connected to KakaoTalk and KakaoPay, the scope of damages will be so large that it will be difficult to estimate," adding, "Even assuming only paid users, the impact on operating profit is about 12 billion KRW, which represents a 7% downward revision of the existing fourth-quarter estimates."