The Relentless Fall of IPO Hopefuls

[Image source=Yonhap News]

[Asia Economy Reporter Park Soyeon] Oasis, Yanolja, Viva Republica (Toss), K-Bank, and Kurly, all highly anticipated for listing, are collapsing relentlessly.

According to Seoul Exchange Unlisted Market on the 6th, Viva Republica, K-Bank, and Kurly recorded their 52-week lows. Oasis is trading at 25,000 won, down about 5,000 won (16.67%) compared to a year ago. Yanolja traded at 40,511 won, down 11,545 won (22.18%).

The sluggishness of the over-the-counter market is due to the poor stock market. The domestic stock market is deteriorating as the U.S. Federal Reserve (Fed) continues strong interest rate hikes to curb inflation.

Typically, when the stock market is sluggish, it also affects the public offering market. As a result, most companies that recently launched subscription offerings have frequently set their public offering prices at the lower end. During the popularity of public offerings in 2020 due to COVID-19, most offering prices were set at the upper end of the desired band.

Unlisted stocks were mainly invested in by individuals. Judging that it was difficult to receive large-scale subscriptions in the public offering market, investors turned their attention to unlisted stocks. The 'Ttah-sang' phenomenon boosted the popularity of unlisted stocks. However, with the continuous poor performance, withdrawal, and rescheduling of public offerings, individual investors, who were the main investors in unlisted stocks, began to turn away.

The poor stock market also seems to have affected investor sentiment as 'major' companies consecutively changed their planned listing schedules. This year, IPO giants such as SK Shieldus, One Store, Taelim Paper, Hyundai Engineering, Golfzon Commerce, and Lionheart Studio have all withdrawn their public offering plans one after another.

Trading volume has also decreased to less than half. The average daily trading volume of the unlisted market K-OTC operated by the Korea Financial Investment Association in October was 2.324 billion won, down 55.58% from 5.17832 trillion won during the same period last year.