"Let's Put Out the Urgent Fire First"...Wemade Recovers Investment Funds to Buy WEMIX

Bithumb Major Shareholder Bident Disposes All BW, Invests in Saving WEMIX
Despite Poor Performance, Increases Dividend Size to Appease Shareholders and Manage Crisis

[Asia Economy Reporter Yuri Choi] Wemade has early recovered the funds it invested in Vidente, the largest shareholder of Bithumb. This move aims to inject funds into reviving WEMIX as the partnership with Bithumb has weakened following WEMIX's delisting. Alongside this, Wemade has also increased the total dividend amount compared to last year to appease shareholders.

Early Recovery of Vidente Investment Funds...Allocated to WEMIX Repurchase and More

Wemade announced on the 13th that it decided to dispose of Vidente's 30 billion KRW worth of bonds with warrants (BW). Although the bond maturity date is July 2023, the company opted for early recovery. In July, Wemade had already disposed of 20 billion KRW worth of BW through Vidente's put option exercise. As a result, Wemade has sold all the BW it held in Vidente. However, it still retains convertible bonds (CB) worth 30 billion KRW.

The investment funds recovered from the BW sale will be used to revive WEMIX. Industry insiders expect the funds to be used for WEMIX repurchase (buyback) and related activities. Wemade has previously stated plans to repurchase and burn WEMIX and WEMIX Classic tokens worth 10 million USD (approximately 13 billion KRW) by March next year. This is a measure to protect investors by reducing the circulating supply of the delisted WEMIX. A Wemade representative said, "We believe that returning funds to the WEMIX ecosystem is a better direction, so we plan to use the recovered funds accordingly."

Changes in the partnership between the two companies are also seen as a factor. Wemade had intended to collaborate in blockchain and metaverse businesses by securing shares in Vidente, but the WEMIX incident has limited its maneuverability. The delisting of WEMIX from Bithumb and three other major domestic exchanges has strained the strategic partnership.

An industry insider explained, "Holding shares in Vidente does not mean that WEMIX trading is possible, and given the poor condition of the virtual asset market, expecting short-term investment gains is difficult. From Wemade's perspective, it seems they recovered the investment funds to urgently address the WEMIX revival."

Dividend Increase Despite Turning to Deficit...Efforts to Appease Shareholders

Wemade has also taken steps to appease shareholders. Despite the sharp drop in stock price following the WEMIX incident, the company increased the total dividend amount compared to last year. Utilizing the profit from the sale of Lionheart Studio shares (estimated after-tax disposal gain of 82 billion KRW), Wemade plans to conduct a cash dividend of approximately 25 billion KRW this year.

The exact dividend amount will be finalized at a future board meeting, but if maintained, it will exceed last year's amount. Last year, Wemade paid a cash dividend of 6,500 KRW per share, totaling 21.4 billion KRW. At that time, the company’s performance was supported by sales of 561 billion KRW and operating profit of 326 billion KRW, but this year’s situation is different. As of the third quarter, cumulative sales were 348.1 billion KRW with an operating loss of 57.2 billion KRW, marking a shift to deficit. Despite poor performance, the company is using gains from share sales to soothe shareholders.

Meanwhile, Wemade has filed an immediate appeal with the court yesterday, refusing to accept WEMIX’s delisting. Additionally, the WEMIX Foundation is making strenuous efforts to resolve the situation, including burning 71,302,181 WEMIX tokens it holds.