[At a Crossroads] Selfie Global① Small Shareholders' Losses Snowball in No-Capital M&A

Majority Shareholder Purchased Shares Entirely with Borrowed Funds
Forced Sale Due to Failure to Meet Collateral Ratio Leaves 0% Stake
Stock Price Decline Increases Small Shareholders' Losses

The largest shareholder of Selfie Global, a company listed on KOSDAQ, has disappeared. The previous largest shareholder was forced into a margin call on all their shares after acquiring the company entirely through borrowed funds. Despite this situation, the company has not even been able to confirm who the largest shareholder currently is, raising concerns that small shareholders are suffering greater losses.

According to the Financial Supervisory Service's electronic disclosure on the 8th, Rocket International, the largest shareholder of Selfie Global, announced on the 2nd that all 1,280,309 shares (3.35%) provided as collateral for a loan were sold through a margin call.

Screenshot of Selfie Global homepage.

Rocket International had previously disclosed on the 21st of last month that it borrowed 1.35 billion KRW using all its shares as collateral. The collateral agreement was made on December 21 of last year, but the disclosure was made two months later.

The creditor was Daik Invest Loan, and the margin call price was 140% of the loan principal. If Selfie Global's stock price falls below 1,476 KRW without additional collateral, a margin call is triggered. It is analyzed that the margin call was executed as Selfie Global's stock price remained in the 1,300 KRW range recently.

This is not the first time Rocket International has been subject to a margin call. On September 7 last year, Rocket International purchased 5,780,309 shares (15.72%) from the former largest shareholder of Selfie Global at 3,314 KRW per share, totaling 19.2 billion KRW. As of 2021, Rocket International was a corporation in a state of capital erosion, with total assets of 2.3 billion KRW, total liabilities of 1.9 billion KRW, capital stock of 500 million KRW, and total equity of 340 million KRW.

Rocket International borrowed the entire acquisition fund from KNJ Invest and one other individual. Of the 19.2 billion KRW, 12 billion KRW was borrowed from KNJ Invest, and the remaining 7.2 billion KRW from an individual.

At that time, Rocket International provided all the acquired shares as collateral for the 12 billion KRW borrowed from KNJ Invest. However, just a few days after the acquisition, 4.5 million shares were sold through a margin call at 2,698 KRW per share. The collateral maintenance ratio was 160%, and when the stock price fell below this, the margin call was triggered.

As Rocket International, the largest shareholder of Selfie Global, repeatedly faced margin calls and delayed disclosures, Selfie Global's stock price declined. Recently, Selfie Global's stock price has fallen below 1,000 KRW. The stock price, which was in the 5,000 KRW range in August last year, has been cut to one-fifth. Nevertheless, Selfie Global has not even been able to confirm who the current largest shareholder is.

Ultimately, the losses from the no-capital M&A and the resulting stock price plunge are being borne entirely by small shareholders. As of October last year, Selfie Global had about 10,000 small shareholders, who hold 89.05% of the shares. Inquiries to Selfie Global regarding this matter went unanswered.

Meanwhile, Selfie Global is a company that manufactures electronic money credit cards certified by VISA, MasterCard, JCB, and others. It sells and supplies to financial institutions and credit card companies.