[Reporter’s Notebook] Shareholder Meeting Turns into a 'Stock Price Protest'

On the 28th, the shareholder meeting of Celltrion resembled a 'shareholder protest rally.' Some shareholders wore headbands with slogans protesting the sluggish stock price and held placards at the convention center where the meeting was held, and the shouts of shareholders inside the meeting room leaked outside. Due to the commotion in the meeting hall, proper proceedings became difficult, and some shareholders were forcibly removed. Seo Jung-jin, Honorary Chairman of Celltrion, who returned to the front line of management after two years, appeared at the meeting and continuously tried to 'appease the shareholders.' However, the shareholders' protests continued, and Chairman Seo had to keep his head bowed throughout the meeting.

The reason the shareholders were angry was the recent poor performance of Celltrion's stock price. Shareholders shared their personal stories, complaining about the severe damage caused by the stock price decline. During the Q&A session, they demanded stock price support measures such as share buybacks and countermeasures against short selling from Honorary Chairman Seo. They also demanded the resignation of Ki Woo-sung, Vice Chairman and CEO of Celltrion, holding him responsible for the stock price decline. Last year, at the shareholder meeting, Vice Chairman Ki declared that he would only accept the minimum wage as a way to share the shareholders' pain.

The scene of the Celltrion shareholders' meeting held on the 28th at Songdo Convensia, Yeonsu-gu, Incheon.
[Photo by Celltrion]

A shareholder meeting is a place where shareholders discuss and decide on major agenda items of a listed company. It is natural for various management issues to be discussed during the Q&A session, regardless of the agenda. The stock price decline is no exception. However, it is no exaggeration to say that this meeting started and ended with the stock price. Some shareholders continued their protests against the poor stock performance, causing disruptions in decision-making on the agenda.

While it is possible to hold management accountable for the stock price decline, it is a different matter to say they should bear full responsibility. Stock price movements are influenced by multiple factors. Earlier this month, right after the news of Honorary Chairman Seo's return was announced, the stock prices of the three Celltrion companies surged. The securities industry analyzes the stock price decline of Celltrion as a complex issue involving ▲global economic conditions ▲capital market contraction ▲lifting of the short selling ban. The share buyback demanded by some shareholders may be effective for short-term stock price support but could negatively affect the company's cash reserves in the long term. Chairman Seo also explained, "Stock prices are driven by performance, not artificially raised," and added, "It is better to use the funds for share buybacks as resources for mergers and acquisitions (M&A)."

Chairman Seo's voice was hoarse after holding the microphone for nearly five hours in front of the shareholders. He said that if shareholders dissatisfied with the company came to the company or even to his home, he would treat them to dinner and listen to them all night if necessary. He then urged shareholders to narrow the 'gap.' Rather than unrealistic and excessive demands, he said he would listen to shareholders' requests within a realistic compromise. Stock investment is not 'speculation' aiming for short-term capital gains but 'investment' based on the company's long-term and intrinsic value. If the company has not provided sufficient information to shareholders in this process, it can be criticized. Honorary Chairman Seo promised to transparently disclose all information that can be made public during communication. Now that Chairman Seo has returned, it seems necessary to have some 'patience' to trust his words.