[Hot Stock] CJ ENM Rises 5% on Expectations of Rapid Progress in Tving-Wave Merger

CJ ENM and SK Square Invest 250 Billion KRW in Wavve
Major Merger Obstacle Cleared... 'Rapid Progress' Expected
Strong Competitiveness Anticipated in Domestic OTT Market Post-Merger

CJ ENM is showing strength. It appears to be influenced by the analysis that the merger will gain momentum as it decided to invest 250 billion KRW in Wave, the merger target, together with SK Square.

As of 9:11 AM on the 28th, CJ ENM is trading at 66,800 KRW, up 5.36% (3,400 KRW) from the previous trading day. This is the highest price this month.

The day before, Wave announced on the 27th that it issued convertible bonds (CB) to SK Square (150 billion KRW) and CJ ENM (100 billion KRW). The funds will mainly be used to repay convertible bonds issued in 2019. The maturity repayment amount is approximately 241 billion KRW, and this fundraising will resolve the maturity debt. Wave's CB issue has been considered the biggest obstacle from the early stages of merger discussions until recently.

Researchers Minha Choi and Younghoon Kang from Samsung Securities said, "CJ ENM's investment this time goes beyond simple financial support and signals the strengthening of cooperation and integration possibilities between TVING and Wave," adding, "CJ ENM has formalized this investment as a 'strategic investment for business alliance,' and it is expected that the phased cooperation between TVING and Wave will begin in earnest."

TVING under CJ ENM and Wave under SK Square are expected to create a leading 'giant OTT' in Korea if they merge. According to app and retail analysis services WiseApp, Retail, and Goods, Netflix recorded 11.8 million monthly users last month. It was followed by Coupang Play with 7.61 million, TVING with 7.05 million, Wave with 2.6 million, Disney Plus with 2.24 million, and Watcha with 600,000 users.