[Market Focus] Nextchip Plunges Over 20% on Rights Offering, Retail Investors React

Proceeding with a General Public Offering Without Allocation to Existing Shareholders

KOSDAQ-listed company Nextchip saw its shares plunge early in trading on June 17 following news of a rights offering via general public subscription.

As of 10:02 a.m. that day, Nextchip shares were trading at 5,740 won, down 22.64% from the previous session. The stock opened at 5,860 won and fell as low as 5,660 won during the session, marking a new 52-week low.

Nextchip, a fabless semiconductor company specializing in automotive applications, announced after the market closed the previous day that it had decided to conduct a rights offering worth 50 billion won. The company will issue 9,398,500 new shares at an issue price of 5,320 won per share. The new shares are scheduled to be listed on August 26.

Investors are exiting en masse as the company decided to proceed solely through a general public offering, skipping the allocation to existing shareholders that would have granted them preemptive rights and thus protected a portion of their interests. In a general public offering, a large number of new shares are issued at a significant discount, which can substantially dilute the per-share value for existing investors.