[Market Focus] Kakao Pay Plunges on Overhang Concerns... Legal Risks Persist

Kakao Pay's stock price is showing weakness on September 3 due to concerns over an overhang (a large potential sell-off of shares).

As of 9:50 a.m. on this day, Kakao Pay is trading at 52,900 won per share, down 8.48% from the previous session. Earlier in the session, it fell as low as 51,500 won per share.

This is attributed to growing overhang concerns after news broke that Alipay, Kakao Pay's second-largest shareholder, issued a large-scale short-term exchangeable bond (EB) based on its holdings of 11,445,638 common shares of Kakao Pay (an 8.47% stake) the previous day. The exchange price (disposal price) is set at 54,744 won, totaling 626.58 billion won. The issuance date for the exchangeable bond is October 2, with a maturity date of December 29.

Previously, in July, Alipay had also announced that it would issue an overseas EB based on 4,796,168 shares, equivalent to a 3.55% stake in Kakao Pay. At that time, the EB was also a short-term bond with a three-month maturity.

Additionally, the impact of a 15-year prison sentence being sought for Kim Beomsoo, Chairman of the Management Innovation Committee and founder of parent company Kakao, is still negatively affecting the stock price trend. In the case of Kakao, the stock initially rose by about 1% in early trading, partially recovering losses from the past five days due to legal risks, but is currently showing slight weakness. KakaoBank is down 1.86%, while Kakao Games is down 0.64%.