The stock price of SOLUM, the world's second-largest company in the Electronic Shelf Label (ESL) sector, is surging. It appears that the news of Align Partners Asset Management acquiring an 8.04% stake, following VIP Asset Management's 7.99% stake, is influencing the stock price. As it has been confirmed that this acquisition surpasses the 14.96% stake held by CEO Jeon Seongho, the largest shareholder, buying activity is intensifying.
As of 9:40 a.m. on September 5, SOLUM is trading at 20,150 won, up 22.72% from the previous day.
On the previous day, Align Partners disclosed that it had secured an 8.04% stake in SOLUM through on-market purchases between August 27 and September 3. The purpose of the stake acquisition was stated as "general investment." Unlike "simple investment," which only exercises basic rights guaranteed by law such as voting rights, preemptive rights, and dividend claims, "general investment" refers to more active shareholder engagement that does not affect management control.
Previously, VIP Asset Management disclosed on July 10 that it held a 7.99% stake in SOLUM.
SOLUM has recently faced controversy due to the purchase of real estate by a family company and rumors of a spinoff of its ESL business division. On its website, SOLUM stated, "We are taking the recent issues very seriously," and added, "We are thoroughly verifying the facts with the assistance of external experts." The company also emphasized, "Regardless of the reasons, we deeply acknowledge our responsibility for the occurrence of such controversies."
Amid ongoing controversy, the emergence of domestic activist fund manager Align Partners has raised expectations among ordinary shareholders for proposals to enhance shareholder value. As of the first half of this year, the National Pension Service holds a 7.09% stake. Given the growing movement to strengthen shareholder rights, there is a possibility that shareholders will support proposals from Align Partners. Including VIP Asset Management's stake, the combined shareholding reaches 23.12%, surpassing the 16.44% held by CEO Jeon and related parties.
The financial investment industry believes that SOLUM's management has no choice but to listen to proposals from Align Partners and other shareholders.
SOLUM's growth prospects are rising as new orders increase. As of the end of the first half of this year, SOLUM's ESL order backlog reached a record high of 2.2 trillion won. Jo Eunae, a researcher at LS Securities, explained, "A meaningful increase in the stock price will be possible when profitability improvement is confirmed through a quarterly level-up in ESL revenue (higher revenue recognition rate)."
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