[Market Focus] 4by4 Drops 13% on News of 30 Billion Won Rights Offering

4by4 is showing weakness in early trading.

As of 9:03 a.m. on September 8, 4by4 was trading at 12,180 won, down 13.62% (1,920 won) from the previous trading day.

It is interpreted that the selling pressure was fueled by the company's announcement last week, after the market closed, that it had decided to conduct a rights offering and public offering of forfeited shares to raise approximately 30 billion won in operating funds and more. A total of 3.1 million new common shares will be issued at 9,630 won per share, with the new shares scheduled to be listed on December 29. For the forfeited shares, a public subscription will be held from December 9 to 10.

This is a fundraising method in which existing shareholders are first given the right to purchase new shares (rights offering), and any remaining shares (forfeited shares) are then sold to general investors through a public subscription (public offering). When new shares are additionally issued to the market through the public offering of forfeited shares, the total number of issued shares increases, which dilutes the ownership percentage and per-share value of existing shareholders, and is likely to pose downward risk to the stock price.

4by4 is a content artificial intelligence (AI) solutions company. On September 4, it announced its official entry into the medical imaging solutions market by signing a strategic memorandum of understanding (MOU) with Genoray, a company specializing in X-ray diagnostic medical devices.