[Market Focus] HiDeep Drops on 80% Free Capital Reduction Decision

As of 9:40 a.m. on October 21, shares of HiDeep on the KOSDAQ market were trading at 368 won, down 27.13% from the previous day's closing price. This decline appears to be due to the company's announcement of a 5-to-1 free capital reduction after the market closed.

HiDeep is a fabless company that develops UX/UI to enable users to make effective use of mobile devices, and creates total solutions including key hardware, software, semiconductor ICs, algorithms, sensors, and styluses for this purpose. The company is focusing on developing and mass-producing next-generation touch solutions and innovative stylus solutions that are applied to approximately 1.8 billion global mobile devices such as smartphones, smartwatches, tablets, and laptops.

For the first half of this year, HiDeep reported sales of 1.36 billion won and a net loss of 4.56 billion won. Of the loss, 760 million won was stock-based compensation, which does not involve cash outflow. In the second quarter, the company also raised funds by issuing 10 billion won in convertible bonds.

After the market closed on October 20, HiDeep announced that it had decided to carry out a 5-to-1 free capital reduction of its common shares to offset accumulated losses and improve its financial structure. As a result, the total number of common shares issued will decrease from 154,783,114 to 30,956,622, and the capital stock will be reduced from 15.47831 billion won to 3.09566 billion won. The record date for the capital reduction is December 18, and the newly listed shares are scheduled to be listed on January 15 next year.