Rznomics Soars on First Day, Hits Upper Limit on Second Day After Listing on December 18
More New Stocks Show 'L-Shaped' Pattern: Initial Surge Followed by Decline
Individual Investors Suffer Losses After Investing in Newly Listed KOSDAQ Stocks
As the end of the year approaches, signs of overheating are emerging in the initial public offering (IPO) market. With some newly listed companies such as Aimed Bio and Rznomics surging immediately after listing, the number of individual investors entering the market for new stocks is increasing. However, as the share prices of many newly listed companies repeatedly soar on the first day and then decline, individual investors are also experiencing growing investment losses.
According to the financial investment industry on December 22, individuals recorded a cumulative net purchase of 106.1 billion won in the KOSDAQ market over the past month. During this period, the KOSDAQ index rose by 4.16%.
Looking at the top net purchases by individuals from November 19 to December 19, Alteogen, Aimed Bio, G2GBio, Nota, and Theraview were among the most purchased. Individual investors concentrated their buying on the biotech sector and newly listed companies.
Among the listed companies currently showing valuation losses based on the average purchase price per share and current price, newly listed firms such as G2GBio, Nota, Theraview, Pescaro, Nara Space Technology, and CMTX accounted for a high proportion.
Individuals who invested in Theraview and Pescaro are facing average losses of more than -30%. Theraview, the first British company to be listed on KOSDAQ, made its debut on December 9 at 16,000 won, which is 100% higher than its offering price of 8,000 won. The next day, it briefly rose to 20,800 won during trading, but by December 19, it had dropped to 10,060 won. After an initial surge, the stock has continued to decline. Over eight trading days, individuals recorded a cumulative net purchase of 84.3 billion won. The average purchase price exceeds 15,000 won.
Pescaro, a company specializing in integrated vehicle security platforms, entered the KOSDAQ market on December 10 with an offering price of 15,500 won. On the first day, it started trading at 45,000 won but closed at 27,100 won. The current price has plummeted to 20,350 won. The average purchase price for individuals, who bought 82 billion won worth of shares, exceeds 30,000 won. It appears that most individuals bought shares on the first day of listing and missed the opportunity to cut their losses.
The reason individuals are concentrating on newly listed companies is that they believe they can make short-term profits on the first day of listing. On the first day, share prices move between 60% and 400% of the offering price, which is much more volatile than existing stocks that typically fluctuate between -30% and 30%. Furthermore, the recent trend of newly listed companies soaring on their first day has fueled speculative sentiment. Rznomics, which was listed on December 18, rose 4.2 times its offering price of 22,500 won in just two days. On the first day, it surged 300% above the offering price, and on the following day, it rose another 30%. Aimed Bio, which was listed on December 4 at an offering price of 11,000 won, is now trading above 70,000 won. In just 12 trading days, the price has increased by 540%.
An official from the financial investment industry stated, "There is a strong tendency among investors to seek short-term profits by taking advantage of the high volatility of new stocks on the first day of listing," and added, "It appears that the majority of investors are not making profits," urging caution.
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