Research Alarm Warns of Concerns Over Technology-Special Listing as a New Type of Exit Channel

On January 13, Research Alarm analyzed that the case of Sphere's merger demonstrated the potential for technology-special listing to serve as a new type of exit channel for investors.

Choi Seonghwan, a researcher at Research Alarm, stated, "Sphere (formerly Lifecementx) was a digital health company that went public in 2021 through the technology-special listing system." He added, "Sphere pursued a merger with Sphere Korea, and this merger was accounted for as a reverse acquisition."

He continued, "From the market's perspective, there is room to interpret this as an unlisted company achieving a backdoor listing through a technology-special listed company." He further clarified, "Since the merger itself was disclosed and approved through a shareholders' meeting, the issue is not about its legality."

He also emphasized, "If a technology-special listed company fails to deliver sufficient results in its core business and its listed status is instead used as a listing channel for external companies, this is far removed from the 'innovation-driven growth' that is the foundation of the system's design."

He analyzed, "The incentive for technology-special companies to maintain their listing status through business transformation, rather than performance improvement, has increased." He added, "The structural risk identified in the Sphere case is not simply a problem of a single company." Furthermore, he pointed out, "The key message is that the exceptional mechanism of technology-special listing, in the absence of post-listing management, poses an institutional risk of being appropriated as a listing platform for external companies."