Following the financial authorities, Kakao showed the highest amount of short selling among domestic stocks in the past week, when the stock price plummeted as talk of regulations on large online platforms came out in the political circles.
According to the Korea Exchange on the 12th, the amount of short selling of Kakao from the 6th to the 10th was 259.4 billion won, the highest among companies listed on the KOSPI and KOSDAQ markets. In the past week, the amount of short selling of Kakao has increased by 807%, more than 8 times compared to the previous week (August 30-September 3, KRW 28.6 billion).
In particular, on the 8th, the amount of short selling was recorded at 175.9 billion won, the largest amount of daily short selling of an item since the resumption of short selling in May. As a result, Kakao was designated as an overheated short selling stock, and short selling was banned for one day, the next day, the 9th.
Recently, as financial authorities, the Fair Trade Commission, and political circles raised the need for regulation on large online platforms, Kakao’s stock price plunged. It is interpreted that investors also increased short selling of Kakao.
Short selling is an investment technique that seeks to make a profit by selling stocks first and then buying them later.
Samsung Electronics (343.6 billion won), Kakao (329.2 billion won), NCsoft (291.4 billion won), and LG Chem (251.8 billion won) rose to the top of the list of short selling transactions over the past three weeks. Kakao, NCsoft, and LG Chem are large-cap stocks whose stock prices have recently weakened due to individual issues.
In the case of NCsoft, whose stock price plummeted due to the failure of its new game ‘Blade & Soul 2’ (Blood Soul 2), short sales accounted for 6.7% of the total trading volume during this period, with Samsung Electronics (1.9%), Kakao (3.5%), and LG Chem (3.5%). 4.1%).
Although the stock price of Kakao has plummeted and the amount of short selling has increased, individual investors are increasing their investment as they see it as an opportunity to buy at a low price. This means that although the regulation of online platforms may be a factor for the share price decline in the short term, it is not expected to have a significant effect in the long term.
In the three days (8-10 days) when the stock price of Kakao fell by 15.58%, individual investors net bought Kakao worth 1.41.1 trillion won. In particular, on the 8th, when the stock price plummeted 10.06% from the previous day, the daily individual net purchase amounted to 626.2 billion won, the highest in the history of Kakao’s personal daily net purchase amount. Foreigners and institutions net sold 749.8 billion won and 292.9 billion won, respectively, for three days starting from the 8th, and individual investors have received them.
Now, the focus is on whether Kakao’s share price will rebound. The stock market is predicting a high possibility of a rebound as Kakao’s decline was so large and there are other factors for the share price to rise.
Kim Hyun-yong, a researcher at Hyundai Motor Securities, said, “It is unknown whether the regulations will extend to areas outside the financial industry, but given the current conditions, the short-term decline was very large.” He added, “The upward momentum in the content sector, such as the overseas expansion of the entertainment business including Kakao Webtoon, will still have a strong driving force in the share price despite regulatory concerns.”
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Source: 세계일보 by www.segye.com.
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