Kakao Pay shares are shunned despite apology for executives' selloff

[Photo by MK DB]

Shares of Kakao Pay Corp. continue to slide as investors remain upset despite apology for the massive selloffs by senior executives nearly a month ago.

Kakao Pay shares lost additional 5.92 percent before noon on Wednesday to trade at 159,000 won ($132.73) apiece. They have plunged 24 percent since Dec. 9, a day before regulatory filings were made on Kakao Pay executives’ stock sales. The stock dropped 6 percent to 196,000 won on the day of disclosures. It briefly recovered to above 180,000 won on Dec. 28 but soon lost ground.

On Dec. 10, Kakao Pay, the mobile payment affiliated to South Korea’s dominant chat app Kakao Talk, disclosed its CEO Ryu Young-joon and seven other senior executives sold combined 440,000 shares of the company they had received through stock option.

The news was particularly upsetting for retail investors, who have built a high hope for the company following its blockbuster public debut in early November. Its initial public offering was oversubscribed by 30 times in retail offering.

Market experts also find the event unusual as management usually strive to minimize volatility in stock price.

Kakao Pay executives made public apology for the latest upset, explaining they had to divest their shares to take posts in other Kakao companies. Ryu will leave Kakao Pay in March to take his new position as head of Kakao Corp, the holding entity of Kakao Group. Lee Seung-hyo, managing director and chief product officer of Kakao Pay, has been assigned to lead Kakao Pay Securities Corp. The two must return their stock options before their departure from Kakao Pay.

Shin Won-keun, chief strategy office who is appointed as new CEO of the mobile payment service provider, vowed not to sell any more of his shares in the company. Shin was among the eight Kakao Pay executives who recently exercised their stock options.

The Korea Exchange, the country’s sole stock markets operator, also moving to prevent such upsetting events. It plans to check the stock option status at listed companies and upgrade management guideline.

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