Kakao Pay employees forced to blink at the lifting of initial share lockup

Kakao Pay employees grimly would have to ignore the lifting of one-year lockup on their initial shareholding Thursday as the stock has more than halved from its initial public offering price.

The year-long lock-up on 65.75 million shares is removed on Thursday.

Kakao, its largest shareholder, holds 47.83 percent of the outstanding shares. Its employees own 3.4 million shares or 2.61 percent of the total outstanding shares. Employees of 849 on average would have bought 4,004 shares worth 360 million won ($253,378) amid high expectations to make big riches as the IPO was a blockbuster drawing more than 5 trillion won in subscription fund.

The shares traded at 38,050 won Wednesday, more than halved from IPO prices of 90,000 won and off more than 84 percent from the peak of 248,500 won on November 30 last year.

Should they sell, employees would lose 200 million won per person on average. They would be resenting former eight executives who exercised option to sell at above 200,000 won in December, whose action triggered the free fall in the stock prices. Unlike employees, executives were not under lockup restriction.

It is unclear when they will be able to redeem their losses.

The mobile pay company posted an operating loss of 9.7 billion won, much larger than the market estimate of 5.9 billion won. In addition, Apple Pay’s advance into the domestic market will likely intensify competition.

“Given its solid growth in the monthly active users, its results will likely improve. However, it needs come up with differentiated measures to beat competition,” said Kim Jae-woo, an analyst at Samsung Securities

By Ko Deuk-gwan and Jenny Lee