Korean stock mkt faces over 200 mn shares worth lockup release in Dec

Hybe headquarters [Courtesy of Hybe]

More than 200 million shares of stocks listed on the Korean stock market, including Hybe and Kakao Games, are set to be released from their initial public offering (IPO) lockup periods this month, boding ill to the already-volatile market.

According to Korea Securities Depository (KSD) on Wednesday, 225.51 million shares of 59 listed firms on both Kospi and Kosdaq markets will be released to the market in December because their IPO stock lockup periods are due to expire. This is 33.3 percent higher from the previous month and 20.6 percent from the same month last year.

In the Kospi market alone, 58.89 million shares of nine firms will be freed from their lockups this month

A lockup agreement is signed when a company sells its new shares or goes public to prevent major shareholders including insiders from selling their shares for a specific period. In general, shareholders dump their holdings once a lockup period expires if they can expect handsome profits from stock disposal.

With massive lockup selloffs expected this month, volatility in the Korean stock market would further increase, warned market analysts.

Especially minority shareholders of Korean entertainment giant Hybe and Kakao Games should keep a close eye on their stocks this month as 5.57 percent of Hybe’s total outstanding shares are due to be freed from the mandatory provision on Dec. 9 and 3.3 percent of Kakao Games shares will be released on the next day.

Hybe shares rose 6.64 percent to 152,500 won ($117.31) in the morning session on Thursday, while Kakao Games shares were up 1.61 percent to 44,200 won.