Kakao shares fluctuate amid founders’ detention

[Photo by Yonhap]

Kakao’s stock price experienced volatility after founder and Executive Chairman Kim Beom-su was taken into custody over allegations of stock manipulation during the acquisition of SM Entertainment.

Kakao shares were trading at 41,050 won ($29.7) as of 9:22 a.m., unchanged from the previous day. The stock opened at 40,500 won, down 550 won or 1.34 percent from the previous day, dropping all the way to 40,200 won before recovering slightly to fluctuate around the previous day’s closing price.

The Seoul Southern District Court, responsible for issuing arrest warrants, granted the prosecution’s request to detain Kim early in the morning, citing concerns over potential evidence destruction and flight risk. Kim is accused of violating the Capital Markets Act by allegedly manipulating SM Entertainment’s stock price to exceed 120,000 won to obstruct rival HYBE’s tender offer during Kakao’s acquisition of SM Entertainment in February 2023.

“I believe the truth will eventually come out, as I have never ordered or condoned any illegal activities,” Kim said as he denied the allegations during a Kakao interim group meeting during the previous week.

In the broader stock market, semiconductor stocks showed significant gains following a surge in semiconductor shares on the New York Stock Exchange overnight. Samsung Electronics was trading up 1.57 percent at 84,300 won by 9:11 a.m. This comes after the stock fell by 2.88 percent and 1.66 percent during the previous two sessions before rebounding.

SK hynix, whose stock fell for four consecutive trading days from July 17th to 22nd, 2024, also showed strength, rising 1.71 percent. Other semiconductor-related stocks, including Hanmi Semiconductor (2.68 percent), Winpac (6.33 percent), Techwing (3.69 percent), and OpenEdges Technologies (5.70 percent), also posted gains.