Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Nexon’s stock price is down -20% from the highs made in April and -30% from its highs last year.</li>
<li>Nexon is a key beneficiary of the trend to immersive virtual worlds and live game operations</li>
<li>The best pipeline in Nexon’s history will drive higher Free Cash Flows and shareholder returns</li>
</ul>


Nexon’s stock price is down -20% from the highs made in April and -30% from its highs last year.
Nexon is a key beneficiary of the trend to immersive virtual worlds and live game operations
The best pipeline in Nexon’s history will drive higher Free Cash Flows and shareholder returns


Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Private Capital Markets

<ul>
<li>Shift Up is a game developer in Korea that recently reached the unicorn status. </li>
<li>The company is expected to launch Goddess of Victory: Nikke mobile game and Eve console game on PS5 sometime in late 2022/early 2023. </li>
<li>The CEO of Shift Up Kim Hyung-tae previously worked as an art director at NCsoft. Shift Up is expected to complete an IPO in 2023. </li>
</ul>


Shift Up is a game developer in Korea that recently reached the unicorn status. 
The company is expected to launch Goddess of Victory: Nikke mobile game and Eve console game on PS5 sometime in late 2022/early 2023. 
The CEO of Shift Up Kim Hyung-tae previously worked as an art director at NCsoft. Shift Up is expected to complete an IPO in 2023. 


Shift Up Corp - A Rising Unicorn in the Korean Game Industry

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nexon-co-ltd" target="_blank" data-smartkarma-citation="entities:16032:1" rel="noopener">Nexon (3659 JP)</a> reported Q2 earnings and Q3 forecasts today. Everything is generally "in-line" to tilting slightly light. But USD/yen volatility matters a lot. </li>
<li>The company announced a small dividend hike, from largely meaningless to ever-so-slightly less meaningless. And a plan to buy back ¥100bn of shares over 3 years. </li>
<li>The inheritance tax issue remains a big one, but overhang appears delayed and buyback accretion is small, and also appears delated. And there's an index sell at end-September.</li>
</ul>



Nexon (3659 JP) reported Q2 earnings and Q3 forecasts today. Everything is generally "in-line" to tilting slightly light. But USD/yen volatility matters a lot. 
The company announced a small dividend hike, from largely meaningless to ever-so-slightly less meaningless. And a plan to buy back ¥100bn of shares over 3 years. 
The inheritance tax issue remains a big one, but overhang appears delayed and buyback accretion is small, and also appears delated. And there's an index sell at end-September.


Nexon Q2 In-Line, New Buyback Plan Too Small To Matter Near-Term

Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

<ul>
<li>A critical issue arose lately. The Nexon heirs do not have collateral for installment payment. The Korea NTS doesn't accept shares of an unlisted company as collateral for tax payment.</li>
<li>So, the contingency plan is a direct equity sale. The more feasible would be for NXC to sell its stake in Nexon for the convenience of valuation and finding buyers.</li>
<li>The deal size is so large that it can come out in multiple block deals rather than a single buyer deal by the end of October.</li>
</ul>


A critical issue arose lately. The Nexon heirs do not have collateral for installment payment. The Korea NTS doesn't accept shares of an unlisted company as collateral for tax payment.
So, the contingency plan is a direct equity sale. The more feasible would be for NXC to sell its stake in Nexon for the convenience of valuation and finding buyers.
The deal size is so large that it can come out in multiple block deals rather than a single buyer deal by the end of October.


What We Should Know About the Nexon Inheritance Tax Dilemmas

<ul>
<li>
<a href="https://www.smartkarma.com/entities/nexon-co-ltd" target="_blank" data-smartkarma-citation="entities:16032:1" rel="noopener">Nexon (3659 JP)</a> founder Kim Jung Ju tried to sell his holdco in 2019, didn't, now shares are higher, but he passed suddenly in Q1. The stock popped.</li>
<li>Inheritance tax issues for the estate are complicated, but the buyback just executed might signal a "pause" for a while. </li>
<li>In the meantime, recent underperformance in terms of Peer-relative earnings forecasts suggests the stock could drift.</li>
</ul>



Nexon (3659 JP) founder Kim Jung Ju tried to sell his holdco in 2019, didn't, now shares are higher, but he passed suddenly in Q1. The stock popped.
Inheritance tax issues for the estate are complicated, but the buyback just executed might signal a "pause" for a while. 
In the meantime, recent underperformance in terms of Peer-relative earnings forecasts suggests the stock could drift.


Nexon Buyback May Signal End To Near-Term Relative Outperformance

Japan

Nexon Co., Ltd. mainly develops and services, online games for PC and mobile devices. The company also offers consulting services related to online-games. Nexon operates in Japan.

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Nexon (3659 JP)

Nexon (3659) | The Best Pipeline Ever

Nexon is a key beneficiary of metaverse monetization. We believe the game company has the best pipeline in its history and is set to see rising FCF...

Mark Chadwick

Shift Up Corp - A Rising Unicorn in the Korean Game Industry

Shift Up is a game developer in Korea. It is expected to launch Goddess of Victory: Nikke mobile game and Eve console game on PS5 sometime in late...

Douglas Kim

Nexon Q2 In-Line, New Buyback Plan Too Small To Matter Near-Term

Nexon (3659) earnings are up strongly this year, some improvement, some weak yen. The company announced a new buyback plan for the next 3yrs but it...

Travis Lundy

What We Should Know About the Nexon Inheritance Tax Dilemmas

This post summarizes the inheritance tax situation of the Nexon heirs, which is developing quite interestingly, as they have virtually no assets to...

Sanghyun Park

Nexon Buyback May Signal End To Near-Term Relative Outperformance

Nexon (3659) is an "event stock" because the founder wanted to sell it, he has passed, now his family/estate need to deal with the inheritance tax...

Travis Lundy

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