In today’s briefing:
- Kumyang’s Capital Raise Drop: Breaking It Down from an Arb Trading Play
- Kum Yang: Rights Offering Capital Raise of 450 Billion Won
Kumyang’s Capital Raise Drop: Breaking It Down from an Arb Trading Play
- Kumyang’s major shareholders are backing the capital raise, committing ₩160B of the ₩450B total. We’re also likely to see some robust price support for the stock rights in early phases.
- Institutional investors still make up about 10% of the SO, with around 8% being active players. These guys could easily start dumping stock rights in bulk.
- Retail holds nearly 50% of the SO, increasing volatility and boosting chances for arb spreads. Kumyang’s stock futures have solid liquidity, making it a prime arb trading setup.
Kum Yang: Rights Offering Capital Raise of 450 Billion Won
- Kum Yang announced a rights offering capital raise of 450 billion won which will be used for facility investments and debt repayment.
- The estimated rights offering price is 38,950 won, which is 31% lower than current price (56,500 won).
- We remain negative on Kum Yang. Despite the sharply lower rights offering price relative to current price, we would avoid the rights offering.
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