Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 25 years of experience in analyzing hundreds of companies, especially in Asia. Deep expertise in the following sectors:
- Technology (E-commerce, SaaS, Internet)
- Consumer 
- Special Situations/Deep Value Plays
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

KakaoBank - End of the 1 Month Lock Up Period & More Block Selling Ahead Likely by Major Investors

Short-Selling Kakao Bank & Krafton Begins Today: Here Are Some Data Worth Checking

Privatization of Woori Financial by the End of 2021

Netmarble Sells More Kakao Bank Shares Worth 133 Billion Won - Overhang Concerns

KOSPI200 September Index Rebalance: Krafton, Kakao Bank Fast Entry Confirmed

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Event-Driven

<p>Kakao Bank announced after the market close that the Korea Post, which holds a big stake in the company, will sell its shares through a big block deal sale. The price range of the block deal is 9.9% to 13.9% lower than the closing price today (88,800 won). Citi Group Global Markets is the lead banker on this deal. </p><p>The block deal price range is from 76,457 won to 80,719 won per share. The block deal amount is expected to be from 1.05 trillion won to 1.1 trillion won. The number of shares to be sold range from 13.68m (2.9% of outstanding shares) to 15.24m (3.2% of outstanding shares). Korea Post is basically trying to take profits as Kakao Bank's share price has risen 128% from the IPO price. </p><div class="content-highlight"><p>Overall, we believe this big block deal is a big negative overhang for the existing shareholders of Kakao Bank. For the short-term investors in Kakao Bank, there may be quick, short-term trading opportunities (2-5%). However, we believe double digit returns on Kakao Bank is likely to be less likely, given the stretched valuations and likelihood of greater competitive pressures. </p></div>

Kakao Bank announced after the market close that the Korea Post, which holds a big stake in the company, will sell its shares through a big block deal sale. The price range of the block deal is 9.9% to 13.9% lower than the closing price today (88,800 won). Citi Group Global Markets is the lead banker on this deal. The block deal price range is from 76,457 won to 80,719 won per share. The block deal amount is expected to be from 1.05 trillion won to 1.1 trillion won. The number of shares to be sold range from 13.68m (2.9% of outstanding shares) to 15.24m (3.2% of outstanding shares). Korea Post is basically trying to take profits as Kakao Bank's share price has risen 128% from the IPO price. Overall, we believe this big block deal is a big negative overhang for the existing shareholders of Kakao Bank. For the short-term investors in Kakao Bank, there may be quick, short-term trading opportunities (2-5%). However, we believe double digit returns on Kakao Bank is likely to be less likely, given the stretched valuations and likelihood of greater competitive pressures. 

Kakao Bank - A Major Block Deal Is a Big Negative Overhang