On the 23rd, shares of the KOSDAQ-listed corporation No Brand surged sharply following good news from Shinsegae, leading some company executives to sell their holdings for profit. At the time, the stock price of Shinsegae Group surged as Chung Yong-jin, chairman of Shinsegae Group, reportedly had discussions with Donald Trump, the president-elect of the United States. Investors mistakenly purchased shares of No Brand, a specialized apparel manufacturer and original design manufacturer (ODM), thinking it was the No Brand (NO BRAND) subsidiary of Shinsegae Group, causing the stock price to rise.
Investors are criticizing executives who should lead in enhancing corporate value for taking personal profits by exploiting the mistaken buying momentum.
According to the Korea Exchange on the 26th, an executive identified as Ko, vice president of No Brand, sold 16,621 shares of No Brand in two transactions on the 23rd for approximately 150 million won. Previously, on the 19th, Ko received 32,000 newly issued shares at 8,870 won each due to a bonus issue. He profited by selling more than half of the shares acquired through the new issuance.
On the 23rd, No Brand's stock soared by 25% during the session to reach 9,730 won due to the influx of supply and demand surrounding the positive news about Shinsegae. Afterward, as the supply and demand calmed down, the rise moderated, closing up 6.30% at 8,270 won.
In addition to Vice President Ko, who sold his company's stock, an executive named Kang also sold 3,412 shares at 9,260 won each, gaining 32 million won. Non-registered executive Lee sold 3,418 shares over three transactions on the 23rd and 24th for 31.4 million won, while director Lim sold 102 shares for about 1 million won on the 23rd.
The simple sale of company shares held by executives is not legally problematic. However, some investors criticized the executives for seizing the opportunity for trading profits from the short-term surge in stock prices while they should have been focused on enhancing the company's long-term corporate value amid declining stock prices following the announcement of the bonus issue earlier this month.
Investors expressed their concerns in stock discussion forums, saying, "Only the executives benefit from the positive news about Chung Yong-jin," and "Isn't it an act that undermines the company's credibility for the executives to sell their stocks consecutively?"
On the 4th of this month, No Brand announced a 100% bonus issue after the market close, but thereafter, the stock price fell more than 18% from 9,596 won (after stock adjustments) to 7,840 won at the end of the day.