This article was published on Feb. 14, 2025, at 5:23 p.m. on ChosunBiz MoneyMove site.
There is an increasing number of corporations that are leveraging the secrecy of Elon Musk, CEO of Tesla and SpaceX. Some corporations have been pointed out for subtly indicating they are subcontractors of SpaceX to boost their stock prices.
According to the Korea Exchange on the 14th, L Corp, a healthcare company, has seen its stock price rise from the 4,000 won range at the beginning of the year to nearly 8,000 won. The significant increase in stock price in a short period is attributed to rumors among investors that the company will soon merge with S Corp, which is rumored to be related to SpaceX.
Both L Corp and S Corp have not officially disclosed their affiliation with "SpaceX." However, they indirectly reveal this through the description of being the "primary vendor of the world's largest private aerospace company." The company claims to be the only supplier of special alloys, which are key components in technically complex rocket launch vehicles, in the Asia region.
Doubts persist about S Corp among not only the securities industry but also the broader industrial sector. The concern is how a corporation that has never been mentioned in the industry for its technological capabilities can suddenly appear as a primary vendor.
Even if S Corp exports special alloys to SpaceX, there are suspicions that they will merely serve as an intermediary distributor. Global corporations are known to insert a company in the distribution role to conceal their subcontractors for reasons such as supply chain stability and technology protection.
An industry insider noted, "Global corporations often insert a company in between to obscure their core subcontractors," adding, "There is a high probability that there is a different vendor actually manufacturing and that the company is just taking distribution margins."
The large-scale issuance of convertible bonds (CB) and capital increases targeting investment associations by L Corp is also viewed as suspicious. Generally, entities involved in capital increases for mergers and acquisitions (M&A) raise funds through investment associations to inflate stock prices. The investment associations that invested earlier have already reached profitability due to the rise in L Corp's stock price.
Among experts, another listed company, H Corp, is presumed to be the one supplying to SpaceX. One expert remarked, "Considering its history, it is reasonable to assume that H Corp is supplying to them." However, representatives from H Corp said, "We cannot disclose whether this is true or not."
Ultimately, it seems that investors must be cautious themselves. An insider in the financial investment industry stated, "Even if S Corp is merely a nominal partner, the financial authorities cannot judge unfair trading based solely on this," adding, "It may be necessary to comprehensively assess whether there was an intent to artificially inflate stock prices for profit."
Of course, there are opinions that suggest S Corp is indeed the primary vendor. Their reasoning is based on performance. While the sales themselves are not large, it is true that S Corp's performance is on an upward trend. Even in 2023, their annual revenue was only in the 12 billion won range, but it recorded revenue of 64.4 billion won and operating profit of 13.1 billion won by the third quarter last year. The operating profit margin reached 20%. However, unlike the 2023 results, the 2024 results have not been audited by an accounting firm. Furthermore, their tangible assets amount to only 21 million won relative to their large sales.
A representative from L Corp stated, "Contrary to misconceptions in the market, S Corp oversees the entire process from raw material supply to product manufacturing and distribution for private global aerospace companies," but added, "It is difficult to say whether that company is SpaceX."