Domestic game corporation NEXON GAMES is experiencing a sharp decline in the early hours of trading on the 11th. It is interpreted that selling pressure has intensified due to the release of a report containing a 'sell' investment opinion from the securities industry.
As of 9:14 a.m. on that day, NEXON GAMES shares are trading at 12,190 won, down 9.57% (1,290 won) compared to the previous trading day on the KOSDAQ market.
Analysis from the securities industry suggests that NEXON GAMES is expected to suffer from poor performance due to disappointing existing releases and the burden of labor costs, which is believed to have affected investor sentiment.
MERITZ Securities downgraded its investment opinion on NEXON GAMES from 'buy' to 'sell,' stating that poor performance is anticipated due to the existing release failures and labor cost burdens. The target price was also adjusted downward from 32,000 won to 10,000 won.
NEXON GAMES recorded an operating loss of 2.1 billion won in the fourth quarter of last year, marking its entry into a deficit state. MERITZ Securities forecasted that NEXON GAMES will record an annual deficit of around 50 billion won this year.
Lee Hyo-jin, a researcher at MERITZ Securities, noted, "Both 'The First Descendant' and 'Blue Archive' have performed poorly compared to expectations," adding, "In the case of 'The First Descendant,' a significant rebound is unlikely until the first anniversary update in July."
In the meantime, NEXON GAMES has conducted large-scale hiring for the Purdy team. This researcher analyzed, "The workforce, which was around 900 after the merger, has now increased to 1,400, entering a substantial cash burn phase," adding, "To enhance attractiveness, changes in workforce-related decision-making or rebounds in existing titles are necessary."