Last month, SOOP (formerly AfreecaTV), which saw its stock price soar by over 60%, suddenly fell out of favor as a stock. The spread of rumors that the National Tax Service is looking into SOOP, following the Financial Supervisory Service, has led to growing concerns among securities industry insiders about external risks.
SOOP has long been branded as a hotbed of illegal activities and tax evasion. There are persistent rumors that illegal gambling and drug dealers are laundering money through streamer (individual broadcast host/BJ) sponsorship via virtual gifts. Although the company changed its name from AfreecaTV to SOOP, improving its image has not been easy.

On the 12th, SOOP shares closed at 85,200 won on the KOSDAQ market. This marks a 1.07% increase compared to the previous trading day, largely influenced by a positive report from a securities firm.
Looking at SOOP's stock price chart since February, it appears as if a mountain has risen in flat land, indicating that it surged abruptly only to fall back to its previous level. The company's stock rose nearly 60% over five trading days from January 31 to February 6 due to expectations surrounding global broadcasts by streamers on its platform. On February 5 alone, it skyrocketed by nearly 27%, with the stock price soaring from the 80,000 won range to 127,900 won by February 6.
However, it has now returned to the 80,000 won range. The dramatic change in atmosphere occurred on February 13, when it was revealed that the Financial Supervisory Service was conducting an accounting audit due to allegations of inflated revenue.
The problematic revenue area pertains to game content advertising revenue. SOOP has conducted advertising operations by soliciting streamers from its platform as service providers after winning contracts from advertisers. At this time, SOOP recognized the entire amount of the contract as revenue, but the Financial Supervisory Service argued that only the net amount after deducting payments made to the streamers should be recognized as revenue. Analysts note that this case is similar to the recent severe penalties received by Kakao Mobility for recognizing revenue based on the gross method.
Subsequently, the National Tax Service initiated tax audits on nine active Excel broadcast streamers associated with SOOP, which turned into a negative factor. The audited Excel broadcast BJs reportedly overstated the amounts paid to streamers who appeared on their shows. Allegations have emerged that some of the remuneration paid to the participating streamers was returned as under-the-table payments.
One of the BJs at the center of the controversy stated through their personal channel, "I have no connection to illegal laundering," while also noting, "There have been offers. They say they want me to launder between 40 billion and 60 billion won. When they say 'launder,' they mean turning illegal funds into legal money. If it goes through here, it becomes legal."
Last year, allegations related to drug use and money laundering also surfaced. During the National Assembly's inspection held by the Science, Technology, Information, Broadcasting, and Communications Committee, representative Park Chung-kwon of the People Power Party stated, "A streamer known as 'Gamdongran' claimed that female streamers had to engage in drug use and prostitution to participate in Excel broadcasts," and added that a former gang member streamer was arrested for allegedly using and selling drugs alongside a famous Excel broadcast streamer in the past. He also raised suspicions that money earned illegally was used to support streamers and laundered through currency exchange.
In response to the allegations, then-CEO Jung Chan-yong of SOOP remarked, "The criticism regarding Gamdongran's claims is very misguided," and stated, "I cannot know the facts, but it was an irresponsible remark." Nonetheless, he added, "We will enhance areas that have been pointed out."
As the controversy intensifies, movements of many investors pulling out can be detected. Notably, pension funds sold off SOOP shares worth 17.5 billion won from the 12th until the 11th of last month. Along with pension funds, other entities including insurance (3.1 billion won), investment trusts (3.8 billion won), other finance (1.1 billion won), private equity funds (300 million won), and foreigners (11.7 billion won) have also shown selling trends. In particular, Morgan Stanley & Co. International PLC reported that it sold 0.6% (70,012 shares) last month. Only individuals have made a net purchase of 35.6 billion won.
It is noteworthy that sell opinions, which are not commonly expressed in the domestic stock market, have also surfaced. On the 6th, Lim Hee-seok, a researcher at Mirae Asset Securities, stated in a report, "The overall duration of domestic and global live streaming markets has significantly declined since the emergence of short forms," and downgraded the investment opinion to a sell. An insider from the securities industry noted, "The fact that investigative agencies are acting simultaneously during this government vacuum period is considered a sell signal,” while recalling, “the vivid memory of the struggles that Kakao faced."
Meanwhile, SOOP announced on the 10th that it has corrected the business reports and audit reports filed from 2019 to 2023. They have switched from recognizing game content advertising revenue using the gross method to the net method as per the Financial Supervisory Service's guidelines. Consequently, the consolidated revenue for SOOP during that period has decreased slightly.
SOOP stated regarding this change in accounting treatment, "For game content advertising, we have determined that recognizing the net amount, rather than the gross, aligns better with the real transaction and accounting standards No. 1115," and drew a line.