The representative of KONA I, Cho Jeong-il, has reportedly sold a significant amount of stock worth 4.5 billion won during the recent surge in its stock price.
Since the introduction of the insider transaction pre-disclosure system in July of last year, major shareholders or executives holding more than 10% of listed corporations' equity must publicly disclose their transactions at least 30 days prior when disposing of 1% or more of the total issued shares or shares worth 5 billion won or more. However, Representative Cho only sold stocks worth 4 billion won, which does not fall under this criterion. Critics claim that the company's owner evaded the pre-disclosure system and profited by capitalizing on market trends rather than the company's value.
According to the Korea Exchange on the 15th, Representative Cho Jeong-il sold 115,600 shares on the market from the 7th to the 11th. The total amount was worth 4.5 billion won, with an average selling price of 39,309 won per share. Cho's last transaction was on July 15th of last year, when he purchased 413 shares at 14,736 won each, and comparing only the stock prices, it has risen by 167% since the time of purchase.
KONA I, a developer of the local currency platform, was selected as the operator of the Gyeonggi local currency project in 2019 when Lee Jae-myung was the governor of Gyeonggi Province. Recently, it has been grouped as a theme stock of Lee Jae-myung, leading to a significant increase in its stock price. It rose 95% from 23,800 won on the 25th of last month to 46,300 won on the 9th of this month in just two weeks.
Not only the representative of KONA I but also executives sold their stocks. Registered executive Shin Dong-woo sold all 2,000 shares of KONA I he held on the 27th of last month at 31,001 won each.
In particular, Representative Cho sold 97% of the sold shares between the 7th and 9th, and the following day, the 10th, KONA I was designated as a warning stock, leading to a decline in its stock price, which had fallen by about 7% by the previous day. There are suggestions that the company representative maximized trading profits by concluding the large sale right before the downward trend. On that day, KONA I also faced a plunge of over 20% during the trading session due to the impact of the previous day's large sale disclosure by the major shareholder.
Recently, stocks of listed companies linked to political themes have been repeatedly fluctuating during the early presidential election stage, leading to frequent cases of major shareholders and management selling company stock. Ms. Woo Son-sook, a relative of the representative of Dongsin Construction, which is considered a theme stock of Lee Jae-myung, disposed of all 95,302 shares of Dongsin Construction she held from the 1st to the 2nd. The total amount is worth 5.9 billion won.
Shin Seung-young, the representative of ATEC, another theme stock of Lee Jae-myung, announced at the end of last month that he would sell company stock worth 10.3 billion won (300,000 shares) from the 29th to May 28th.
The sale of equities by major shareholders or executives is interpreted as a signal that the stock price is at its peak. There are concerns that the frenzy surrounding theme stocks could lead to greater losses for individual investors.