Celltrion directly requested individual shareholders to terminate contracts, noting that lending transactions increase stock price volatility. The bio leader Celltrion was one of the heavily targeted stocks for short selling prior to the ban. At the end of last month, when short selling was fully resumed, the company asked shareholders not to lend out the stocks necessary for short selling.
According to the financial investment industry on the 17th, early this month Celltrion sent a 'notice to shareholders regarding the termination of lending transactions' along with dividend notices by mail.
Celltrion explained in the notice, 'While lending transactions are the rights of individual shareholders, they can also be factors that expand stock price volatility in connection with short selling. Currently, the outstanding lending balance is maintained at a high level, so reducing it may positively affect stock price stability and corporate value enhancement.'
A lending transaction is one in which an investor lends their shares to another investor through a securities company and receives a fee in return, serving as a means to supply the stocks necessary for short selling.
As a bio leader in the KOSPI, Celltrion, due to its pharmaceutical and bio characteristics, was a highly valued stock with a lot of short selling transactions. After short selling transactions were fully resumed on the 31st of last month, the cumulative amount of short selling for Celltrion reached 208.9 billion won until the previous day. This ranks 9th among listed companies on the securities market, accounting for 17.29% of total transactions.
Celltrion also requested shareholders to confirm whether they agreed to the lending transaction with their securities companies. Celltrion explained, 'Some shareholders may have inadvertently agreed to the lending transaction of their held shares when opening their securities accounts. Please check again with your securities company and if you wish to terminate the lending contract, the relevant procedure can be confirmed through your current securities company.'
It added, 'We will continue to do our best to enhance the company's growth and shareholder value.'
Celltrion previously requested shareholders to terminate the lending contracts regarding their shares while sharing business status and performance outlook through a company announcement in November last year.