Shinhan Investment Corp. assessed on the 28th that Kakao Pay is exposed to overhang risk, separate from its fundamentals. It maintained its investment opinion of 'neutral' (Hold) and did not present a target stock price. Kakao Pay's closing price on the previous trading day was 65,100 won.
Researcher Lim Hui-yeon from Shinhan Investment Corp. noted, "It is necessary to approach once the overhang has been resolved and the stablecoin business is specified," adding, "The repeated equity outflow by the second-largest shareholder could slow the pace of re-rating in a future rebound phase."
Earlier, Kakao Pay confirmed the issuance of exchangeable bonds (EB) on the 17th. The number of shares subject to exchange is 4,831,000 shares, with the possibility of expanding up to 5,367,000 shares. The exchange price is 59,100 won, and it includes a repurchase clause within the range of 90% to 102% of the reference price.
Additionally, a transaction of stock lending was concluded among Alipay, Samsung Securities, and Goldman Sachs related to this EB issuance.
Researcher Lim evaluated, "This EB issuance and stock lending structure is a transaction for hedging purposes, but considering the 12% discount issuance, the conclusion of lending transactions, and the actual public sale announcement, there is a possibility that it may be interpreted as a strategy to repay borrowed stocks by exercising the EB exchange rights after short selling."
He added, "The remaining borrowed amount of 3,181,000 shares (14.6% of the actual circulating stocks) has a high likelihood of being released into the market in the future, which is a supply-demand burden factor," stating, "This could act as a factor for increased stock price volatility for the time being."