An inside director at domestic game developer SHIFT UP is set to realize a profit of 5.9 billion won by selling half of the shares received through stock options. As the company's share price has fallen about 50% since its listing last year and shareholder returns remain lacking, news that an executive will cash out tens of billions of won has left individual investors deflated.
According to the Korea Exchange (KRX) on the 17th, Cho In-sang, SHIFT UP's chief human resources officer (CHRO) and chief risk management officer (CRMO), plans to sell 153,256 common shares on the market at 39,150 won from Dec. 17 to Jan. 15 next year. The amount is about 6 billion won.
Cho, the CHRO, was appointed an inside director at the regular shareholders meeting in March and acquired 300,000 shares at 200 won per share by exercising stock options in Aug. last year. He is selling about half of them this time. The stated reason for the sale is to "secure funds for debt repayment."
The profit from this transaction is 5.97 billion won. Although the profit may vary as the share price fluctuates until the start of trading, additional gains are possible if the remaining equity is sold in the future.
This is not the first time a SHIFT UP executive has sold equity. Executive Vice President Min Kyung-rip and Chief Financial Officer (CFO) An Jae-woo also monetized 4 billion won each of their holdings through an after-hours block deal on Mar. 7.
SHIFT UP, once touted as a "KOSPI big catch," listed on the main board on July 11 last year. Its flagship intellectual property (IP) includes the games "Stellar Blade" and "Goddess of Victory: Nikke." On the first day of listing, the share price surged into the 70,000-won range, far above the offering price (60,000 won), and the market capitalization even exceeded 4 billion won.
However, as weak earnings and a prolonged gap in new releases persisted, the share price trended downward. On the 14th, it closed at 38,550 won, down 45.7% from the first day of listing (closing price 71,000 won), and the market cap fell to 2.273 trillion won. On this day as well, the stock was weak, trading at 37,700 won as of 2 p.m., down 2.2%.
On the 11th, the company announced preliminary third-quarter results and said it would prepare a shareholder return policy after reviewing changes in government policy and market expectations. But three days later, a disclosure was filed on a large stock sale by an executive.
SHIFT UP has been assessed as lacking in shareholder return policy. Aside from entering into a 50 billion won share buyback trust in May, the company has presented no other shareholder return measures.
Most individual investors are currently in loss territory. According to the NH Investment & Securities Namu app, the proportion of SHIFT UP investors in the red is 99.09%, and the average return is minus (-) 31.49%.
The outlook for earnings is not bright. Since Oct., five securities firms (Kyobo, Daol, Mirae Asset, Shinhan, NH) have successively lowered their target prices. As of the 16th, this year's operating profit estimate is 189.1 billion won, down 12% from 214 billion won six months ago.
Im Hee-seok, an analyst at Mirae Asset Securities, said, "With the platform and regional expansion of key IPs largely concluded and the company entering a gap period for new titles, there is no short-term momentum (upside potential)."