This article was displayed on the ChosunBiz MoneyMove (MM) site at 3:55 p.m. on Dec. 1, 2025.
Because shares of The Pinkfong Company, the preschool content specialist famous for "Baby Shark," have languished, financial investors (FIs) are facing complications in plans to recover their investments. Early investors who bought The Pinkfong Company when its valuation was low have little concern, but FIs that made secondary investments since 2021, including Korea Development Bank Capital, are growing increasingly worried.
On the 1st, according to the Korea Exchange (KRX), The Pinkfong Company's stock closed at 35,900 won, up 400 won (1.11%) from the previous trading day. Although the stock has recently rebounded, it still falls short of the offering price of 38,000 won. Its market capitalization is 520.9 billion won. At one time, expectations that it would become a unicorn company (market capitalization of 1 trillion won) now seem unfounded.
Those most troubled by The Pinkfong Company's weak share performance are those who bought its shares after 2021, including Korea Development Bank Capital. While the exact price of the secondary share transactions is not publicly known, industry observers estimate that The Pinkfong Company's corporate value at the time likely exceeded 700 billion won, given the period of abundant liquidity after the COVID-19 pandemic.
Korea Development Bank Capital holds a 2.92% stake in The Pinkfong Company and can sell beginning three months after listing. In addition, multiple venture capital firms — InterVest, DSC Investment, Partners Investment, Company K Partners, Positive Investment and others — also hold equity in The Pinkfong Company.
The reason The Pinkfong Company's stock has underperformed is ultimately its earnings. After the COVID-19 pandemic subsided, demand for online content cooled and profits naturally declined. Operating profit, which was 31.2 billion won in 2019, steadily decreased to 3.7 billion won in 2022. Improved operating profit of 18.8 billion won in 2024 enabled its market entry, but forecasts now predict a return to negative growth this year. The consensus among brokerages puts this year's expected operating profit at 18 billion won.
There are also concerns that the lock-up shares pledged by institutional investors who invested just before the offering will soon be released and could negatively affect the share price. Starting on the 3rd, 352,778 shares (2.5% of issued shares) will be released first, and one month later another 224,958 shares will come to market. In February and May next year, 103,698 shares and 396,398 shares respectively will become available for sale.
Shares held by investors who invested in The Pinkfong Company before its listing will also come to market. The equity held by venture investors and other shareholders that will be released one month later amounts to 9.72% of issued shares (1,396,042 shares). The volume released after three months is 8.79% (1,264,019 shares), and six months later the volume available for sale, including KT's holdings, will reach 10.11% of issued shares (1,450,650 shares).
Founded in 2010, The Pinkfong Company owns various character intellectual property (IP) including Pinkfong, Baby Shark, Hogi, Bebefin and Seeluk. Beyond videos and soundtracks, it utilizes its IP across apps, games, toys and licensing. Last year it posted sales of 97.3 billion won and operating profit of 18.8 billion won. In the first half of this year, sales were 45.1 billion won and operating profit was 8.9 billion won.
NH Investment & Securities expects The Pinkfong Company to achieve a turnaround in performance next year. It projects next year's sales for The Pinkfong Company at 218 billion won, an 18.5% increase year over year, and operating profit at 50 billion won, a 31.5% rise.
Shim Ui-seop, a researcher at NH Investment & Securities, said, "Although sales have appeared weak since 2022 due to adjustments in character-based product and licensing businesses, content business sales have continued to show solid growth and operating margins are on an upward trend," and added, "Next year, operating margins will rise along with sales growth."