The so-called "owl disclosures," in which corporations take advantage of the year-end and New Year stock market closure to belatedly release unfavorable information, repeated this year. In particular, as large-cap stocks such as POSCO FUTURE M and SKC successively announced during the final moments before the exchange closed or during holidays—when investor attention is dispersed—news of multitrillion-won contract scale reductions or business withdrawals, some say the purpose of the disclosure system, which should minimize information asymmetry, has been undermined.
According to the Financial Supervisory Service's electronic disclosure system on the 2nd, the total number of disclosures submitted by KOSPI and KOSDAQ-listed companies on the last trading day of last year, Dec. 30, was 447. Of these, 268, or 60%, were posted after 3:30 p.m., following the close of regular trading. By market, 127 of 236 KOSPI disclosures (53.8%) and 141 of 211 KOSDAQ disclosures (66.8%) were after-hours.
On the 31st, a market holiday, correction disclosures overturning previous content were concentrated. Of the 155 total disclosures on the KOSDAQ market that day, 77 (49.6%) were corrections, and on the KOSPI market, 54 of 172 (31.3%) were corrections as well. In effect, information that could significantly affect investment decisions was largely released during a period when transactions were not possible.
Major cases centered on large-scale business adjustments and downward revisions to order performance among key large-cap stocks such as secondary batteries. POSCO FUTURE M cut the amount of its mid- to long-term cathode materials supply contract signed with General Motors (GM) in July 2022 from 13.77 trillion won to 2.81 trillion won, a reduction of about 80%. The company said, "As lithium prices—the basis for setting sales prices—plunged and growth in the electric vehicle (EV) market slowed, the actual supply amount fell short of the contract."
SKC also abruptly scrapped its plan to enter the battery cathode business. Although it announced simultaneous entry into the cathode and anode businesses in Sept. 2021, it decided to drop the cathode business and proceed only with the anode business. Accordingly, the 5 trillion won investment plan scheduled over five years from 2021 to 2025 was reduced to about 4.4 trillion won.
SKC said, "With the prolonged EV 'chasm' (a temporary demand lull), investment and production across the secondary battery industry have contracted, and competition in the global value chain has intensified," adding, "We adjusted the investment scale after reviewing long-term profitability."
In addition, in the KOSPI market, SK Innovation said it reduced the amount of its new facility investment by about half from the original plan. Also, Exicure HIGHTRON disclosed that it terminated its contract with Hong Kong's UNV Digital Technology due to market uncertainty. The termination amount is about 6.7 billion won, equivalent to 123% of 2023 revenue.
The KOSDAQ market also saw disclosures of large contract terminations. Spear disclosed that its special alloy supply contract with a U.S.-based global aerospace launch company had been terminated. The termination amount is 2.0235 billion won, equivalent to 79.11% of 2024 revenue. Spear said, "The order was canceled due to changes in the counterparty's product operation schedule."
In addition, KH Construction and JangWonTech, both under trading suspension, said after the close on the 30th that the court dismissed their applications for injunctions to suspend the effectiveness of the delisting decisions. Accordingly, the two companies disclosed that delisting procedures, including a liquidation sale, will resume starting on the 5th.
An official at the Korea Exchange (KRX) said, "Owl disclosures themselves do not constitute unfaithful disclosures," but added, "We can request a re-disclosure of items released after the last trading day's close ahead of a closure of three days or more."
Experts warn that this owl disclosure practice could undermine trust in the domestic stock market. If negative information that could directly hit share prices is released during a market closure when transactions are impossible, investors will have no chance to respond and will be fully exposed to volatility risks such as sharp drops at the opening price.
A source in the financial investment industry said, "Listed companies continue the strategic behavior of choosing disclosures after the close or right before holidays to reduce the psychological impact of bad news," adding, "Although authorities have recently pushed to improve disclosure transparency, including expanding English disclosures, only when binding guidelines that can effectively block 'trick disclosures' like owl disclosures are implemented in parallel can the disclosure system's original purpose be fulfilled."