Robot specialist company ROBOTIS will grant treasury shares worth 10.3 billion won to employees as performance compensation. The amount is negligible compared with the total number of shares outstanding, but the market reaction is chilly. That is because in two rounds of treasury share disposals just in January, not a single "cancellation," the core of shareholder returns, was carried out.
In the market, criticism is pouring in that before the enforcement of the Commercial Act amendment centered on "mandatory cancellation of treasury shares," the company is rushing to unload the treasury shares it holds in a "regulatory avoidance" move. The company is said to be fixated on employee jackpots and cash securing by taking advantage of the regulatory vacuum, while turning a blind eye to the trend of enhancing shareholder value.
According to the Financial Supervisory Service's electronic disclosure system on the 27th, ROBOTIS disclosed "a decision to dispose of treasury shares" after the market closed on the 23rd. The disposal is for employee performance compensation, and the recipients are 30 employees of ROBOTIS and its subsidiary ROBOTIS AI. Arithmetically, each employee will receive about 350 million won worth of treasury shares.
ROBOTIS is a robot specialist company listed on KOSDAQ in 2018 that succeeded in localizing actuators, essential parts used in robot joints. It drew attention in particular because LG Electronics is the second-largest shareholder.
Even until 2024, the share price hovered in the 20,000 won range, but it skyrocketed as last year's rally in the domestic stock market coincided with the strength of robot-themed stocks. The share price has risen 960% from early last year to recently.
However, while the share price is soaring, the company is focusing on using treasury shares rather than returning value to shareholders. ROBOTIS also disposed of 174,161 treasury shares on the 5th under the pretext of securing management resources, choosing sales and grants rather than cancellation twice in January alone.
In the market, as the political sphere accelerates efforts to push the third Commercial Act amendment centered on "mandatory cancellation of treasury shares," some note the company may have moved to dispose before passage. Although the amount is a mere 0.4% of total shares outstanding, ROBOTIS chose to grant shares to employees instead of "cancellation," which directly leads to enhancing shareholder value, drawing strong backlash from investors. If treasury shares are granted, it only burdens shareholders with potential overhang (a large supply overhang).
Some also say the future value is excessively reflected in the share price compared with the company's actual value. ROBOTIS's price-earnings ratio (PER) is 1,029.41 times, and its price-to-book ratio (PBR) is 36.26. ROBOTIS's operating profit last year is expected to be 1.8 billion won, a turnaround to the black from a year earlier. This is why the string of treasury share disposals is fueling controversy over "selling at the top."
In the stock message boards, reactions such as "They don't manage the share price and just throw a party for employees with shareholders' money," and "Are they selling treasury shares twice just in January?" coexist with the view that "Isn't it acceptable to dispose of about that amount for performance bonuses?"