This article was posted on the ChosunBiz MoneyMove (MM) site at 6:03 p.m. on Feb. 25, 2026.
As financial authorities have declared they will remove penny stocks trading below 1,000 won from the market, some corporations have moved preemptively to consolidate shares. They intend to merge penny stock shares to lift the share price and preemptively block the possibility of delisting. Considering that the exit of failing corporations is expected to accelerate from the second half of this year, the number of corporations pursuing share consolidations is likely to increase.
According to the Financial Supervisory Service electronic disclosure system on the 25th, a total of 12 corporations announced share consolidations between the 12th and the 24th, after the Financial Services Commission released plans to strengthen delisting requirements. Given that only 17 listed companies carried out share consolidations in all of last year, this is an unusually large number.
Most of the corporations that recently announced share consolidations are penny stocks. Except for Shinsung ENG, 11 of the companies are trading below 1,000 won. Most of these corporations' share prices will exceed 1,000 won once the consolidations are completed.
Behind this phenomenon are the delisting requirements recently announced by financial authorities. The Financial Services Commission released the "delisting reform plan for the swift and strict removal of failing corporations" and said it would strengthen the existing delisting requirements.
Under the reform plan, if a stock's price stays below 1,000 won for 30 consecutive days, it will be designated a management stock, and if it subsequently fails to trade at or above 1,000 won for 45 consecutive days within 90 days, it will be delisted. The system will take effect on July 1.
Penny stocks must quickly support their share prices to avoid delisting. Although the domestic stock market has been posting record highs day after day and continuing a rally, investment demand has flowed into large-cap stocks, and penny stock prices have hardly moved.
Share consolidation is viewed as a circumvention measure penny stock corporations can choose to avoid delisting. Merging multiple shares into one can raise the share price.
A representative of a listed company that recently announced a share consolidation said, "We judged that it will realistically be difficult to raise the stock price above 1,000 won by July, so we will first consolidate shares to meet the standard," and said, "We will concentrate on stock price management in the first half to block the possibility of delisting."
However, share consolidation alone is not a cure-all. To prevent listed companies from evading delisting through share consolidation, financial authorities have included cases "where the post-consolidation share price is below the face value" as subject to delisting. Therefore, penny stock corporations need additional share price support measures in addition to share consolidation.
A representative case is KESPION, a KOSDAQ-listed company that announced a share consolidation on the 23rd. KESPION's current face value is 500 won, and its share price is 463 won (based on the closing price on the 25th). KESPION plans to consolidate shares to a face value of 1,000 won, but in that case the share price would remain at 926 won. It would still meet the delisting criteria.
KESPION said on its website notice, "We are reviewing multiple necessary measures, including share consolidation, to escape the penny stock removal requirements, and we will make our best efforts to raise the stock price above 1,000 won," adding, "We will not rely on temporary measures to prop up the stock price and are reviewing financial restructuring and capital expansion strategies to enhance shareholder value."
According to the Korea Exchange (KRX), as of that date, a total of 225 KOSPI and KOSDAQ-listed corporations had share prices below 1,000 won.
A financial investment industry official said, "Since most small-cap stocks have no clear way to lift their prices by the second half, the number of listed companies pursuing share consolidations is likely to continue growing for the time being," and said, "It is necessary to be aware of the potential for increased short-term price volatility due to the reduced number of outstanding shares."