Kakao opened lower in early trading as it entered a labor union strike for the first time since its founding.

Members of the Crew Union at Kakao under the Korean Federation of Chemical, Textile, Food Industry Unions call for job security and more at a rally in Pangyo Station Square in Seongnam, Gyeonggi Province on the 20th last month. Kakao's labor union holds a large-scale rally, saying it will hold management responsible for the breakdown in wage talks./Courtesy of News1

At 10:36 a.m. on the 10th, Kakao was trading at 38,500 won on the Korea Exchange, down 1,000 won (2.53%) from the previous session.

Kakao's share price has remained sluggish this year. From 62,100 won at the start of the year, the stock fell 36.39% based on the previous day's close (39,500 won). On the 8th, it slid to 37,600 won intraday, marking a 1-year low.

On this day, the Korea Chemical, Fiber, and Food Industry Workers' Union Kakao Chapter will hold a partial strike from 10 a.m. to 3 p.m. Five affiliates, including Kakao headquarters, Kakao Pay, Kakao Enterprise, DK Techin, and XLGAMES, will join the strike.

This strike is the first since Kakao's founding. The union, which had clashed with management over the criteria for performance-based bonuses and the method of reflecting restricted stock units (RSUs), secured the right to strike after mediation by the labor commission fell through, and moved to strike following a vote by members.

With the stock down more than 30% from the start of the year and the first-ever strike becoming a reality, investor concerns are growing. The company posted record-high operating profit last year and in the first quarter of this year, but visible results in its artificial intelligence (AI) business have yet to be confirmed. Recent organizational restructuring issues have also weighed on the stock.

※ This article has been translated by AI. Share your feedback here.