In July, when financial authorities raised the KOSDAQ listing-maintenance market cap threshold to 20 billion won from 15 billion won, the number of corporations falling short of the standard surged. With overall weakness in the KOSDAQ market overlapping, however, concerns are emerging that even normal corporations could be exposed to delisting risk.
According to the Financial Supervisory Service's electronic disclosure system on the 2nd, 29 corporations were designated as "issues subject to possible management designation" over the past month for failing to meet the market cap standard. The number increased sharply compared with June (4), May (1) and April (2).
Corporations with a market cap below 20 billion won include Silla SG(025870), KM Pharmaceutical(225430), OSP(368970), 골든앤에스, Soosung Webtoon(084180), 웹킵스하이텍, A.F.W(312610), Ryuk-Il C&S(191410), SEJIN T.S(067770), Pintel(291810), Jolse(018700), NC&(092600), YeSUN Tech(250930), BioInfra(199730), Humax Holdings(028080), SAMBO Industrial(009620), CXI(900120), 형지i&C, BK Holdings(050090), i-Scream edu(289010), JOYWORKS&Co(309930), Yujin Technology(240600), PhionX(900100), Finger Story(417180), NANOCMS(247660), Barunson E&A(035620), Deep Commerce, Thumbage(208640), UDMTEK(389680).
As the KOSDAQ market plunged, corporations falling short of the market cap standard popped up one after another. KOSDAQ fell 21% in July. By monthly return, it was the seventh-worst drop on record. After slipping below the 700 level in July, KOSDAQ sank to the 630 level, the lowest since Dec. 9, 2024.
Earlier, the Financial Services Commission announced in Feb. a "delisting reform plan for swift and strict exit of insolvent corporations" and said it would move up the timing of tightening delisting standards from the original schedule. Accordingly, the market cap standard that was to take effect in Jan. next year was implemented early starting in July. The Korea Exchange main board was raised to 30 billion won (previously 20 billion won), and KOSDAQ was raised to 20 billion won (previously 15 billion won).
If the market cap stays below the threshold for 30 consecutive trading days, the stock is designated for management. If it then fails to keep its market cap at or above the standard for 45 consecutive trading days within 90 trading days, it is delisted. Because failure to meet the market cap is a formal ground for delisting, a corporation that meets the condition is delisted immediately.
Among KOSDAQ investors, there are also calls for a market cap standard that reflects market conditions. One investor said, "KOSPI and KOSDAQ are posting record declines, and individual stocks are falling along with them," adding, "there are cases where the market cap falls short because of market conditions, so a supplement is needed."