Kakao(035720) decided to spin off the company into KakaoAI and KakaoX, sending Kakao group stocks broadly lower.
As of 10:49 a.m. on the 21st, Kakao is trading at 33,850 won, down 4,850 won (12.53%) from the previous session on the Korea Exchange.
Affiliates' shares are also sliding. Kakao Pay is down 7.12% at 41,750 won, Kakao Games is down 3.12% at 8,690 won and in transaction, and KakaoBank is down 1.18% at 20,950 won.
Kakao convened its board of directors that day and approved a spin-off plan to split into the new entity KakaoAI and the surviving entity KakaoX. Based on net worth at book value, the split ratio is KakaoAI 0.36 and KakaoX 0.64. Existing Kakao shareholders will be allotted shares in both companies according to that ratio.
KakaoAI will handle the business that links artificial intelligence (AI), advertising and commerce centered on KakaoTalk. Chung Shin-a, the current Kakao CEO, has been nominated as CEO of KakaoAI.
KakaoX will be operated as a future-value investment company in charge of major business lines such as tech-fin, content and mobility, as well as new growth businesses. Kim Do-young, CEO of Kakao Investment and head of the CA Council Group Investment Strategy Office, has been nominated as CEO.
Kakao plans to complete the split on Jan. 1 next year after an extraordinary shareholders meeting on Dec. 17. After that, it will pursue KakaoAI's relisting and KakaoX's change of listing on Jan. 27 next year.