Pearl Abyss shares fell sharply on August 12, dropping 14% in early trading despite reporting strong earnings for the second quarter. The company had seen a rise in stock prices earlier this month due to anticipation surrounding its new game, 'Crimson Desert,' but the actual results fell short of market expectations, leading to profit-taking by investors.
As of 9:40 a.m. KST, Pearl Abyss shares were trading at 31,700 won, down 5,200 won (14.09%) from the previous trading day, according to the Korea Exchange.
The company announced after the market closed on August 11 that its operating profit for the second quarter reached 67.6 billion won, a staggering 7389% increase compared to the same period last year. Revenue rose 248% to 192.6 billion won, and net profit turned positive at 99.5 billion won. On the surface, these results indicate significant improvement.
However, market expectations were even higher. According to Eugene Investment & Securities, Pearl Abyss's second-quarter revenue fell 30% short of the market consensus of 275.9 billion won, and its operating profit was 52% below the consensus estimate of 140.2 billion won.
In response, Eugene Investment & Securities lowered its target price for Pearl Abyss from 72,000 won to 50,000 won, a reduction of 30.6%. The annual operating profit forecast was also cut from 497 billion won to 402 billion won, a 19% decrease.
The stock's recent performance had been driven by earnings expectations, and the disappointing results led to a wave of selling. Pearl Abyss shares rose from 33,200 won on July 31 to 36,900 won on August 11, marking an 11.1% increase for the month. Notably, on August 4, the stock surged 5.17% in a single day.
However, the sharp decline on August 12 has erased most of the gains made this month, with the current share price falling below the closing price at the end of last month.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.