Approximately 80% of the 28 new stocks that debuted on the Korean stock market this year are trading below their initial offering prices. Many stocks that surged on their first day have since given back most of their gains, indicating that initial popularity has not translated into sustained price increases.
According to the Korea Exchange and the financial investment industry, as of September 11, 22 out of the 28 newly listed companies on the KOSPI and KOSDAQ markets (78.6%) are trading below their offering prices. Only six companies (21.4%) are above their initial prices, excluding SPACs and REITs from the count.
The average return of these 28 stocks compared to their offering prices is -19.1%. However, this figure shows some improvement compared to the end of August, when 23 out of 27 listed companies (85.2%) were below their offering prices, with an average return of -26.19%. The recent uptick in September, driven by some stocks rebounding and the new listing of Sky Labs, has contributed to this change.
The performance of individual stocks has varied significantly. Sky Labs, which debuted on September 4 with an offering price of 10,000 won, closed at 28,150 won, marking a 181.5% increase. Cosmo Robotics also saw a rise from its offering price of 6,000 won to 12,460 won, a 107.7% increase. Other companies like MakinaRax, Ingenia Therapeutics, Mad Up, and Axvis also traded above their offering prices.
In contrast, Peace Peace Studio has seen its stock drop 73.4% from its offering price of 21,500 won to 5,710 won. Hanpass fell 73.1% from its offering price of 19,000 won to 5,120 won, while StradVision dropped 70.3% from its offering price of 12,000 won to 3,560 won.
When comparing current prices to their first-day closing prices, the disparity is even more pronounced. Of the 28 companies that went public this year, 20 had closing prices above their offering prices on their first day, but 14 of those have since fallen below their offering prices. This suggests that initial surges in stock prices have not led to long-term gains.
Even stocks that recorded a so-called 'double' on their first day are not immune. ESTeem, which went public in March at an offering price of 8,500 won, peaked at 34,000 won on its first day but has since dropped to 3,115 won, a 63.4% decline from its offering price. IM BioLogics also saw its stock rise from an offering price of 26,000 won to 104,000 won on its first day, but it has since fallen to 14,930 won, 42.6% below its initial price.
Conversely, Cosmo Robotics and MakinaRax, which also recorded a 'double' on their first day, have given back some of their gains but remain above their offering prices. This indicates a significant divergence in stock performance among companies that initially experienced similar price surges.
The initial excitement during the offering phase has not guaranteed returns post-listing. There have been several instances where companies that achieved high competition rates during institutional demand forecasts and general subscriptions, or set their offering prices at the upper end of the desired range, are now trading below their offering prices.
A securities industry official noted, "The initial stock price is heavily influenced by limited supply and short-term demand, making it difficult to assess a company's value based solely on first-day performance." The official added, "After listing, factors such as earnings, growth potential, and the company's value determined during the offering phase become more reflective in stock prices, so it is essential to evaluate a company's fundamentals rather than just the success of the offering."
* This article has been translated by AI.
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