According to the Korea Exchange and the Financial Supervisory Service, as of August 7, a total of 48 companies, including 10 on the KOSPI and 38 on the KOSDAQ, have announced concerns about being designated as management items due to their stock prices falling below 1,000 won. This announcement comes just over a month after the government implemented stricter conditions for maintaining listings. On August 5, 43 of these companies made their announcements in a single day, following the new delisting criteria that require companies with stock prices below 1,000 won for 25 consecutive trading days to disclose their status.
Companies that made announcements on August 5 must raise their stock prices above 1,000 won by August 12 to avoid being designated as management items starting August 13. Under the new regulations, a company will be designated as a management item if its stock price remains below 1,000 won for 30 consecutive trading days. To exit this designation, a company must maintain a stock price above 1,000 won for 45 out of 90 trading days. If the stock price does not recover, the company will enter the delisting process. Once designated, it is challenging for companies to return to normal status.
The number of companies at risk of designation may increase. As of August 7, there are approximately 160 listed companies with stock prices below 1,000 won, including 32 on the KOSPI and 131 on the KOSDAQ. This indicates that not only the companies that have announced concerns but also those that fail to rebound in stock price may sequentially enter the delisting process.
The tightening of market capitalization standards is also putting pressure on small listed companies. Since last month, the criteria for management designation have been raised from 20 billion won to 30 billion won for KOSPI companies and from 15 billion won to 20 billion won for KOSDAQ companies. Consequently, since the new criteria took effect on August 1, 56 companies have announced concerns about management designation due to insufficient market capitalization, including 12 on the KOSPI and 44 on the KOSDAQ. Among these, 28 have already been designated as management items.
As of August 7, there are 41 companies on the KOSPI and 194 on the KOSDAQ that do not meet the market capitalization criteria. Notably, 10.6% of the 1,820 companies listed on the KOSDAQ are currently below the threshold. With the simultaneous tightening of stock price and market capitalization requirements, the pressure for delisting is intensifying, particularly for smaller companies.
Companies are attempting to boost their stock prices and market capitalizations through methods such as capital increases, share buybacks, stock consolidations, and mergers and acquisitions (M&A). However, stock consolidations often lead to further declines in stock prices, and capital increases raise concerns about share dilution. M&A processes are also complicated and difficult to execute in the short term.
A financial industry official stated, "Given the limited options for quickly raising stock prices and market capitalizations, there is a high likelihood of continued cases of management designation and delisting. For companies with sound performance and financial structures, it is essential to closely examine their business improvements and self-rescue measures rather than solely relying on stock prices to assess their value."
* This article has been translated by AI.
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