As of late July, 238 listed companies have failed to meet the stock price and market capitalization requirements following the tightening of delisting criteria by financial authorities. This situation affects over 3 million small shareholders, with their total stock valuation estimated at around 8 trillion won, indicating significant potential losses due to market exit.
According to data submitted by Park Min-kyu, a member of the National Assembly's Political Affairs Committee, to the Korea Exchange, as of July 25, there were 238 companies with stock prices below 1,000 won or market capitalizations failing to meet listing maintenance standards.
The majority of these companies are concentrated in the KOSDAQ market. In the KOSDAQ, 117 companies fell short of the market capitalization requirement, and 91 did not meet the stock price requirement, totaling 177 companies when duplicates are excluded. In contrast, the KOSPI market had 39 companies failing to meet the market capitalization requirement and 30 failing on stock price, resulting in a total of 61 when duplicates are excluded.
Many of these companies are at risk of delisting if they do not meet the listing maintenance conditions. Delistings have already begun this month, leading to increased losses for individual investors.
As of the end of last year, the number of small shareholders in the 238 companies that fell short of the listing maintenance criteria was 312,671, with 959,878 in the KOSPI and 2,166,832 in the KOSDAQ. Their total stock valuation was approximately 7.85 trillion won, with 1.45 trillion won in the KOSPI and 6.4 trillion won in the KOSDAQ.
Since the tightening of delisting criteria, the designation of management items has also continued. According to the Korea Exchange, from July 1, when the revised listing regulations took effect, 52 items have been designated as management items due to failing stock price or market capitalization standards as of September 4.
Under the current system, a company is designated as a management item if its stock price remains below 1,000 won for 30 consecutive trading days or if its market capitalization falls below the listing maintenance standard. If it fails to recover the standards for more than 45 trading days within 90 trading days, it will undergo delisting procedures. The current market capitalization standards are 30 billion won for the KOSPI and 20 billion won for the KOSDAQ. Originally, these thresholds were set to increase to 50 billion won and 30 billion won, respectively, starting in January next year, but the government and financial authorities have postponed the implementation to July next year to mitigate market shock.
After the grace period, the impact will widen. According to Park's office, as of July 25, a total of 471 companies will fall under the enhanced criteria set to take effect in July next year, with 114 in the KOSPI and 357 in the KOSDAQ.
Park Min-kyu stated, "It is desirable to timely address underperforming and marginal companies to enhance the soundness of the KOSDAQ market," but cautioned that using uniform criteria like market capitalization and stock price to determine delisting could put healthy companies and those with technological specializations at risk. He emphasized the need for supplementary measures to comprehensively evaluate financial soundness, technological capability, and growth potential.
* This article has been translated by AI.
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