Investors are facing confusion after Toss Securities was accused of inflating the market capitalization of a U.S. NASDAQ-listed company, Wheeler Real Estate Investment Trust (WHLR). The reported market cap on Toss Securities differed by as much as 30 times compared to other securities platforms.
As of September 27, Toss Securities listed WHLR's market cap at 113.22 billion won (approximately $84 million). In contrast, several other platforms reported WHLR's market cap to be between $200,000 and $300,000 (27 billion to 40.5 billion won), which is about 3% of the figure provided by Toss Securities.
When a company's market cap is excessively reported, it can lead to various distortions in valuation, potentially harming investors. They rely on market cap to calculate key valuation metrics such as price-to-earnings ratio (PER), price-to-book ratio (PBR), and price-to-sales ratio (PSR).
For instance, based on the average market cap from other platforms, WHLR's PER is calculated at 0.22, while using Toss Securities' figure results in a PER of 8.1. Such extreme discrepancies can lead investors to make poor decisions based on distorted prices.
Toss Securities reports WHLR's PBR at 1.1, PER at 4.9, and PSR at 0.9. In comparison, Kiwoom Securities lists the PER at 0.6 and PBR at 0.07, while Shinhan Investment Corp. shows a PBR of 0 and PSR of 0.01. Naver Securities has marked the metrics for this stock as 'N/A,' indicating they are not calculable.
A representative from Toss Securities explained that the discrepancy arises from different interpretation standards. They stated, "The market cap for WHLR includes both common shares and two types of preferred shares listed separately on NASDAQ (WHLRP and WHLRD). This is not a calculation error but a difference in assessment criteria." They noted that the recent significant drop in the price of common shares has led to an unusual situation where preferred shares account for about 96% of the market cap, causing confusion among investors.
The representative added, "WHLR is a stock that is difficult to evaluate due to repeated stock consolidations and a large accumulation of preferred shares. However, we acknowledge that we failed to clarify the combined basis on the common stock screen, leading to investor confusion. We will review our display methods and overall user experience (UX) improvements."
WHLR is a real estate investment company listed on the NASDAQ, primarily holding grocery-anchored shopping centers in small to mid-sized cities in the eastern and southern United States. Its business model revolves around rental operations and real estate asset management, leveraging cash flow generated from grocery stores.
However, the company has been experiencing extreme volatility due to ongoing stock consolidations to meet NASDAQ's listing requirement of maintaining a stock price above $1.
* This article has been translated by AI.
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