LG Energy Solutions (LG Ensol) had a tough debut. Although it entered the KOSPI’s ‘2nd place in market capitalization’, it suffered a sharp decline from the first day of listing, pushed by foreigners’ selling bombs. In the aftermath of LG Ensol’s debut, secondary battery stocks, previously called ‘battery masters’, also suffered a grenade.
According to the Korea Exchange on the 27th, LG Ensol finished trading at 505,000 won, down 92,000 won (15.41%) from the opening price on the same day. LG Ensol made a splendid debut with an opening price of 597,000 won, which is almost twice the public offering price, but immediately turned downward as selling began pouring right after opening. During the day, the drop expanded by nearly 25%.
The profit that subscribers could hold also greatly decreased as it ended with a sharp decline, far from being the ‘defeat’ that individual investors had been waiting for. Based on the closing price, investors in the public offering stock would earn 205,000 won per share. This is less than half of the 480,000 won per share in Dasang City. However, six Super Ants who subscribed for 486,000 shares through KB Securities and invested 72.9 billion won as margin earned a profit of 750 million won in just one day.
The reason for the sharp decline was the impact of foreign selling bombs. On that day, foreign investors net sold 1.5 trillion won worth of LG Ensol shares. Considering that foreigners net sold 1.6 trillion won in the KOSPI on that day, most of the total sold volume was concentrated in one LG Energy Solution stock.
The fear that LG Ensol would become a black hole absorbing stock market funds also became a reality. While foreigners continued to sell LG Ensol, institutions sold other stocks to contain LG Ensol as a passive (market-following) fund demand, and the decline in the index became stronger.
Although the stock price suffered a sharp decline, LG Ensol entered the KOSPI with the second largest market cap and gained face. LG Ensol’s market capitalization increased from 70 trillion won to 118 trillion won based on the IPO price, surpassing SK Hynix (82 trillion won) by about 36 trillion won, and ranked second in market capitalization. Following Samsung Electronics (425 trillion won), it has risen to the top of the KOSPI list.
With the emergence of new battery masters, existing battery stocks face a grenade. This is because there was a large amount of institutional shipments moving to LG Ensol after disposing of existing battery stocks. LG Chem, the parent company of LG Ensol, plunged 8.13% from the previous trading day, while Samsung SDI (-6.16%) and SK Innovation (-7.11%) also fell all at once. On that day, the market caps of these three companies evaporated about 8 trillion won.
Kim Jeong-hyun reporter virtu@hankookilbo.com
