Unlisted stocks such as Curly and Dunamu, whose stock prices have fallen more than 70% from the peak at the beginning of this year from the end of last year, are appearing one after the other. Analysts say the decline in asset prices driven by the rise in interest rates has spread to the over-the-counter stock market.
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According to ‘Securities Plus Unlisted’, an unlisted stock exchange on the 30th, Curly, which operates Market Curly, was recently traded at 30,600 won per share. It fell 73.6% from the peak in January (116,000 gained). Dunamu, which operates the cryptocurrency exchange Upbit, recorded 136,000 won, down 73.8% from the peak of 520,000 won in November last year.
Viva Republica, which operates Toss, cut a quarter from 157,000 won (last November) to 41,100 won. Kakao Mobility (-79.5%), Yanolja (-52.2%), and K-Bank (-53%) also recorded significant declines from their peak.
Individual investors who flocked to the over-the-counter stock market are suffering huge losses as they see publicly offered stocks such as SK Biopharmaceuticals and Kakao Bank soar after listing last year. In particular, there are comments that the 20s and 30s who led the ‘out-of-the-box craze’ will suffer great damage. It is estimated that people in their 20s and 30s account for around half of unlisted stock transactions.
Last year, interest in unlisted stocks increased due to the success of listings such as Kabang.
As online investment becomes possible, individuals engage in ‘don’t ask for investment’
Until last year, OTC stocks were called the ‘unscratched lottery’. When you buy stocks of companies with promising businesses like fintech and bio, you heard news about a listing promotion soon after. The stock price fluctuated even before the IPO. The fast investor made huge profits in a short period of time. As success stories piled up, more and more ants joined the OTC market.
This trend started in earnest in the first half of last year. When the KOSPI index, which reached its peak, showed sluggish flow, he aimed for another opportunity outside the market. As the newly listed Kakao Bank and Kakao Pay succeeded in time, the fever of the unlisted stocks became so hot that it was called ‘the world’.
○ Unlisted stock prices fall
Things changed drastically this year. This is because the decline in asset prices driven by global inflation and aggressive interest rate increases by central banks around the world in response to it has spread to the over-the-counter market. Since the end of last year, unlisted stocks whose stock prices have been cut in half or, in extreme cases, cut by a third or a fourth from the peaks formed at the beginning of this year, appears one after the other.
Dunamu, which was a popular stock in the OTC market, traded up to 520,000 won in November last year, but recently traded at 136,000 won. 73.8% plunged. Viva Republica, which operates Toss, similarly fell from 157,000 won to 41,100 won over the same period. Curly soared to 116,000 won in January this year, but recently fell to 30,600 won. It is also 1/4 of a piece. Kakao Mobility (-79.5%), Yanolja (-52.2%), and K-Bank (-53.0%) also fell by more than half from their peak.
○ Private exchange which encouraged trading
With the emergence of private exchanges ants can easily get their hands on unlisted stocks, which were considered the ‘exclusive property of institutions’. Representative examples are Securities Plus Unlisted, Seoul Exchange Unlisted, and Angel League. These exchanges have simplified the procedure for investing online in over-the-counter stocks traded through direct trading.
Side effects also occur. When the bubble burst, no buyers appeared. It is also difficult to grasp the position of investment companies. This is because, unlike listed stocks, there is no public announcement, and company-related news rarely comes out as news.
Angel League introduced a service that invests in unlisted stocks with high prices per share in the form of an investment association. About 200 private investment associations were created on the news that promising start-ups could be bought in units of 10,000 won. For example, eight cooperatives were formed to invest in Mesh Korea, the operator of Vroom, a distribution platform undergoing rehabilitation. These associations invested between February last year and January this year with a corporate value of 505 billion to 630 billion won, but the current ransom is mentioned to be around 60 billion won.
○ The inevitable loss of the 2030 generation
It is estimated that the generation in their 20s and 30s, who led the over-the-counter crash, are suffering particularly heavy losses. At Securities Plus Unlisted, the largest OTC stock exchange in Korea with 1.3 million members, between October 2020 and October last year, 43.78% of users were in their 20s and 30s. During the first half of last year, the percentage of users in their 20s and 30s in the Angel League reached 56%.
Financial authorities are stepping in very late to protect investors. Last June, the Financial Services Commission ordered an unlisted stock trading platform to provide protection at the level of K-OTC, an unlisted institutional stock exchange. The key is to make the publishing company’s occasional and regular disclosure system mandatory.
As companies that did not meet the trading requirements exited, the number of trading items plummeted to around a fifth. Securities Plus unlisted stocks fell from more than 450 to 60. As new purchases are blocked, existing investors are also complaining that it has become more difficult to recover their investment.
Reporter Park Eui-myeong uimyung@hankyung.com
