The investigation into allegations of stock manipulation surrounding Kakao Corporation and its acquisition of SM Entertainment has intensified. Pros…
Once referred to as national stocks, shares of Naver and Kakao are disappointing investors with sluggish performances this year. Securities firms have consistently reduced the target stock prices for both tech giants, predicting their third-quarter results will fall short of market expectations.
The prices of two major Korean Big Tech stocks, Naver and Kakao, have continued to falter over the past few months. This is in stark contrast to the stock prices of Big Tech firms in the U.S. that have increased into the double digits, fueled by the growing artificial intelligence sector.
Kakao secured a 9.05 percent stake in SM Entertainment, becoming its second-largest shareholder, according to Kakao, Tuesday. Kakao is joining hands with SM Entertainment to strengthen its competitiveness in the music and content business. SM Entertainment issued 1.23 million new shares in the form of a paid-in capital increase, while Kakao secured 1.14 million shares through the acquisition of convertible bonds.
KakaoBank faces a bumpy road ahead in the banking business over the recent service outage of its parent company, Kakao, which revealed a serious shortfall in tech expertise and crisis management abilities. This shortfall comes after Kakao, one of the country s tech giants, capitalized on its prowess as a platform operator and relentlessly advanced into industries earmarked for smaller firms.