[비즈한국] When discussing companies that were firmly targeted by the Yoon Suk-yeol administration, Kakao035720 was always at the top of the list. However, as President Yoon's emergency martial law decree has led to the possibility of impeachment, Kakao's stock price is rising rapidly. After falling as low as 32,550 won during trading on November 14, Kakao shares traded at 47,100 won on December 4. As of the 9th, the stock continues to hold in the 43,000-won range, marking a surge of over 20% in just one month.
Legal experts suggest that the prosecution's investigation into the Kakao Group may lose some of its edge. With rumors circulating about the potential replacement of Financial Supervisory Service (FSS) Governor Lee Bok-hyun, who spearheaded the investigation into Kakao, analysts are watching to see if the company can finally shake off its "prosecution-driven judicial risks."
Pension funds also load up on shares
In fact, Kakao was widely seen as being "firmly targeted" under the current administration. The FSS quickly launched an investigation into allegations that Kakao manipulated stock prices during its acquisition of SM Entertainment to hinder a tender offer by its competitor, HYBE352820, by artificially inflating SM's stock price. The Seoul Southern District Prosecutors' Office (Financial Investigation Division 2, Chief Prosecutor Jang Dae-gyu), which took over the case, requested an arrest warrant for Kakao founder Kim Beom-su, the head of the company's management innovation committee, on charges of violating the Capital Markets Act. When the court issued the warrant, Kakao's judicial risks reached their peak.
Although Chairman Kim was later released after his bail request was granted during the trial, the risks persisted. Kakao Mobility was fined a total of 99.5 billion won by the Korea Fair Trade Commission (KFTC) over allegations of "call favoring" and "call blocking," and is still under investigation by the prosecution. Kakao Mobility also faced accusations of "inflating revenue" by calculating total amounts rather than net amounts, and the Securities and Futures Commission under the Financial Services Commission decided to impose heavy disciplinary measures, including a 3.4 billion won fine, last month.
The sentiment that Kakao was being targeted gained traction after President Yoon criticized the company during an emergency economic and livelihood meeting last November, stating, "Kakao's tyranny is highly immoral and the government must take sanctions." Following this, the FSS, the prosecution, and the KFTC launched a series of crackdowns on the company.
However, the atmosphere has shifted as the nation entered the impeachment phase. On the 4th, Kakao was the stock most purchased by pension funds. They bought 33.28 billion won worth of shares, and on the following day, the 5th, pension funds bought another 9.57 billion won worth, placing Kakao in the top five of their net purchases. This reflects a judgment that Kakao's stock price had been undervalued relative to its actual worth.
The company’s performance is also not bad. Kakao recorded an operating profit of 384.7 billion won through the third quarter of this year, already surpassing the 299.9 billion won recorded for the entirety of last year, and its net profit also improved to 233.7 billion won compared to 99.9 billion won in the same period last year.
Affiliate stock prices also trending upward
KakaoBank323410 shares also rose from a low of 20,100 won in mid-November to 24,950 won on December 4, trading in the 23,000-won range as of the 9th. Kakao Games293490 also climbed from the 15,000-won range in mid-November to the current 17,000-won range, while Kakao Pay377300 rose from the 21,000-won range to the 31,000-won range.
There are high expectations for earnings improvements across affiliates, with recent brokerage reports projecting that Kakao Pay's revenue will reach 673.6 billion won and its operating profit will reach 57.6 billion won next year, an increase of 8.9% and 36.6%, respectively, compared to this year.
Forecasts suggest that stock prices could rise further as the resolution of judicial risks from investigative authorities aligns with positive performance expectations. A financial authority official remarked, "With rumors regarding the potential replacement of FSS Governor Lee Bok-hyun—who was aggressive in raising issues with Kakao—the company may be able to quickly shake off judicial risks stemming from investigative agencies, depending on how the political landscape changes in the future." The official added, "Although trials are still ongoing, if they can avoid additional indictments, wouldn't that be good news for the Kakao Group?"