[비즈한국] The stock price of Kakao035720 Group, which had plummeted, has turned red as the second half of the year begins. Following the launch of the Lee Jae-myung administration, Kakao has seen its stock price rise significantly, being identified as a beneficiary of artificial intelligence (AI) and stablecoin-related sectors. Although it entered a correction phase afterward, the price has risen again, gathering expectations from shareholders. Attention is focused on whether Kakao Group, which had been stagnant for nearly four years due to legal risks involving management, controversy over "eat-and-run" stock options, and government pressure, will be able to restore its status that had fallen this year.
As the stock prices of Kakao Group and its affiliates repeatedly experience sharp fluctuations, market attention is intensifying. After the presidential election, Kakao Group's stock price saw a frightening climb, rising nearly 30% in a single day. However, it entered a correction phase starting June 25, giving back some of its gains, only to turn red again with the opening of the stock market on July 1. Kakao Pay377300 shares even rose by approximately 9.7% (from 76,700 won to 84,200 won) compared to the previous day as of 10:20 AM on the 1st.
Kakao's stock price rose by 16% (from 44,300 won to 51,400 won) compared to the previous trading day on the first Monday (June 9) after the 21st Presidential Election (June 3). The stock, which had been maintaining the 50,000-won level, rose for five consecutive trading days from June 18 to 24 (a 36% increase). On the 24th, it reached an intraday high of 71,600 won, marking a recovery to the 70,000-won range for the first time in about 2 years and 4 months since February 2023. The surged stock price turned downward again, falling back to the low 60,000-won range within three days.
Once thriving as a "national stock," Kakao's share price had climbed to the 500,000-won range. Having grown in size, Kakao implemented a stock split on April 15, 2021, when the price was 558,000 won just before the split. However, contrary to market expectations, the stock price slid due to successive negative factors, including management's legal risks, stock sale controversies, and the government's pressure on big tech. Over the past three years, the stock price never once recovered to its post-split price of 111,600 won.
Expectations are growing among shareholders who had been "trapped" in Kakao's long-term slump. Among the affiliates, Kakao Pay has seen the most extreme stock price fluctuations. Kakao Pay’s stock price, which stood at only 26,700 won on April 9, soared to an intraday high of 114,000 won on June 25. Kakao Pay, whose stock price rose 30% (from 61,300 won to 79,600 won) compared to the previous day on June 20 alone, was eventually designated as an investment warning stock, leading to a suspension of trading on the 24th and 26th.
The stock prices of other affiliates also rose sharply. Kakao Bank323410, which had been stuck in the low 20,000-won range for the past year, reached an intraday high of 38,750 won on June 24, nearly doubling in value. On the same day, Kakao Games293490 stock also hit 23,500 won, a 30% increase from the previous day (18,100 won).
The sharp rise in Kakao Group's stock price is due to it being considered a beneficiary of the government's AI and virtual asset policies. With its launch, the Lee Jae-myung administration set out to foster the AI and digital asset industries. Recently, it drew up a blueprint to establish a new "AI Future Planning Senior Secretary" position at the Presidential Office and to create a 100 trillion won public-private fund involving citizens, corporations, and the government to invest in AI and advanced industries. Furthermore, the administration showed its will to incorporate virtual assets into the institutional framework by pushing for digital asset legislation that includes the introduction of a won-based stablecoin.
Kakao possesses four types of large language models (LLMs) developed in-house, collectively called "Kanana." The plan is to enhance the competitiveness of domestic LLMs and strengthen the AI ecosystem by unveiling its own AI models. Additionally, Kakao made headlines in February by becoming the first domestic company to form a strategic partnership with OpenAI.
Financial affiliates Kakao Bank and Kakao Pay have stepped forward for the stablecoin business. Recently, both companies entered the competition for trademark applications, showing their commitment to entering the business. Kakao Pay applied for 18 trademarks, including 'KPKRW', 'PKRW', 'KKRW', 'KRWK', and 'KRWKP' on June 17, while Kakao Bank applied for 12, including 'KKBKRW', 'BKRW', and 'KRWKKB', on June 23. If the government allows private issuance of stablecoins, Kakao, which has experience in coin issuance, will be able to respond quickly.
Kakao endured a harsh time during the previous administration. The biggest blow was the arrest of founder Kim Beom-soo, head of Kakao's Future Initiative Center. This occurred as the company was accused of manipulating stock prices to keep rival HYBE352820 in check during the acquisition of SM Entertainment. On top of this, negative factors continued, including allegations of accounting fraud at Kakao Mobility. This is the reason why Kakao's stock price rose for a while following the December 3 martial law incident.
However, there are views that there are limits to Kakao's run. First, it is noted that figures from rival Naver have been appointed to the first cabinet. Recently, Ha Jung-woo, head of Naver Cloud Center, was appointed as the AI Future Planning Senior Secretary, and Han Seong-sook, a former CEO of Naver, was appointed as a candidate for Minister of SMEs and Startups, drawing attention.
Various speculations are arising regarding the absence of any figures from Kakao. The fact that it is not completely free from legal risks is also being cited as a problem. The trial regarding the alleged stock price manipulation is still ongoing, meaning the company has not yet been fully cleared of charges. Another reason cited is that the Lee Jae-myung administration is pushing for "Sovereign AI," which seeks to move away from dependence on foreign technology and take the lead through independent development. The argument is that Kakao was not selected because it had joined hands with OpenAI early on.
While interest in stablecoins is high, some point out that the stock price boost is a bubble, as private adoption or commercialization will not be easy. There is also a warning that the rise in stock prices with the opening of the July market is a "dead cat bounce" (a temporary recovery after a sharp decline). A financial industry official stated, "Since the government has just launched, industry fostering or policy directions could change," adding, "In particular, in the case of virtual asset legislation, discussions have been going on for years. One should be cautious of stock price drops as we don't know how long it will take until implementation."