[비즈한국] Mirae Asset Securities006800 is facing a turbulent atmosphere after failing to be allocated shares in the public offering of the U.S. aerospace company SpaceX. Park Hyeon-joo, Chairman of Mirae Asset Group, had previously stated in an interview that the firm would be allocated a 'significant' amount of SpaceX public offering shares. Because of this, some investors are criticizing Chairman Park.
SpaceX is also expected to have a major impact on Mirae Asset Securities' performance. It is widely assessed that the increase in valuation gains from the SpaceX investment contributed to Mirae Asset Securities' improved performance in the first quarter of this year. However, contrary to expectations, SpaceX's stock price trend has been sluggish. SpaceX's stock once rose to $225.64 (approximately 346,400 won) on June 16 (local time), but it is currently hovering around the $150–$160 range (approximately 230,000–245,000 won).
“Did They Follow Investor Protection Procedures?” FSS Launches Investigation
SpaceX was listed on the U.S. Nasdaq on June 12. In an interview with Yonhap Infomax last April, Chairman Park Hyeon-joo stated, “While there is currently a controversy regarding the overvaluation of SpaceX, it is undoubtedly a good stock, and I want to provide good opportunities to many investors,” adding, “The allocation size is confidential, but I expect a significant amount.”
However, Mirae Asset Securities did not receive an allocation of SpaceX public offering shares. This is because the lead underwriter, Goldman Sachs, notified Mirae Asset Securities at the final stage that it would not be able to allocate the shares. Mirae Asset Securities had participated as a co-underwriter during the SpaceX listing process and had been pre-allocated 2.31 million public offering shares, a scale equivalent to approximately 470 billion won.
Mirae Asset Securities Vice Chairmen Kim Mi-sup and Hur Sun-ho explained to clients, “We proceeded with the subscription as we met the qualifications and requirements to provide shares to domestic clients, having been listed as an underwriter in the U.S. Securities and Exchange Commission (SEC) filing (S-1),” adding, “We did our best to secure the shares until the end, but we received zero allocation due to the final decision made at the discretion of the U.S. lead underwriter.”
Despite the apology from Mirae Asset Securities, public sentiment is deteriorating. The Financial Supervisory Service (FSS) has also launched a related investigation. FSS Governor Lee Chan-jin said at a press conference on June 22, “We are looking into how (Mirae Asset Securities) followed investor protection procedures and what the facts were regarding the overseas underwriter’s allocation of shares,” adding, “We are also examining whether the professional investor registration process and operations were appropriate, and whether the notification of risks related to overseas investment was adequate.”
SpaceX Boosted Q1 Profits, But Stock Price Continues to Fall
This incident has poured cold water on the recent momentum of Mirae Asset Securities. Mirae Asset Securities had been enjoying a favorable trend, with net profit increasing by 288.01% from 258.2 billion won in the first quarter of last year to 1.0019 trillion won in the first quarter of this year. However, if investor trust is damaged, it could negatively affect the future performance of Mirae Asset Securities.
SpaceX is cited as one of the backgrounds for Mirae Asset Securities' strong first-quarter performance this year. Mirae Asset Securities invested in SpaceX through funds such as the Mirae Asset Global Space Investment Fund No. 1 and the Mirae Asset Global Sector Leader Investment Fund No. 1. During its first-quarter earnings conference call, Mirae Asset Securities stated, “The total investment in SpaceX, combined domestic and overseas, is around 800 billion won.” As SpaceX's corporate value recently rose, Mirae Asset Securities' valuation gains also increased. Ko Yeon-soo, a researcher at Hana Securities, evaluated last May, “The firm recognized 804 billion won in valuation gains in the first quarter alone, which was mainly thanks to the large-scale valuation gains related to SpaceX.”
However, SpaceX's stock price movement is sluggish. The offering price was $135 (approximately 207,300 won) per share, and after listing, the price rose to close at $201.80 (approximately 310,000 won) on June 16. However, the stock has been on a downward trend since then. On June 23, SpaceX's closing price was $156.11 (approximately 239,800 won).
If SpaceX's stock price falls, Mirae Asset Securities' valuation gains will decrease accordingly. Because of this, some in the financial sector are viewing Mirae Asset Securities with concern. Jang Young-im, a researcher at SK Securities001510, analyzed regarding Mirae Asset Securities, “While the increase in performance of overseas subsidiaries is positive, the fact that valuation gains were the main factor means that future profit volatility could increase depending on SpaceX's stock price, which could act as a discount factor.”
The problem is that the outlook for SpaceX is not entirely favorable. Cho Seung-bin, a researcher at Daishin Securities003540, evaluated, “While large-scale fundraising is affecting capital flows in global financial markets, valuation controversies continue,” adding, “Compared to major past tech stock listings, SpaceX's sales growth rate in the year prior to listing was relatively low at 33.2%, while its Price-to-Sales Ratio (PSR) is excessively high.”
Although Mirae Asset Securities achieved strong results in the first quarter of this year due to the SpaceX investment effect, ironically, SpaceX is being cited as a risk factor for second-half earnings. On top of this, failing to receive the allocation of SpaceX public offering shares is also negatively impacting investor trust. Mirae Asset Securities has started efforts to calm the situation, such as announcing it would consider financial compensation for investors. The financial sector is focusing on whether Mirae Asset Securities can restore trust and reverse the current sentiment.