Kakao spin-off plan faces lingering investor distrust
Kakao’s ambitious plan to split its business into two entities handling its mobile messenger and investment businesses, respectively, is facing lingering investor distrust, with its stock price falling more than 7 percent to wipe out 1.8 trillion won ($1.3 billion) of market cap following the announcement on Friday. The mobile platform giant stressed that the restructuring will take the form of a…
Kakao's plan to spin off its business into two separate companies, one focusing on its mobile messenger and the other on investment, is facing skepticism from investors, who have reacted negatively to the announcement. The stock price of the mobile platform giant has dropped more than 7 percent, erasing 1.8 trillion won ($1.3 billion) in market capitalization following the announcement on Friday.
Kakao remains confident that the restructuring will preserve shareholder value, as shares of the newly formed company will be distributed to existing shareholders in proportion to their current investments. However, investors are doubtful about whether dividing Kakao's businesses into multiple entities will improve corporate value, especially considering that its existing AI businesses have yet to generate earnings that meet market expectations.
During a board meeting on Friday, the company approved the spin-off plan to divide Kakao into KakaoAI and KakaoX. Kakao plans to finalize the spin-off by January 1st of the following year and relist KakaoAI on January 27th. KakaoAI will be a new company formed from the spin-off.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- Kakao spin-off plan faces lingering investor distrust koreatimes.co.kr
