Kakao’s Split Fails to Win Over Analysts as Brokerages Cut Price Targets
Kakao Corp. is moving ahead with a corporate split aimed at boosting shareholder and corporate value, but analysts have responded by cutting their price targets, citing concerns over a holding-company discount for the surviving entity and the unproven profitability of the new artificial intelligence
Kakao Corp. recently executed a corporate split, dividing into KakaoX, a holding company, and KakaoAI, focused on AI and platform operations. Analysts, however, have responded negatively, cutting price targets and citing concerns over a potential holding-company discount for KakaoX and KakaoAI's unproven profitability. The 63.5% to 36.5% split ratio, based on net asset value, has been met with skepticism.
While some, like Kyobo Securities, remain optimistic about the restructuring, many believe it will take time for KakaoAI's growth to impact the stock and that the holding-company discount could limit KakaoX's upside.
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