Kakao's stock price fell to a 52-week low during trading on concerns over a potential strike by its headquarters union. This decline was compounded by downward revisions of target prices by analysts, dampening investor sentiment.
According to the Korea Exchange, as of 2:12 PM, Kakao shares were trading at 39,250 won, down 1,250 won (-3.09%) from the previous trading day. The stock opened at 40,000 won and briefly rose to 41,300 won before giving back those gains and dropping to 38,500 won, marking a new 52-week low.
The drop in stock price is attributed to the Kakao union's decision to hold a large rally in Pangyo, Seongnam, on June 10, signaling the start of formal collective action. The union reportedly continued mediation discussions with the Gyeonggi Provincial Labor Relations Commission until 11 PM the previous day but failed to reach an agreement.
Analysts' adjustments to target prices also appear to have weighed on investor sentiment. Daol Investment & Securities revised its target price for Kakao in a report released today.
Daol Investment & Securities stated, "Kakao is in the process of simplifying its governance structure by reducing stakes in non-core subsidiaries," adding that it views the company's focus on core businesses like KakaoTalk and artificial intelligence positively.
However, the firm noted, "Building partnerships takes time, and given the large user base, the current phase is focused on enhancing quality," while maintaining a 'buy' rating but slightly lowering its earnings estimates and valuations.
* This article has been translated by AI.
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