Kakao's shares are experiencing a significant drop following news of its planned corporate split. Although existing shareholders will receive shares in both the newly established company and the parent company, investors appear to view the split as a potential burden on the company's value.
As of 11:41 a.m. on the Korea Exchange, Kakao's stock was trading at 34,150 won, down 4,550 won (11.76%) from the previous trading day. The stock opened at 38,150 won and briefly fell to 33,600 won during the session.
The sharp decline in stock price is attributed to deteriorating investor sentiment following the announcement of the corporate split.
Earlier that day, Kakao's board of directors convened and resolved to split the company into Kakao AI (the new entity) and Kakao X (the parent company). The split will allocate shares of the new company to existing shareholders based on their ownership percentages.
Kakao AI will focus on integrating AI, advertising, and commerce, centered around KakaoTalk, while Kakao X will encompass key subsidiaries in tech finance, content, and mobility, positioning itself as a 'future value investment company.'
The split ratio was determined based on the net asset book value, with Kakao AI receiving 0.36 and Kakao X receiving 0.64. Consequently, existing Kakao shareholders will receive shares in both companies according to this ratio.
The company plans to hold an extraordinary general meeting on December 17 to finalize the split, which is set to be completed on January 1 of the following year. Following this, Kakao AI will aim for a relisting and Kakao X will pursue a change in listing on January 27.
* This article has been translated by AI.
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