Stock price halved and out of service for 10 hours

The share price of one of the leading growth stocks “Kakao” is stumbling. On top of this year’s stock price drop by half, the extensive nationwide “Kakao outage” incident over the weekend leaves further room for possible additional stock price drops.

According to Korea Exchange on Sunday, the stock price of Kakao, which was 114,500 won at the beginning of this year, closed at 51,400 won on Friday, nosediving by 55.11%. Over the same period, the stock prices of Kakao Games, Kakao Bank, and Kakao pay plunged by 58.87%, 70.39%, and 79.55%, respectively. Currently, 69.77 trillion won of the market cap from the four companies of Kakao Group disappeared. The market cap of Kakao is similar to that of SK Hynix, 3rd in KOSPI, which is 69.52 trillion won.

Furthermore, the long-term service disruption on Saturday is expected to blow the corporate trust. As an increasing number of Kakao Talk users are transferring to alternative messenger services, including Telegram or LINE, the new profit model planned based on the commanding 40 million Kakao Talk users could receive a negative impact. Kakao announced that the Company would seek profit by adopting advertising to Kakao Talk open chats during the fourth quarter of this year.

NAVER was affected on a limited basis against Kakao. However, it would be difficult for NAVER to escape the negative impact fully as some NAVER services, including Shopping Live, did not work properly and as NAVER is a leading online platform service.


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