Kakao Bank, KakaoPay face bumpy road ahead in IPOs

Kakao Bank, KakaoPay face bumpy road ahead in IPOs

Seen above is Kakao’s signature character, Ryan. Courtesy of Kakao

FSS, Yuanta, Morgan Stanley raise questions about valuationBy Park Jae-hyukKakao’s ambitious plans to list Kakao Bank and KakaoPay on the benchmark KOSPI market in August are facing growing doubts recently from financial regulators and securities analysts, who regard the valuations of the IT firm and its financial subsidiaries as overestimated.On Friday, the Financial Supervisory Service (FSS) asked KakaoPay to correct its prospectus, submitted July 2, saying that the document may hinder reasonable investments or cause a serious misunderstanding for investors.”As a result, the overall stock issuance schedule may change, so we hope investors take this into account,” KakaoPay said in its regulatory filing.The mobile payment service provider was planning to go public on Aug. 12.Selecting three foreign financial platform operators ― America’s PayPal, Square and Brazil’s PagSeguro ― as its comparable companies, it has sought to price its stock at somewhere between 63,000 won ($55) and 96,000 won, so that its market capitalization can reach up to 12.5 trillion won.The FSS declined to disclose which parts were specifically problematic in KakaoPay’s prospectus, but its request has been interpreted by many as an order to lower the target price range, given that Krafton and SD BioSensor, both of which had also selected firms based abroad as their comparable companies, lowered their target price ranges after the financial watchdog asked them to correct their prospectuses.KakaoPay has yet to confirm whether it will lower its target price range and delay its initial public offering (IPO).
Kakao Bank, KakaoPay face bumpy road ahead in IPOs

A user makes a transaction with Kakao Bank’s mobile app. Yonhap

Yuanta Securities Korea raised questions about the valuation of Kakao Bank.”Kakao Bank is a bank, so it should do its business in compliance with banking regulations,” Yuanta analyst Jeong Tae-joon said in his report last Thursday. “Considering the nature of the banking industry, Kakao Bank’s return on equity cannot surpass 10 percent, so its target price range seems to be inappropriate.”The internet-only bank, which seeks to go public on Aug. 5, has sought to price its stock at somewhere between 33,000 won and 39,000 won, so that its market capitalization can surpass at least 15.7 trillion won, which is far higher than those of the Hana and Woori financial groups.The Yuanta analyst pointed out that the bank selecting America’s Rocket Companies, Brazil’s PagSeguro, Sweden’s Nordnet and Russia’s TCS as its comparable firms was inappropriate, saying that the choice resulted in such an excessively high target price range.”Its comparable firms are KB, Shinhan, Hana and Woori financial groups, because Kakao Bank is a domestic bank,” he said.Kakao itself has also received an unfavorable review from Morgan Stanley, which suggested an underweight rating for Kakao’s share last Wednesday, citing that it has been overestimated, compared to the share of its rival, Naver, considering their anticipated price-earnings ratios for next year.The U.S. investment bank mentioned in particular that Kakao’s stock price has already reflected expectations about the forthcoming listings of Kakao Bank and KakaoPay. It predicted that investors will shift their focus to the two financial subsidiaries, causing a drop in their parent company’s stock price.

News Related

OTHER NEWS

Earnings Beat In The Cards For NY Times' Stock?

The New York Times logo is seen on a newspaper rack at a convenience store in Washington, DC, on … [+] August 6, 2019. (Photo by Alastair Pike / AFP) ... Read more »

Forecast Of The Day: Salesforce.com's Cloud-Based CRM Revenue

Sign with logo at the regional office of Salesforce in the Silicon Valley, Palo Alto, California, … [+] November 2, 2018. (Photo by Smith Collection/Gado/Getty Images) Getty Images What? Trefis ... Read more »

Dogecoin Cofounder Blasts Crypto And Claims 'Billionaires Manipulating Markets'—Here's Why He Quit The Joke Memecoin Years Ago

Topline Though he’s kept quiet for much of dogecoin’s meteoric rise over the past year, the coin’s cofounder Jackson Palmer broke his silence to rail against cryptocurrencies in a wild ... Read more »

New Bridges, Roads, Internet And More: Here's What Made It Into The $1 Trillion Infrastructure Bill Backed By The Senate

Topline Following weeks of bipartisan negotiations, the Senate late Sunday released a 2,702-page infrastructure bill that, if approved, would authorize nearly $1 trillion for the nation’s roads, highways, bridges, transit ... Read more »

Billionaires Gautam Adani, Kuok Khoon Hong's Indian JV To Raise $605 Million From IPO

Gautam Adani addresses the media in Mumbai to unveil the company’s new global corporate brand … [+] identity and logo on February 23, 2012 in Mumbai, India. Abhijit Bhatlekar/Mint via ... Read more »

Strong Opening Move: New Month To Feature Jobs Report, Slew Of Earnings

Getty Images Getty Images Key Takeaways: Another busy earnings week ahead with Uber UBER , Lyft, Square SQ Jobs report this coming Friday dominates the data picture Square planning to ... Read more »

Uber And Lyft Race To Raise Hood On Driver Shortages, Alternative Revenue Sources

Getty Images Getty Images Key Takeaway: Driver shortages, customer hesitancy seem to be impeding the path to profitability Regulation on driver benefits could be another roadblock Investors eyeing ride-hailers’ moves ... Read more »

Pressure Descends On Market Despite Impressive Outing From Morgan Stanley

Getty Images Getty Images Key Takeaways: Morgan Stanley becomes latest big bank to impress with earnings, but stock falls China’s GDP comes in below expectations, but retail sales, industrial production ... Read more »

Big Bank Earnings: JP Morgan, Wells Fargo, Goldman Could Give Big Picture Economic View

Getty Images Getty Images Key Takeaways: Big bank earnings seen rising triple-digits year-over-year as economy recovered Tougher times could be ahead for industry as rates continue falling Weak trading activity ... Read more »

Why Did Roku Stock Drop 10% In A Week?

UKRAINE – 2021/07/04: In this photo illustration a Roku logo is seen on a screen with a silhouette … [+] of a hand holding a tv remote. (Photo Illustration by ... Read more »

What To Expect From Electronic Arts' FY22 Q1?

UKRAINE – 2021/04/23: In this photo illustration, Electronic Arts (EA) logo of a US video game … [+] company is seen on a smartphone and a pc screen. (Photo Illustration ... Read more »

Up 5% Last Week, Diodes Incorporated Stock Could Continue Its Rise

BRAZIL – 2020/10/29: In this photo illustration the Diodes Incorporated logo seen displayed on a … [+] smartphone. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images) SOPA Images/LightRocket via ... Read more »

Under Armour Stock To Trade Higher Post Q2 Release?

UKRAINE – 2021/05/05: In this Photo illustration an Under Armour logo of a sports equipment company … [+] is seen on a smartphone and a pc screen. (Photo Illustration by ... Read more »

Pandemic Blues Weighing On MGM Resorts Stock

LAS VEGAS, NEVADA – AUGUST 28: An exterior view shows the marquee at MGM Grand Hotel & Casino on … [+] the Las Vegas Strip amid the spread of coronavirus ... Read more »

Lululemon's Stock Gained 10%, Room For More?

HONG KONG, CHINA – 2021/04/18: A shopper walks past the Canadian sportswear clothing band, Lululemon … [+] logo and store in Hong Kong. (Photo by Budrul Chukrut/SOPA Images/LightRocket via Getty ... Read more »

H&R Block's Cash Flow Increases The Safety Of Its Dividend Yield

Donation money jar filled with coins in front of holiday lights getty Recap from June’s Picks On a price return basis, the Safest Dividend Yields Model Portfolio (-1.7%) underperformed the ... Read more »

Honda Motor's Stock Trading Higher Before Q1 Earnings

BRAZIL – 2020/09/05: In this photo illustration the Honda Motor Company logo seen displayed on a … [+] smartphone. (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images) SOPA Images/LightRocket ... Read more »

7% Gains Left For Walmart's Stock?

Walmart logo is displayed on a mobile phone screen photographed on surgical masks background for … [+] illustration photo during the coronavirus pandemic. Gliwice, Poland on April 21, 2021. (Photo ... Read more »

#MeToo Topples Activision Blizzard Exec After Huge Staff Revolt—$10 Billion In Market Value Lost

Topline The plight of Activision Blizzard, the nation’s largest video game company, intensified Tuesday morning with the resignation of executive J. Allen Brack, the president of subsidiary Blizzard Entertainment who ... Read more »

This Stock Has A 8.89% Yield And Sells For Less Than Book

Prospect Capital has been named as a Top 10 dividend-paying financial stock, according to Dividend Channel, which published its most recent ”DividendRank” report. The report noted that among shares of ... Read more »

Cinemark Holdings Inc Ranked Among Today's Top Shorts

Close Up Image Of A Stock Market Graph getty Earnings, jobs, and the Delta variant remained on the minds of anxious investors as the Dow and S&P 500 remained within ... Read more »

Down 40% This Year, Is Luminar Stock A Buy?

BRAZIL – 2021/04/04: In this photo illustration a Luminar logo seen displayed on a smartphone. … [+] (Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images) SOPA Images/LightRocket via Getty ... Read more »

Telephone & Data Systems Inc Ranked Among Today's Top Buys

Businessman checking stock market on digital tablet and a desktop computer Getty Investors remained on edge after the indices experienced a late-day sell-off to kick off the month of August. ... Read more »

What's New With Moderna Stock?

UKRAINE – 2020/11/16: In this photo illustration, A medical syringe seen in front of Moderna U.S. … [+] biotechnology company logo displayed on a screen. Moderna said its experimental vaccine ... Read more »

Netflix Ranked Among Today's Trending Stocks

Someone analyzing investment data on laptop getty July saw the S&P 500 hit its sixth straight month of gains at 2.3%, marking the longest month-over-month winning streak since 2018. While ... Read more »

Novavax Stock: Buy The Dip?

UKRAINE – 2020/11/24: In this photo illustration a medical syringe and a vial depicting fake … [+] coronavirus vaccine seen in front of Novavax US vaccine development company logo. (Photo ... Read more »

Where Are Bitcoin Prices Headed After Their Latest Pullback?

Technical analysts weighed in after bitcoin’s latest price movements. (Photo illustration by … [+] Chesnot/Getty Images) Getty Images Bitcoin prices have been trading primarily between $30,000 and $42,000 since late ... Read more »

Investors Eyeing Bonds For Economic Growth-Rate, Delta And Inflation Concerns

Getty Images Getty Images Key Takeaways: Markets look to bounce back as equity futures higher Crude oil looking for a bounce after falling below $70 Lyft LYFT and Akamai to ... Read more »

Deal Of The Century: How Michael Dell Turned His Declining PC Business Into A $40 Billion Windfall

After years battling Silicon Valley skeptics and Wall Street adversaries, Michael Dell has pulled off the deal of the century, borrowing and flipping his way to a $50 billion fortune. ... Read more »

Vista Equity Partners Set To Make Over $50 Million On Thoma Bravo's $6.6 Billion Stamps.com Buyout

Thoma Bravo is buying shipping software company Stamps.com for $6.6 billion. (AP Photo/Mark … [+] Lennihan) ASSOCIATED PRESS Two of the fiercest competitors in the private equity world are poised ... Read more »

Stocks To Consider As The $1 Trillion Infrastructure Bill Advances

KIEV, UKRAINE – 2018/11/13: In this photo illustration, the Applied Materials, Inc. logo seen … [+] displayed on a smartphone. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images) LightRocket ... Read more »

Limited Upside In Hyatt Stock?

SAN FRANCISCO, UNITED STATES – 2020/01/23: A view of the Grand Hyatt hotel logo seen at one of their … [+] hotels. (Photo by Alex Tai/SOPA Images/LightRocket via Getty Images) ... Read more »

Up 8% Last Week, Will Albemarle Stock Continue To Rally?

Logo www.albermale.com Albemarle stock (NYSE: ALB), a chemicals company that is also one of the largest producers of lithium – a key raw material for electric vehicle batteries – has ... Read more »

Tencent's Pony Ma Loses $3 Billion After State Media Calls Online Games ‘Spiritual Opium'

Pony Ma Huateng attends China (Shenzhen) IT Summit at Wuzhou Guest House on March 25, 2018 in … [+] Shenzhen, China. Visual China Group via Getty Images Chinese internet tycoon ... Read more »

Buy Las Vegas Sands Stock For Long-Term Gains

UKRAINE – 2021/06/27: In this photo illustration, a Las Vegas Sands Corporation logo seen displayed … [+] on a smartphone. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images) SOPA ... Read more »

China's Clampdown On Tech Firms And The Risk It Poses For Investors

Gold coin with the symbol of the Chinese yuan is clamped in the clamp. Financial concept. Isolated. … [+] 3D Illustration getty One of the hallmarks of China’s economic miracle ... Read more »

How Badly Will The Chip Shortage Impact Apple?

Close-up of blue logo on sign with facade of headquarters buildings in background near the … [+] headquarters of Apple Computers in the Silicon Valley, Cupertino, California, August 26, 2018. ... Read more »

Despite A 10% Rise Last Week Align Technologies Is Likely To See Higher Levels

Logo https://talentoptimization.org/talent-verse/align The stock price of Align Technologies stock (NASDAQ: ALGN), best known for its Invisalign dental solutions, has seen a 14% rise over the last twenty-one trading days, while ... Read more »

Will Centene Stock Rebound After An 8% Drop Last Week?

UKRAINE – 2021/04/14: In this photo illustration the Centene Corporation logo of an insurance … [+] company is seen on a smartphone and a pc screen. (Photo Illustration by Pavlo ... Read more »

Prudential Financial Stock To Top The Estimates In Q2?

UKRAINE – 2021/02/14: In this photo illustration the stock market graphics of Prudential Financial … [+] seen displayed on a smartphone with a Prudential Financial logo in the background. (Photo ... Read more »