The stock price of Samsung BioLogic plunged on Nov. 12, two days ahead of a verdict from the Securities and Futures Commission (SFC) on the accounting fraud allegations against the company.
Samsung BioLogics closed at 285,500 won (US$250.99) on the benchmark KOSPI market on Nov. 12, down 22.42 percent from last Friday. It was the largest drop ever after the company was listed in 2016.
During the session, the stock once dived to 281,000 won (US$247.03), hitting a new 52-week low. The figure was less than half of the record high of 600,000 won (US$527.47) seven months ago.
In addition, Samsung BioLogics’ market capitalization decreased to 18.9 trillion won (US$16.62 billion) from 24.3 trillion won (US$21.36 billion) at the previous trading day. In short, the company lost 5.4 trillion won (US$4.75 billion) of market cap in just one day. Samsung BioLogics fell 10 spots to 14th from 4th, excluding Samsung Electronics’ preferred stock, a day ago at once in cap on the KOSPI market.
The share price of Samsung C&T Corp., the largest shareholder of Samsung BioLogics, also closed down 2.86 percent at 102,000 won (US$89.67) on the same day. It once fell to 101,000 won (US$88.79) in mid-day trading, reaching a new 52-week low as well.
According to the financial authorities, the SFC will make a final ruling on the accounting fraud allegations against Samsung BioLogics on Nov. 14. When the SFC concludes that Samsung BioLogics changed its accounting method for no justifiable reason, the company's stocks could be suspended from trading and put under review for delisting.
Biotech stock prices took a nosedive due to Samsung BioLogics shock. In particular, investors' confidence in biotech shares as a whole has been shrunk dramatically as there is disappointment in poor performance of major biotech shares, including Celltrion Inc., and a dim outlook on future performance.
With the downspin of Samsung BioLogics, the price of most biotech shares crashed on Nov. 12. The nation’s biotech bellwether Celltrion closed at 202,000 won (US$177.58), down 11.98 percent. Its stock price once fell to 200,000 won (US$175.82) during the mid-session, recording a 52-week low, but didn’t go below the 200,000 won (US$175.82) level. The price of Celltrion Healthcare Co., which ranks first in market cap on the secondary KOSDAQ market, plunged a whopping 10.3 percent, while that of SillaJen Inc., which ranks fourth, dropped as much as 9.14 percent as well.
Celltrion recorded an earnings shock in the third quarter. The company announced on Nov. 9 that it posted 73.6 billion won (US$64.7 million) in consolidated operating profit, down a whopping 44.16 percent from a year earlier and falling short of market estimates. Securities firms also lowered the company’s target stock price. Daishin Securities Co. slashed Celltrion’s target share price from 310,000 won (US$272.53) to 280,000 won (US$246.15) on the same day, while NH Investment & Securities Co. cut it from 340,000 won (US$298.90) to 270,000 won (US$237.36). Mirae Asset Daewoo Co. also lowered the figure from 400,000 won (US$351.65) to 335,000 won (US$294.51). Out of 11 securities companies which released a new analysis report for Celltrion on the day, only one securities firm did not lower the company’s target stock price. Meanwhile, KTB Investment & Securities Co. suggested the lowest target share price at 220,000 won (US$193.41).