Stock Prices Fall 38% on Average from IPO
Most of foreign companies listed on the domestic stock market over the past three years showed poor performance. All but one fell below their initial public offering (IPO) prices. They suffered a drop of 38 percent from the IPO prices on average.
The number of foreign firms listed on the domestic stock market after 2016 was 11 and all of them were listed on the secondary Kosdaq market, according to Korea Exchange (KRX) on Feb. 14. Six of them were headquartered in China, two each in the United States and the Cayman Islands and one in Japan. These companies have the average rate of stock price increases to offering price at minus 37.6 percent and they all show a minus growth, except for Kolon TissueGene Inc.
Kolon TissueGene was the only company that had a growth. It is a pharmaceutical and bio firm and produces Invossa, the world’s first cell-mediated gene therapy for treating knee osteoarthritis.
Kolon Group chairman Lee Woong-yeol established TissueGene, the current Kolon TissueGene, in the United States in 1999, instead of South Korea, and went public in South Korea in 2017. Therefore, it is categorized in a foreign company. Its stock price increased by 44.4 percent from 27,000 won (US$24) of the offering price.
Meanwhile, the number of newly listed foreign companies reached 7 in 2016 but the figure decreased to 2 per year since then. Some experts say that the listing fad of foreign companies is fading away.
This is largely due to the fact that the government has decided to impose stricter regulations on the listing of foreign companies on the domestic market as 11 Chinese companies were delisted from the domestic stock market because of unclear accounting methods last year.