2023-05-23 21:01:21
[뉴스토마토 박준형·신대성 기자] It is evaluated that SPAC, a listed company for the purpose of merging with an unlisted company, has become a short hit playground for overseas securities companies and institutional investors. SPAC, a paper company, has the sole business purpose of merging with another company. However, in the market, it is pointed out that the specification is being used differently from the original purpose. It seems that the system needs to be improved as experts also evaluate that the domestic spec system without special listing restrictions has created a chronic problem.
Increased spec volatilityjp morgan, 15% of trading volume ‘Short Hit Trading’
Korea’s No. 10 Pack’s stock price fluctuated greatly due to the news of its merger with Crowdworks, an artificial intelligence (AI) learning data platform company. At 2945 won on the first day of trading resumption, Korea No. 10 recorded the upper limit (29.03%) and rose to 3800 won, but soon fell to minus 9.51%. The closing price is 2,790 won, down 5.26% from the initial price. On this day, the range of fluctuation between the top and bottom of Korea’s 10th reached 42.59%.
While investors seeking volatility flocked to Korea No. 10, foreign securities firm JP Morgan also pursued volatility. JP Morgan bought 190,427 shares of Korea No. 10 on the 16th. When the stock price rose by about 100 won (3.55%), some stocks were immediately sold. When the stock price goes down to the purchase price again, you buy the stock again and do ‘day trading’.
On this day, the range of change from the high point to the low point of Korea No. 10 is 22.94%. JP Morgan’s buying and selling volume is 500,687 shares, accounting for 14.82% of the total trading volume (3,378,490 shares) on the day. In fact, JP Morgan increased the volatility. In fact, the Korea Exchange designated Korea No. 10 as an investment watch item with the top trading volume of a single account (JP Morgan) on this day. From the 16th to the 18th, JP Morgan traded Korea No. 10 stock nine times.
(Graphic = News Tomato)
The power of the securities company? Specs vulnerable to stock manipulation
In the industry, it is pointed out that the short-term trading of specs by foreign securities companies is due to structural problems in the domestic spec system. The only business purpose of merging with another company is a specification that is basically vulnerable to stock price manipulation.
The SPAC is a system to help small and medium-sized businesses to raise funds smoothly by lowering the threshold to enter the stock market. If you are a company that needs an IPO, there is no reason to choose a spec merger with a small amount of funding. In the end, it can be seen as the next best thing for companies that are not easy to raise funds through IPO.
Because of this, the size of the spec has no choice but to be small. In the domestic stock market, the market capitalization of specs is usually between 10 billion and 20 billion won. There are many places where the daily trading volume is less than a few million shares. Moreover, it is not even short-selling at this time. Even if a specific force or securities company generates only a small amount of trading, the range of fluctuation will increase.
The information that investors can basically know is limited as much as SPAC aims only at mergers and acquisitions (M&A) without a business in particular. What investors can refer to is only the past reputation or M&A references of the promoter who puts the initial capital of the SPAC and discovers the merger target as the SPAC’s management. For this reason, stock prices often move greatly even in simple ‘heard’ rumors such as ‘listing with a certain company’.
Standing in place for dozens of years “The need to restrict specification listing”
Pointing out the ‘information imbalance’ of specs and structures vulnerable to stock price manipulation has been going on for decades. Since 2009, when the SPAC system was introduced in Korea, △don’t ask SPAC investment, △SPAC bomb rotation, and △SPAC overheating have been steadily pointed out by the investment industry and the media.
Experts point out that the possibility of spec listing without special regulations has raised this problem. In the case of specs, unlike general public offering (IPO), securities companies are also eager to list because there are many fees that securities companies take. A total of 45 specs were listed last year, and up to 5 specs were listed for each securities company.
As the number of large spec listings that are difficult to find mergers decreased, the number of small spec listings that reduced the size of the public offering increased. In fact, in 2010, three stock specs were listed, but there are none since. The size of the spec offering, which reached 90 billion won (Daewoo Securities spec) in 2010, has been reduced to 10 billion won in 2023.
As small-scale specifications were listed indiscriminately, the management responsibility of securities companies was also diluted. Efforts to find a merger target are also being dispersed while listing up to five specifications for each securities company.
An official from the IB industry said, “In the case of specs, even if the merger is not completed, as the principal is repaid to investors, it is inevitable that it is easy to be swayed by specific forces in the current spec market structure, where many are listed on a small scale.” As there are side effects, it seems that certain restrictions are needed for securities companies to list specs.”
Reporter Park Joon-hyung [email protected]
Reporter Shin Dae-seong [email protected]
This article was finally confirmed and corrected by Kim Eui-joong, head of the Finance and Securities Department, in accordance with the News Tomato Reporting Rules and Code of Ethics.
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