© Archyde.com. Naver shares price drop to 170,000 won on acquisition of Poshmark… The reason is?
As the stock price plummeted on the news that NAVER (Naver (KS:)) is pursuing an acquisition of an online fashion platform in North America, its market capitalization evaporated to 2.8 trillion won in one day. As concerns about earnings were added to the evaluation that Poshmark’s corporate value was overvalued, it had a negative effect on the stock price.
According to the Korea Exchange on the 5th, Naver closed at 176,500 won, down 17,000 won (8.79%) from the previous trading day in the stock market the previous day. It fell to 175,500 won during the day, replacing the 52-week low.
It is the first time in two years and five months since Naver stock price fell below 180,000 won on April 21, 2020 (178,500 won). Foreigners and institutions net sold 315.3 billion won and 5.1 billion won, respectively, and individuals net bought 315.3 billion won. The size of the market capitalization was 2.895.5 trillion won, down from 3.17 trillion won the previous day, 2.788.8 trillion won in one day.
Naver’s downtrend is believed to have been negatively affected by the news that it was acquiring North America’s largest fashion C2C platform, Poshmark, at a price higher than the current share price.
Naver announced on the previous day that it would acquire 91,272,609 shares of Poshmark for about 2.34 trillion won before the market started. The expected date of acquisition of the shares is April 4, next year. When the acquisition is completed, Poshmark will be incorporated as an affiliate of Naver, which operates an independent business.
It is expected to proceed as a merger between a special-purpose subsidiary established by Naver and Poshmark. It is known that it has already received a confirmation of the voting right, which exceeds the quorum of the merger resolution, which is close to 80%.
Naver said, “We are planning to securitize some of Naver’s cash, available borrowings, and some investment assets by taking over 100% cash. did.
Naver evaluated Poshmark’s enterprise value at $17.9 per share and a net enterprise value of $1.2 billion (about 1.7 trillion won). As of the closing price of the 3rd (local time), Poshmark closed at $15.57 on the Nasdaq.
Another concern is that Poshmark’s operating profit loss in the first half of the year is widening. Poshmark’s operating profit in the second quarter of this year was negative (-) 22.91 million dollars, which expanded the loss compared to the first quarter (-14.44 million dollars).
Naver said, “The slowdown in the growth of the e-commerce market is playing a big role, but the GMV (transaction amount) is not stagnant, it was 20-30% growth in previous years, but this year it has slowed to about 10%.” Therefore, additional monetization will be possible.”
Meanwhile, on the same day, IBK Investment & Securities lowered its target price of Naver to 315,000 won and maintained its ‘buy’ investment rating. Lee Seung-hoon, a researcher at IBK Investment & Securities, said, “The target price was calculated by reflecting the valuation of the global PEER group and the decline in the value of its stake in Z Holdings. be done,” he analyzed.