[Edaily Reporter Kwon Oh Seok ] SOOP(067160)’s stock price is plummeting in early trading. Following a second-quarter earnings shock, negative forecasts from the securities industry appear to be driving a wave of selling.

According to MP Doctor on the 3rd, SOOP is trading at 41,700 won as of 9:07 a.m., down 13.13% from the previous trading day.
Meritz Securities released a report today stating that SOOP’s stock price is unlikely to recover without a fundamental turnaround in its business structure. The firm lowered its target price from 76,000 won to 51,000 won while maintaining its “Hold” investment rating.
Lee Hyo-jin, an analyst at Meritz Securities, stated, “SOOP’s second-quarter consolidated revenue and operating profit fell significantly short of consensus estimates, coming in at 103.8 billion won—down 11.2% year-over-year—and 12.6 billion won—down 57.9% year-over-year,” adding, “Advertising costs for content such as Valorant had an impact of 1.5 billion won, and one-time expenses, including a tax audit, also played a role.” He further explained, “The company stated that it could not disclose the specific amount of these costs.”
The analyst viewed the poor performance as more than just a matter of one-time costs. He noted, “In a situation where the core business is underperforming, dividends act as a floor for the stock price,” but added, “If business profits fall short of expectations while the payout ratio remains fixed, this loses its ability to support the bottom.”
The company is preparing three initiatives to improve its business in the second half of the year. It plans to establish a policy to attract new streamers and disclose specific details during the third quarter; improve the user experience (UI/UX) to address issues such as language barriers; and launch a new brand in collaboration with its advertising subsidiary.
However, Meritz Securities assessed that these changes alone would not be sufficient to restore investor confidence. The analyst noted, “With the second-quarter tax audit costs eliminated, a quarter-over-quarter rebound in third-quarter profits is possible,” but added, “No clear breakthrough is in sight due to the negative leverage arising from a business structure fundamentally confined to the domestic market.” He continued, “The performance of the global platform, which the market had high hopes for, remains lackluster, and the domestic business is deteriorating faster than expected,” emphasizing that “a clear turning point for the business is needed.”