[Edaily Reporter KIM EUNG-TAE ] Education company DAEKYO(019680)is drawing criticism from shareholders after moving to sell its treasury stock amid the threat of delisting. The company sold its treasury stock to fund incentive payments to employees; however, this has increased the number of shares in circulation, potentially diluting the value of existing shareholders’ stakes.

According to the Financial Supervisory Service on the 11th, DAEKYO sold 162,393 common shares and 1,405,950 preferred shares the previous day. Based on the closing prices as of July 31, the total proceeds amounted to 146 million won for the common shares and 928 million won for the preferred shares.
DAEKYO’s recent disposal of treasury stock was carried out to reward employees for their performance in commemoration of the company’s 50th anniversary. Preferred shares will be awarded to all employees, while common shares will be given as rewards to long-serving employees; a total of 9,373 people will receive these shares.
This sale of treasury stock has drawn complaints from shareholders. They argue that if the company’s treasury stock is sold and enters the market, it could cause the stock price to fall due to the dilution of the value of existing shares. In particular, some point out that for company bonuses or awards, the company should use its surplus cash as a funding source rather than selling treasury stock. On an online community dedicated to stocks, one user commented, “If they want to give awards, they should use cash on hand—why sell treasury stock?” adding, “If it weren’t for these awards, the common stock price would have exceeded 1,300 won.” As of the end of the first quarter, DAEKYO’s consolidated cash and cash equivalents totaled 48.6 billion won.
Above all, criticism is mounting because DAEKYO is currently at risk of delisting due to the “penny stock” delisting measures recently introduced by financial authorities. Starting last month, the government tightened delisting requirements to swiftly weed out underperforming companies and decided to remove penny stocks—those trading below 1,000 won—from the market. Accordingly, listed companies whose stock price falls below 1,000 won for 30 consecutive trading days are designated as “monitored stocks,” and if they fail to meet the criteria for 45 out of the 90 trading days following such designation, they are immediately delisted. As of the 5th, DAEKYO’s common stock price had fallen below 1,000 won for 25 consecutive trading days, prompting a warning regarding the risk of being designated as a “monitored stock.” To be designated as a monitored stock, the common stock price must remain below 1,000 won for 30 consecutive trading days; however, DAEKYO narrowly avoided this risk when its stock price rose above 1,000 won on the 26th trading day. However, with the stock price still hovering around 1,000 won, the situation remains precarious. On the 10th, when the company sold its treasury shares, domestic stock indices closed higher, but DAEKYO’s stock closed at 1,030 won, down 7.12% from the previous trading day.
DAEKYO maintains that it is exploring various alternatives to escape penny stock status. First, the company has decided to conduct a stock consolidation this month, combining two common shares into one. Through this consolidation, the company plans to halve the total number of issued shares while raising the par value of each share from 500 won to 1,000 won, thereby addressing the stricter delisting requirements.
To offset poor performance caused by the declining school-age population, the company is also focusing on expanding its global business and securing new growth engines. Last May, the company established a “iLevel” learning center—its global education brand—in Ecuador, marking its first entry into the Latin American market. The strategy is to expand the business by optimizing the self-directed learning programs offered at these centers for the local market. Additionally, last month, its subsidiary DAEKYO Newep entered the senior care food market, signaling an expansion into the senior-friendly food sector.
A DAEKYO official stated, “To substantially enhance corporate value, we are prioritizing the restoration of competitiveness in our education business and the improvement of profitability,” adding, “We will strengthen our stable revenue base by refining our business portfolio in line with customer demand and market changes.” The official added, “We plan to enhance the execution of new businesses, including our senior care business, which we are pursuing in response to demographic and social changes such as an aging population,” and noted, “We are also continuously reviewing various measures to enhance shareholder value.”