[Edaily Reporter Kim Hyung-il ] The “quadruple” craze that fueled the KOSDAQ initial public offering (IPO) market in the first half of the year has faded in the second half. While a string of stocks soared to four times their offering price on their first day of trading, the enthusiasm cooled as instances of stock prices falling below the offering price became widespread. Although some newly listed companies saw a turnaround last month, with their stock prices significantly exceeding the offering price on their listing day, analysts say it remains unclear whether the IPO market’s recovery will continue due to investor sentiment being swayed by stock market trends and the risk of stock price declines resulting from overvalued offering prices.

According to MP Doctor on the 15th, among the new KOSDAQ listings in the second half of the year, a number of stocks traded below their IPO price on their first day of trading. #HLGenomics, which listed in July, closed 31.2% below its IPO price on its first trading day, while #HatchTech LTD., which listed in August, closed 39.4% below its IPO price. This means that no company has achieved a “quadruple”—rising to four times the offering price on its first trading day—since the start of the second half of the year. Analysts attribute this to the fact that expectations for growth stocks, which had risen on the back of the strong stock market in the first half, have weakened amid a market correction, leading newly listed stocks to show divergent performance depending on their corporate value and offering price levels.

In September, all six newly listed companies closed above their IPO prices on their first trading day. #NeoSapiens and #WisePlanetCompany closed at more than three times their IPO prices on their first day of trading. Unlike the previous two months, the improvement in performance on the listing day may have been driven by a recovery in investor sentiment following a stock market rebound. The securities industry suggested that the performance of newly listed stocks may have improved during the process of a rebound in August and September, following the first-half bull market and a correction in June and July.

In fact, the KOSDAQ IPO market saw a string of “quadruple-price” cases in the first half of this year. Six companies—#ESteem Co., Ltd., #AXBIS CO.,LTD., #IMBiologics Corp., #COSMO ROBOTICS CO., Ltd., #Poled Co., Ltd., and #MakinaRocks Co., Ltd.—saw their stock prices rise 300% compared to their IPO prices on their first trading day, and Poled Co., Ltd. and COSMO ROBOTICS CO., Ltd. even achieved a “quadruple-price-and-limit-up” by climbing to four times their IPO price before hitting the daily price limit.

However, the stock prices of most companies that achieved a “quadruple” on their first day of trading have recently fallen below their IPO prices. ESteem Co., Ltd., which debuted on KOSDAQ at an IPO price of 8,500 won, saw its closing price rise to 34,000 won on its first day of trading, but its closing price on the 15th was 2,730 won—a 67.9% drop from the IPO price. The company posted an operating loss starting in the first quarter, immediately following its listing, and continued to post losses in the second quarter. This case illustrates that for the initial listing buzz to translate into sustained stock price growth, it must be backed by the company’s earnings and growth potential.

Another factor is the shortening of investors’ attention spans toward specific industries. A securities industry official stated, “In the past, with industries like the secondary battery sector experiencing sustained growth over several years, related companies likely maintained strong stock prices even after going public,” adding, “Now, however, interest in industries has a shorter lifespan, and it seems that attention drops sharply after a company goes public.” The official continued, “In a generally unfavorable market environment, investing in IPO stocks with higher volatility can also be burdensome.” This means that even if expectations for a specific sector are high during the public offering phase, newly listed stocks may struggle to sustain buying momentum if investor interest shifts to other industries by the time of listing.

Lee Sang-heon, an analyst at iM Securities, analyzed that stock market trends and offering price levels influence IPO performance. “When the stock market was strong, valuations rose and some IPOs even tripled in value, but stock prices began to fall after mid-June,” he said. “Generally speaking, this phenomenon can be seen as being influenced by the stock market.” He explained that the higher a company’s IPO price is set, the greater the likelihood that its stock price will decline after listing. He also added, “It is difficult to conclude that the delay in introducing the ‘up-and-down’ system or discussions regarding delisting requirements have directly impacted the slump in IPOs.”

Kim Hak-kyun, head of the center at ShinyoungSecurities, suggested that the stock market rebound may have contributed to the improved performance of newly listed stocks in September. “The first half of the year was difficult, the market underwent a correction in June and July, and rebounded in August and September,” said Kwon, the center head. “This trend was reflected in the results.” He added, “It is difficult to conclude that the IPO market is experiencing a sustained recovery based solely on the strong performance of stocks listed in September.”