[Edaily Reporter Lee So-Hyun ] Kakao(035720)will invest 150 billion won to repurchase its own shares on the open market and subsequently cancel all of them. This decision comes amid a prolonged slump in the stock price since the announcement of a corporate spin-off last August, based on the company’s assessment that the gap between its projected future growth potential and market valuation has widened.

Notably, while Kakao stated in its August 14 disclosure that it had no plans to acquire treasury stock, it reviewed measures to protect and enhance shareholder value following the announcement of the spin-off and changed its policy to a treasury stock buyback with the intention of canceling the shares.

Kakao announced on the 5th that it held a board of directors meeting and decided to acquire 5,154,639 common shares for 150 billion won. The shares to be acquired represent approximately 1.16% of the 443,005,100 shares currently outstanding. The acquisition period runs from the 6th of this month through February 5 of next year, and the shares will be purchased on the stock exchange through NH INVESTMENT & SECURITIES.

All purchased shares are scheduled to be canceled in a lump sum upon completion of the acquisition. According to the disclosure, the figure of 5,154,639 shares was calculated based on the closing price of 29,100 won on the 4th, the day before the board resolution; the actual number of shares acquired and canceled, as well as the total amount, may vary depending on future stock price fluctuations. While the total number of issued shares will decrease due to the cancellation, the company’s capital will remain unchanged.

This decision is notable as it represents a new shareholder value enhancement measure introduced following the announcement of the corporate spin-off. In its disclosure, Kakao stated, “We have continuously reviewed measures to protect and enhance shareholder value since the announcement of the corporate spin-off.” The company explained that while its treasury stock report disclosed on August 14 stated there were no acquisition plans, it subsequently reviewed the acquisition of treasury stock with the intention of canceling it and ultimately decided to purchase shares on the open market.

Kakao CEO Jeong Shin-ah personally explained the rationale behind the decision to buy back and cancel treasury stock during the third-quarter earnings conference call held that day. CEO Jeong said, “Amid our governance transition, the gap between the market’s current valuation of Kakao and its future growth potential—as viewed from within the company based on its fundamentals—has widened more than ever before,” adding, “We have decided to repurchase 150 billion won worth of treasury stock and cancel it immediately.”

Since announcing its plan for a corporate spin-off into Kakao AI and Kakao X on August 21, Kakao has been explaining the necessity of the spin-off and the growth strategies of both companies to shareholders and the market. Although the company held a series of meetings with minority shareholders and group-wide investor relations (IR) briefings, concerns persisted in the market regarding whether the spin-off would actually lead to an increase in corporate value.

Kakao’s stock price has remained weak since the announcement of the spin-off. Kakao’s stock price plummeted 7.49% from 38,700 won on August 20—just before the spin-off plan was announced—to 35,800 won on August 21, the day of the announcement. During intraday trading that day, it even fell as low as 33,600 won, a drop of 13.18%.

Since then, the stock price has continued its downward trend without a significant rebound. On the 4th, it fell to 28,400 won during intraday trading—hitting a 52-week low—and closed at 29,100 won. This is approximately 24.8% lower than the closing price on August 20, just before the spin-off announcement.