On the 1st, the Supreme Court made a ruling to overturn the conviction of Lee Jae-myung, the Democratic Party of Korea presidential candidate, for a violation of the Public Official Election Act, causing unrest among investors linked to the candidate's political theme stocks. Many reacted that these stocks would go straight to the lower limit price when the stock market opened on the 2nd.

Lee Jae-myung, the Democratic Party of Korea presidential candidate, thinks while attending the 'Min-seng Series 2' meeting for atypical workers held at a restaurant in Jongno-gu, Seoul, on May 1. /Courtesy of News1

On the previous day (April 30), Hyungji Global and Hyungji I&C surged by 30.00% and 29.94%, respectively, finishing the session at the upper limit in the KOSDAQ market. These two stocks have been classified as Lee Jae-myung theme stocks as they were mentioned as beneficiaries of the free school uniform policy pursued when the candidate served as the mayor of Seongnam.

Additionally, on the previous day, Sangji Construction recorded a significant increase of 7,150 won (29.98%) from the last trading day on the previous 30th, reaching 31,000 won. Sangji Construction was included as a theme stock after it became known that former outside director Im Moo-young had joined Lee Jae-myung's campaign in the past.

However, the Supreme Court's decision to overturn the conviction doused the enthusiasm of investors in Lee Jae-myung theme stocks. The Supreme Court decided to overturn the conviction based on the majority opinion agreed upon by 10 out of 12 members, including Chief Justice Cho Hee-dae and 11 other justices participating in the full court. Lee Jae-myung, who received a guilty verdict in the first trial and was acquitted in the second trial, will face another trial in the Seoul High Court.

Immediately following the Supreme Court's ruling, investors in Lee Jae-myung theme stocks flooded online discussion boards with various reactions. One investor wrote, "It seems many stocks will hit the lower limit tomorrow," while another commented in the Sangji Construction discussion board, "The paid-in capital increase has already failed, and now there's been an overturning of the conviction; it seems hard for additional rebounds to occur."

After the market closed the previous day, Sangji Construction announced, "The subscription rate for the share capital increase targeted at shareholders was recorded at 5.85%." Sangji Construction stated it would issue 4 million new shares to shareholders in February of this year. Subsequently, as the early presidential election phase began, the company's stock price soared as it got entangled with political theme stocks. Consequently, the initial issue price of 5,000 won per share swelled to 22,850 won.

This means that shareholders now must subscribe at a price more than four times higher. As a result, only 234,198 shares were actually subscribed during the paid-in capital increase that took place on the 28th to 29th of last month. This is 5.85% of the total.

Meanwhile, investors in stocks related to Prime Minister Han Duck-soo, who effectively declared his candidacy for the presidential election by announcing his resignation that day, expressed their expectations. One investor wrote in the i-Scream edu discussion board, "Let’s surpass 10,000 won," while another noted in the SIGONG TECH bulletin board, "I congratulate the early spike in stock prices." The stock price of this stock was 5,090 won as of April 30.

i-Scream edu is a subsidiary of SIGONG TECH. It became known that co-CEO Park Ki-seok had previously worked alongside Prime Minister Han as a private member of the National Economic Advisory Council, which led to it being linked to the "Han Duck-soo theme stock."

The Financial Supervisory Service announced that it will expand the special task force for unfair transactions related to political theme stocks in the 21st presidential election and has entered a period of concentrated reporting.