Baek Jong-won, the CEO of Theborn Korea, declared that he would suspend all broadcasting activities except for the program currently being filmed. This is interpreted as a measure to alleviate investor concerns as Theborn Korea reaches the point where its protection period is lifted, six months after going public.
On the 6th, Baek issued a third apology through a press release and the official YouTube channel. He noted, “Now, as a businessman rather than a broadcaster, I will focus all my passion and efforts on the growth of Theborn Korea,” and stated, “I will make 2025 the first year of a completely renewed Theborn Korea.”
Theborn Korea entered the KOSPI market on Nov. 6 last year. On its first day of trading, Theborn Korea's stock closed at 51,400 won, up 51.18% (17,400 won) from the initial public offering price of 34,000 won. It even jumped to 64,500 won during intraday trading.
However, Theborn Korea’s stock price drew a downward trajectory afterward. The controversies over product quality and sourcing errors significantly affected the company. Baek promised to revitalize the company and apologized, but Theborn Korea's stock price remained at 26,950 won at the close on the 2nd, 20% lower than its offering price.
Amid this situation, concerns about overhang also emerged. According to the Korea Securities Depository, as of today, the mandatory holding period for 4,865,835 shares of Theborn Korea held by major shareholders, including Baek, will be lifted. From the 7th, when trading resumes, transactions of a volume representing 33.02% of total shares will become possible. Baek has decided to hold onto the remaining 6,154,995 shares (an 42.55% equity stake) for two years and six months post-listing.
While the possibility that Baek and related parties will sell the released shares immediately in the market is low, even a partial sale will not significantly impact management control. Baek and related parties hold a 74.4% equity stake in Theborn Korea.
The stock options distributed to executives before Theborn Korea went public have also completed their protection period after six months post-listing. The total quantity of stock options, which were subject to mandatory holding, is 336,030 shares, accounting for 2.2% of total shares upon conversion. The exercise price for the stock options is 9,224 won per share, which can realize a 192% revenue based on the current stock price.
As Baek put forth the bold move of suspending broadcasting, the key issue will be whether this can dispel concerns of overhang, influencing the stock price movement. On the 2nd, Theborn Korea also announced a 5 billion won support plan, which included a three-month waiver of royalties for franchisees.