“CLOVA X (based on Naver’s hyperscale generative artificial intelligence model) couldn’t answer a simple local weather question. Do you have a strategy to catch up with Microsoft?”
Naver’s individual shareholders continued their questions at the annual general shareholders’ meeting in Seongnam, Gyeonggi Province, on March 26, expressing disappointment over the fluctuating stock price and the underwhelming performance of the company’s generative AI technology. Naver CEO Choi Soo-yeon, regarding the stock price, said, “I fully recognize and feel responsible for it,” and added, “Although it may be insufficient, please continue to watch over us and expect improvements.”
“As CEO, it’s deeply painful to hear that shareholders feel innovation has decreased, but I see this as an opportunity to demonstrate that our intensive reflection on our current performance and services has been meaningful,” Choi continued. “Despite facing market concerns similar to today’s, Naver has successfully navigated past crises, such as the emergence of search services like Yahoo and the advent of the mobile era with platforms like KakaoTalk, by delving into the technology and essence of search,” she said, emphasizing that the company will resolve the current situation as well.
Naver posted its biggest earnings ever last year, but its stock price has been lagging. Since the beginning of this year, the KOSPI index has increased by 3.09% as of March 25, while Naver’s stock price has fallen 16.07% to 180,000 won. On the day of Naver’s shareholders’ meeting a year ago, the KOSPI index was at 2416.96, more than 200 points lower than it is now, but Naver’s stock price was at 207,000 won. The sluggish stock price led shareholders to ask even before the start of the general meeting about the opportunity for a Q&A session regarding the overall situation of the company.
Nam Hyo-ji, a researcher at SK Securities, lowered the target price from 290,000 won to 260,000 won the day before, saying, “Naver’s earnings growth prospects have dimmed, and it is time for a new business strategy to address the company’s revenue growth.” Nam noted, “The sector under direct influence by Chinese platforms is overseas direct purchase shopping malls, which account for only about 5% of the total Smart Store transactions, but their rapid growth is too significant to ignore,” adding, “Specifically, AliExpress is drawing in brands by offering to host them without charging any fees, which partly overlaps with the Brand Stores that Naver has been focusing on.”
This article was originally published on March 26, 2024.
