Kakao Group’s market capitalization surged by over 1 trillion won ($706 million) in a single day, pushing the tech group to the eighth spot among South Korea’s top conglomerates. With President Yoon Suk-yeol facing an impeachment vote after an unexpected martial law declaration, investors have taken an interest in Kakao Group, which has been under scrutiny under the Yoon administration. Some speculate that a potential political shift might ease the tech company’s regulatory challenges.
The combined market cap of Kakao Group’s 10 listed subsidiaries reached 41.478 trillion won ($30 billion) by market close on Dec. 4, up 1.358 trillion won (3.38%) from the previous day, according to the Korea Exchange. Kakao Group was the only conglomerate to see its market cap grow by over 1% that day.
Kakao Corporation’s shares climbed 8.5% (3,650 won) during the day, pushing its market valuation back above the 20 trillion won threshold for the first time since May.
The group has been plagued with a serious of regulatory and legal challenges since Yoon took office. Kakao founder Kim Beom-soo was detained on charges of stock price manipulation and was recently released on bail.
Another key subsidiary, Kakao Mobility, was fined 99.5 billion won by the Korea Fair Trade Commission for alleged anti-competitive practices, such as “call herding” and “call blocking.”
The company is also under investigation by prosecutors. Last month, the Securities and Futures Commission under the Financial Services Commission fined Kakao Mobility 3.4 billion won for misreporting revenues, calculating them on a gross rather than net basis.
President Yoon previously criticized Kakao’s business practices, branding the company’s market dominance as “immoral” during an emergency meeting last November.
Against this backdrop, the impeachment motion against President Yoon in the National Assembly has sparked renewed interest in Kakao Group. “Investors regard the group as a potential beneficiary of the political turbulence,” said an industry insider.
