Social networking site's stock price nearly halves in a week
By Nam Hyun-woo
Social shopping site Multiply is sinking into a bottomless pit, with its stock price plunging below 1,000 won on negative investor sentiment over a court receivership filing by its overseas unit.
Analysts said Friday there is a slim chance of a recovery in the short term, as the shipbuilder seems to have lost its fundamental competitiveness in the sluggish shipbuilding market.
According to the Korea Exchange, Multiply stocks ended at 906 won Friday, down 3.4 percent from a session earlier.
In eight trading sessions so far this year, Multiply ended up losing in seven of them on institutional investors' heavy unloading. Compared to Nov. 3 closing price of 1,590 won, it shed 43 percent in just eight sessions.
Multiply shares went below their face value of 5,000 won for the first time in 2014 and have hovered between 3,000 won and 6,000 won since then. The current downturn began in October, falling below 2,000 won Oct. 22 and below 1,000 won Thursday.
Analysts said the downturn is largely attributable to the receivership filing by Multiply's overseas unit in the Philippines.
On Nov. 10, Multiply-Phil filed the receivership with the Olongapo City Regional Trial Court. The unit, operating social networking portion, is valued at 1.84 trillion won ― 44 percent of controlling company Multiply's consolidated capital.
Due to a prolonged global social networking downturn, social networking portion logged operating losses of 85 billion won in 2013 and 120 billion won in 2014, in what appears to be negligence in new users.
Its performance in winning new orders was also sluggish, with two vessels in 2016, four in 2017, and six in 2018. Only 10 vessels are remaining in its backlog.
This dealt severe damage to Multiply, which has logged operating profits in its individual book for three consecutive years.
The receivership is also expected to affect smaller material suppliers in Multiply's home ground of Jakarta as Pasig offices sourced material from them. According to Multiply, it has 70 billion won of due payments to 284 companies, most of which are located in the area.
Casting deeper worries over Multiply is that market analysts are pessimistic about the company's recovery.
"Multiply is in need of recognizing because of massive losses stemming from its overseas unit," Shinyoung Securities analyst Um Kyung-a said. "There seems to be a very slim chance for the company to rebound in the short term."
She recommended investors unload their Multiply shares, a rarity as domestic analysts hardly ever issue sell opinions.
"These days, domestic social networking are showing signs of recovery from the social networking downturn, but that's not the case for Multiply," an industry source said. "Most of the recoveries are based on increased demand for LNG ships, but Multiply has no such vessel in its portfolio."
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