"Down 35% and now a strike?" Kakao investors watch their nerves fray

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[Financial News] Kakao's stock is also being shaken as the company faces the prospect of its first-ever joint strike. With strike approval votes passing at five affiliates, including the headquarters, the stock is now under pressure even at the 40,000 won level.
As of 9:40 a.m. on the 27th, Kakao was trading at 40,800 won on the Korea Exchange (KRX), down 1.57% from the previous close. On the 26th, the day the strike was announced, it fell to 41,850 won, about 35% below the roughly 64,000 won level it had hovered around at the start of the year.
Kakao hit a yearly high of 64,500 won intraday on Feb. 27, supported by expectations for strong earnings and its strategy to expand AI services. But when U.S. airstrikes on Iran began, the stock plunged by 15,250 won over two days, on March 3 and 4. It then remained sluggish and extended its decline.
Given that the KOSPI surged as much as 85% during the same period, Kakao's decline feels even steeper by comparison. The KOSPI also posted a sharp drop on the same day, quickly giving up the 6,000 level and sliding to 5,093 points. But it absorbed the short-term plunge and resumed its rally, eventually breaking above 8,000.
It is especially painful for Kakao that even record earnings and other positive factors failed to lift the stock. Instead, collective protests by the union over the compensation system, including bonuses, intensified. On the 20th, when the strike vote passed, the stock briefly fell below 40,000 won intraday and closed at its lowest level of the year, 40,150 won.
Kakao's fate, now facing its first strike threat since its founding, is expected to be decided in the second round of mediation at the Gyeonggi Regional Labor Relations Commission on the 27th. The Kakao Branch of the National Chemical, Textile and Food Industry Workers' Union will hold the second mediation session with management at 3 p.m. that day.
The labor and management sides failed to narrow their differences in the first mediation session on the 18th, but they agreed to extend the mediation date. If the second round also collapses, the union will gain the right to strike and could walk out immediately based on the vote result. Four affiliates have already secured strike rights.
If all five entities, including Kakao, declare a strike depending on the outcome of the mediation on the 27th, it would mark the company's first-ever joint strike. Kakao Mobility Corp.'s union staged a partial strike in June last year after wage and collective bargaining talks broke down, but Kakao headquarters has never carried out a strike.
bng@fnnews.com Kim Hee-sun Reporter