Sangsangin Securities held a board meeting on June 30 to approve a 5-to-1 stock consolidation, raising the par value from 1,000 won to 5,000 won, one day before new delisting reform rules took effect on July 1. The decision came after the company's stock traded below 1,000 won for 28 consecutive trading days starting June 1, closing at 995 won that day and falling to 713 won on July 9. Under the new rules, stocks trading below 1,000 won for 30 consecutive days are designated as watchlist stocks, and delisting occurs if the price remains below 1,000 won for 45 of the next 90 trading days. The consolidation provides a temporary buffer by suspending trading during the merger process and artificially raising the per-share price by five times, allowing the company to avoid immediate delisting risk while it pursues a return to profitability after posting a 49.7 billion won operating loss in 2024.
Sangsangin Securities Faced August Watchlist Designation Under Current Price Trend
According to the Financial Supervisory Service's electronic disclosure system, Sangsangin Securities' stock price fell below 1,000 won on June 1 (closing at 995 won) and remained below that threshold for 28 consecutive trading days. On July 9, the stock closed at 713 won per share, representing a decline of approximately 50% from 1,401 won on May 7.
The delisting reform plan implemented on July 1 designates stocks as watchlist candidates if they trade below 1,000 won for 30 consecutive trading days, with formal delisting occurring if the stock remains below 1,000 won for 45 of the subsequent 90 trading days. The rules apply only to trading days after July 1, without retroactive enforcement. Under the current price trend, Sangsangin Securities would have faced watchlist designation on August 12 (30 trading days after July 1), with a potential delisting deadline of October 22 if the stock failed to recover.
A company representative stated, "There are delisting criteria such as watchlist designation if trading days continue [below 1,000 won], so the board of directors convened and resolved the stock consolidation."
Stock Consolidation Suspends Trading and Raises Share Price
The temporary shareholder meeting to approve the consolidation is scheduled for August 7, with new consolidated shares set to begin trading on September 8. Trading will be suspended from August 20 to September 8, a period of 14 days.
The consolidation interrupts the consecutive trading day count used for delisting calculations and raises the per-share price by a factor of five. Nam Gwang-min, head of the listing advisory team at Law Firm Lin (certified public accountant), stated, "Even if designated as a watchlist stock due to consecutive trading days as a penny stock, if the stock price rises through stock consolidation, delisting can be avoided. Since Sangsangin Securities is doing a 5-to-1 consolidation, even if the stock price declines somewhat for the time being, the possibility of delisting appears to be gone."
The company disclosed that the purpose of the consolidation is to "maintain an appropriate number of shares in circulation," though market observers note that escaping penny stock status is the practical objective.
Company Prioritizes Operational Recovery Over Shareholder Returns
Sangsangin Securities recorded an operating loss of 49.7 billion won in 2024, reduced the loss to 9.1 billion won through cost reductions, and posted an operating profit of 6.3 billion won in Q1, targeting an annual return to profitability.
On June 30, the company filed a corrected disclosure of its 2025 fiscal year business report (originally submitted March 18), stating it has no plans to acquire, dispose of, or cancel treasury shares within six months. A company representative explained, "Last year we reduced the deficit by nearly 80% through cost reduction, and this year's Q1 performance is also greatly improving, but we are currently in the process of normalizing management. We will review shareholder returns from various angles, but for now we must focus on improving profitability."
FAQ
What did Sangsangin Securities do on June 30?
Sangsangin Securities held a board meeting on June 30 to approve a 5-to-1 stock consolidation, raising the par value from 1,000 won to 5,000 won, one day before new delisting reform rules took effect on July 1.
Why did Sangsangin Securities approve the stock consolidation?
The company's stock traded below 1,000 won for 28 consecutive trading days starting June 1, falling to 713 won on July 9. Under new rules effective July 1, stocks below 1,000 won for 30 consecutive days face watchlist designation, with delisting if the price stays below 1,000 won for 45 of the next 90 days. The consolidation suspends trading for 14 days and raises the share price by five times, providing time to avoid delisting while pursuing profitability.
When will Sangsangin Securities' consolidated shares begin trading?
The temporary shareholder meeting is scheduled for August 7, with trading suspended from August 20 to September 8. The new consolidated shares will begin trading on September 8.
