Korea / Special Situations, Clepsydra Capital

Sanghyun Park

I investigate special situations in Korea.

Korea / Special Situations

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Event-Driven

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<li>
<a href="https://www.smartkarma.com/entities/8994" target="_blank" data-smartkarma-citation="entities:8994:1">Woongjin Thinkbig (095720 KS)</a> announced a ₩169bil rights offer and the price is now taking a nosedive as the price is down nearly 20% early this morning. The banker Samsung Securities will take up all the forfeited shares if there is any. So, this rights offer itself can't be failed. Then, what the market is really concerned is financial risk involved in this Coway buying back effort.</li>
<li><p>This risk is directly hammering Thinkbig which is officially chosen by the Woongjin Group as a main vehicle to buy back and control Coway. In contrast, Woongjin Holdings is rising this morning as the investors are relieved to see Holdings not chosen as the main vehicle to buy Coway. Interestingly, this implies that the market doesn't hate the idea of Woongjin buying back Coway from MBK. Just, the market is extremely concerned about potential financial risks involved in this deal.</p></li>
<li><p>We immediately had a huge selldown on Thinkbig this morning as Thinkbig price went down nearly 20%. Further shorting wouldn't be recommended at this point. Any turnaround possibility? If Stic's financing structure detail is disclosed and it turns out to be quite satisfying for Thinkbig (it is speculated that Stic will likely have a RCPS-based financing structure for Woongjin), this may turn the tide. But until then, we'd better wait and see how the price will be settled at around Oct 2.</p></li>
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Woongjin Thinkbig (095720 KS) announced a ₩169bil rights offer and the price is now taking a nosedive as the price is down nearly 20% early this morning. The banker Samsung Securities will take up all the forfeited shares if there is any. So, this rights offer itself can't be failed. Then, what the market is really concerned is financial risk involved in this Coway buying back effort.
This risk is directly hammering Thinkbig which is officially chosen by the Woongjin Group as a main vehicle to buy back and control Coway. In contrast, Woongjin Holdings is rising this morning as the investors are relieved to see Holdings not chosen as the main vehicle to buy Coway. Interestingly, this implies that the market doesn't hate the idea of Woongjin buying back Coway from MBK. Just, the market is extremely concerned about potential financial risks involved in this deal.
We immediately had a huge selldown on Thinkbig this morning as Thinkbig price went down nearly 20%. Further shorting wouldn't be recommended at this point. Any turnaround possibility? If Stic's financing structure detail is disclosed and it turns out to be quite satisfying for Thinkbig (it is speculated that Stic will likely have a RCPS-based financing structure for Woongjin), this may turn the tide. But until then, we'd better wait and see how the price will be settled at around Oct 2.


Woongjin Thinkbig (095720): ₩169bil Rights Offer to Buy Coway, Price Is Down 20% This Morning