Kakao Corp. Shares slumped early Monday after a hearth at considered one of its statistics centers over the weekend disrupted its famous messaging app and different fintech services.
Shares in the South Korean mobile internet giant fell as a great deal as 9.Five% to forty six,500 won ($32.25) in morning change and have been closing 5.5% lower at KRW48,600 round noon. The benchmark Kospi index turned into 0.1% higher.
Kakao’s retreat reflects traders’ issues about damage to the employer’s popularity in addition to income setbacks that the corporation should suffer from the fireplace, consistent with analysts.
The Saturday blaze at a statistics middle south of Seoul crippled numerous Kakao offerings, along with the cell messaging app KakaoTalk that is utilized by nicely over eighty% of South Koreans, over most of the weekend till overdue Sunday.
“In fact, the entire nation has skilled the soreness, and Kakao’s popularity as a top rate logo for presenting various platform services has been tarnished,” Seoul-based totally Eugene Investment & Securities analyst Jung Eui-hoon stated in a observe Monday.
Kakao will also want to prepare for additional expenses to cowl damages caused by its disrupted offerings, Jung stated, noting that its taxi trip-hailing, paid-content material and online-sport offerings were affected. Its fintech affiliates KakaoBank Corp. And Kakaopay Corp. Were also buying and selling extra than 4% lower Monday.
Kakao said in a regulatory filing Monday that it and SK C&C, which comprises the records middle, have been in talks to speak about damages, and assume the fireplace to have a “restricted” impact on sales.
Samsung Securities analyst D.H. Oh predicted Monday that the weekend hearth and commercial enterprise disruption may want to cut Kakao’s sales by way of 1% to two% for the fourth sector.
Eugene Investment & Securities Monday diminished its target for Kakao’s stocks through 39% to KRW65,000, bringing up the platform organisation’s lack of growth momentum on weaker corporate spending on online marketing and a lack of new growth engines.