Wemade Hits Daily Limit After Founder Sells Control Stake at Triple Market Price

Buying Rush Builds on Revaluation Hopes

Investors Also Bet on Growth for ‘Mir’ IP in China

Wemade shares closed at the daily upper limit on July 1 after the game developer announced that founder and board Chairman Park Kwan-ho would sell his entire stake to Chinese-backed investment platform Neopulse. Investors focused less on the founder’s sale of management control than on the prospect of a revaluation of the company.

Wemade finished at 25,100 won ($18.10), up 5,770 won, or 29.85%. Affiliates Wemade Max and Wemade Play also jumped 29.94% and 29.97%, respectively, with both stocks hitting their daily limits.

The sale price drew the most attention. Park agreed to sell the shares at 68,910 won each, more than triple the previous day’s close of 19,330 won. That fueled expectations that the strategic investor values Wemade far above its current share price. Lim Hee-seok, an analyst at Mirae Asset Securities, said 920 billion won ($663 million) for a 40% stake implies a corporate valuation of more than 2 trillion won ($1.44 billion). He said that calculation stirred investor appetite and helped drive the stock to its daily limit on expectations the shares could rise toward the price Neopulse assigned them.

Neopulse’s background also supported sentiment. The investment platform is wholly owned by Hong Kong-based asset manager Shengsong Investment and has broad ties with Alibaba and other major Chinese game companies. Neopulse will become Wemade’s largest shareholder after securing a 40.25% stake.

Investors are also watching for expansion beyond China into overseas markets. In a message to employees on June 30, Park referred to the company’s flagship intellectual property, Mir, writing that it continues to create substantial value in China and that another major market awaits in North America and Europe.

Yu Ji-hee, Hankyung.com reporter keephee@hankyung.com