Korea Capital Market Institute

There are four routes for an unlisted company to get listed on the KOSDAQ: regular listing, listing transfer from the KONEX, listing through a reverse takeover (RTO), and listing through a merger with a special purpose acquisition company (SPAC). The comparative analysis of firms, which have been listed on the KOSDAQ since 2007 through each of the four routes, finds that listing transfer from the KONEX and listing through a SPAC merger are more effective routes than others. The two routes exhibit differences from the regular listing route in the level of information asymmetry, incentive structure of stakeholders, capital raising features, and listing requirements and procedures. Such differences allow us to conclude that these routes provide more choices for SMEs to get listed, and contribute to identifying healthy new firms listed on the stock market. In particular, the analysis reveals that listing transfer from the KONEX market reduces the capital raising cost for newly listed firms because of its strikingly low level of IPO underpricing. But listing through a RTO would very likely lead to poor post-listing stock performance.