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보고서
2022 Aug/29
Korea’s Specially Listed Technology Companies: Long-Run Performance and Implications Issue Papers 22-16 PDF
Summary
Recently, a growing number of companies seek to go public through technology special listing in Korea. Emerging as a crucial listing track, it is expected to promote IPOs on the KOSDAQ. On the other hand, some raise concerns about companies listed through the special track which are exempted from financial requirements. Against this backdrop, this article assesses Korea’s technology special listing track by analyzing how those listed companies perform in the stock market and explores challenges for further improving the technology special listing track.

Although companies listed via the special track are subject to different listing requirements and have rarely achieved stable financial performance, the cost of funding through IPOs is pretty much the same between them and other normally listed companies. In terms of long-term stock performance, those companies outperform market indexes or their counterparts under the normal listing track. If the analysis scope is limited to biotech companies, the stock performance of the specially listed ones is hardly different from that of others. They usually begin to perform well in the stock market in the fourth or fifth year after listing, a few of which report outstanding performance that has never been observed in typical IPOs. In addition, there is not much difference in the percentage of stocks falling on the watch list between companies listed via two different tracks. These findings have shown that the special listing track offers opportunities for raising capital through IPOs to technology growth enterprises. It also opens up possibilities of finding companies that deserve to be listed through differentiated requirements. In an analysis of listing requirements’ adequacy, the long-term stock performance of specially listed companies is found not to be adversely affected by relaxed financial qualifications. The result also underscores the need for improving technology assessment capabilities. It is notable that many specially listed companies have failed to enhance financial performance significantly over a long post-IPO period. This implies that their performance in the stock market is highly dependent on technological prowess. Some of the companies may end up with failed technological development, which could aggravate the violation of disclosure requirements or unfair trading practices. In this respect, the financial authorities need to enhance the disclosure system for technological results and monitor closely any violation of disclosure rules or unfair trade practices. If the authorities bolster technical assessment capabilities and take stricter measures for investor protection, technology special listing would be established as the important listing track on the KOSDAQ.