KRX competence in doubt again as Toss goes for US listing

By Yi Whan-woo

The competence of the Korea Exchange (KRX), the country's sole bourse operator, is in doubt again as the operator of fast-growing financial app Toss is opting for the United States over Korea in its plan to go public.

The doubt comes after multiple prosperous companies, including Coupang and Webtoon Entertainment, were listed on the U.S. stock market because they found that they could have a higher valuation there compared to the Korean market.

According to industry sources, Thursday, Viva Republica, the operator of Toss, has been considering the U.S. as its listing destination, withdrawing its plan to pursue an initial public offering (IPO) on the benchmark KOSPI.

The timeline and other details concerning its U.S. IPO plan have not been set.

The sources said Viva Republica shifted away from its plan of a Korean market debut in a bid to reach a target stock market valuation between 10 trillion won ($7.2 billion) and 20 trillion won.

The company is currently valued at just over 8 trillion won based on over-the-counter share prices.

“It appears Viva Republica was doubtful about reaching its goal if (it would be listed) on the KOSPI,” a source said.

Jung Eui-jung, head of the Korean Stockholders’ Alliance, which advocates for retail shareholders’ rights, said Viva Republica’s decision indicates that the government’s efforts to tackle the problem of listed companies' undervaluation are not paying off sufficiently.

The government came up with the Corporate Value-up Program earlier this year, in order to tackle the undervaluation of securities in Seoul compared with global peers, known as the "Korea discount."

“I think it will require time for promising companies interested in an IPO to gain confidence in joining the KOSPI or secondary bourse Kosdaq,” Jung said.

He noted that Coupang, an e-commerce giant from Seoul, was listed on the New York Stock Exchange, while Webtoon Entertainment, a U.S. online comics platform backed by internet giant Naver, made its Nasdaq debut in July.

Additionally, travel booking platform Yanolja and fashion platform Musinsa are considering potential U.S. listings.

Experts urge the KRX to step up its efforts to draw more companies to join the Seoul market, considering its profit from IPO commissions is declining.

IPO commissions totaled 18.9 billion won in 2023, down 0.4 percent from a year earlier.

“A failure to bring in new companies means the Korean market is not adapting to fast-changing business trends, especially with regard to digital technology,” Hanyang University economics professor Ha Joon-kyung said.

Hwang Sei-woon, a senior research fellow at the Korea Capital Market Institute, assessed that the rush of domestic businesses for a U.S. market debut will accelerate, urging the government to “carefully develop the Corporate Value-up Program for the sake of KRX as well as the national interest.”