[Alpha Biz= Paul Lee] Kakao Pay shares plunged on July 14 following a sharp rally in recent weeks driven by investor enthusiasm over potential benefits from stablecoin initiatives. The stock closed down 12.44% at KRW 69,700 on the Korea Exchange, marking a 38.86% drop from its June 25 high of KRW 114,000.
Other stablecoin-related stocks also fell sharply, including Me2on (-13.19%), LG CNS (-6.11%), and Aton (-5.99%).
Analysts attributed the drop to rising concerns over the regulatory outlook for stablecoins. Jeong Hyun-jong, an analyst at Korea Investment & Securities, noted that "even if a Korean-won-based stablecoin is issued, its global utility will remain limited given the won's status as a non-reserve currency."
Adding to the pressure, J.P. Morgan downgraded its rating on Kakao Pay from "Neutral" to "Underweight." The investment bank argued that the company’s current valuation implies an operating margin of around 30%, compared to the 2.37% forecast for this year. J.P. Morgan set a target price of KRW 42,000 — roughly 40% below current levels.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
