Kakao shares plunged more than 13% as the South Korean tech giant carried out a sweeping governance overhaul separating its artificial intelligence business from its investment operations. The market placed greater weight on post-split uncertainty than on the company’s stated rationale of strengthening AI competitiveness.<\/p>\n
Kakao held a board meeting on the 21st and resolved to execute a spin-off, dividing into ‘Kakao AI,’ a newly established entity overseeing the KakaoTalk-based platform and AI business, and ‘Kakao X,’ the surviving entity responsible for affiliate investment and management. The split ratio based on net asset book value is 0.36 for Kakao AI and 0.64 for Kakao X. As this is a spin-off structure, existing shareholders will receive shares in both companies in proportion to their current holdings.<\/p>\n
On the day, Kakao (035720.KS) fell 13.18% from the previous session to close at 33,850 won (approximately $24) on the KOSPI market. The Korea Exchange halted trading in Kakao shares for 30 minutes, from 10:04 a.m. to 10:34 a.m., immediately after the company disclosed its split decision. Kakao Pay dropped around 7%, Kakao Games fell about 3%, and KakaoBank also declined more than 1%.<\/p>\n
Kakao AI will be led by current Kakao CEO Chung Shin-a. The entity aims to become an ‘AI core company’ that organically connects AI, advertising, and commerce centered on KakaoTalk. Operating subsidiaries including D.K.Techin and K&Works will also be placed under Kakao AI. Kakao envisions evolving KakaoTalk into an ‘agentic AI interface’ that understands the intent and context of each of its approximately 50 million users.<\/p>\n
Kakao AI has set targets of securing more than 20 million daily active AI users by 2030, increasing platform dwell time by over 50%, and achieving revenue exceeding 6 trillion won (approximately $4.3 billion) through 20% compound annual growth. AI-related revenue is expected to expand to a double-digit share of total revenue by 2028 and surpass 1 trillion won (approximately $721.9 million) by 2030.<\/p>\n
Kakao X will be headed by Kim Do-young, CEO of Kakao Investment and head of the Group Investment Strategy Office under the CA Council. It will operate as a ‘future value investment company’ managing and nurturing tech-fin affiliates such as KakaoBank, Kakao Pay, and Kakao Pay Securities; content affiliates including Kakao Entertainment, SM Entertainment, and Kakao Piccoma; and Kakao Mobility. The company also plans to focus on discovering new businesses in virtual assets, physical AI, and global fandom.<\/p>\n
Kakao X aims to leverage approximately 2.3 trillion won (approximately $1.7 billion) raised through asset monetization and roughly 4.1 trillion won (approximately $3.0 billion) in investment resources held by subsidiaries to achieve a 13.3% compound annual growth rate in core business revenue and total revenue exceeding 10 trillion won (approximately $7.2 billion) by 2030.<\/p>\n
Both companies separately outlined shareholder return policies. Kakao AI will allocate 20\u201335% of standalone adjusted free cash flow (FCF), while Kakao X will use 30% of subsidiary dividends and 30% of investment gains for shareholder returns. The company also announced a 300 billion won (approximately $216.6 million) share buyback and cancellation plan funded by proceeds from the Dunamu stake sale.<\/p>\n
Kakao cited the elimination of the ‘conglomerate discount’ as the rationale for the split. Based on the consensus average of sum-of-the-parts (SOTP) valuations from domestic and international securities research centers, Kakao Group’s potential value stands at 34.2 trillion won (approximately $24.7 billion), yet its average market capitalization over the past three months was only 16.8 trillion won (approximately $12.1 billion)\u2014a discount of more than 50% relative to the sum of individual business values, the company explained.<\/p>\n
The split timeline calls for an extraordinary shareholders’ meeting on December 17, completion of the split on January 1, 2027, and the pursuit of Kakao AI’s relisting and Kakao X’s change-of-listing on January 27 of the same year. The record date for new share allocation is December 31.<\/p>\n
Kakao founder Kim Beom-su said, “In the mobile era, Kakao has been the first to leap into uncharted paths, creating innovation and transforming users’ daily lives.” He added, “As the AI era demands agility of a different order, we will redesign our growth structure with two engines\u2014Kakao AI and Kakao X\u2014so that the results flow back to shareholders, users, and crew members alike.”<\/p>\n
Market reaction, however, has been cold. Kakao has long faced criticism that its practice of separately listing core businesses such as KakaoBank and Kakao Pay\u2014dubbed ‘split listings’\u2014has prevented the value of growth businesses from being properly reflected in the parent company’s share price. This spin-off, which similarly carves out the core AI business into a separate entity, has heightened investor concerns.<\/p>\n
Kakao has approximately 1.6 million minority shareholders, accounting for roughly 60% of total shareholders. Chinese Tencent affiliate MAXIMO has risen to become the second-largest shareholder with a 5.7% stake, while U.S.-based BlackRock has also re-emerged as a major shareholder after again surpassing the 5% threshold. Analysts note that this governance overhaul combines the stated rationale of strengthening AI competitiveness with pressure from global institutional shareholders to enhance corporate value.<\/p>\n","protected":false},"excerpt":{"rendered":"Kakao shares plunged more than 13% as the South Korean tech giant carried out a sweeping governance overhaul…\n","protected":false},"author":2,"featured_media":128404,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[622],"tags":[42519,5083,827,19889,851,1043,65328,5255,831,35364,65407,337],"class_list":["post-128403","post","type-post","status-publish","format-standard","has-post-thumbnail","category-kakao","tag-chung-shin-a","tag-dunamu","tag-kakao","tag-kakao-ai","tag-kakao-mobility","tag-kakao-pay","tag-kakao-x","tag-kakaobank","tag-kakaotalk","tag-kim-beom-su","tag-kim-do-young","tag-korea-exchange"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/128403","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=128403"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/128403\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/128404"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=128403"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=128403"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=128403"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}