In a significant move that sent ripples through the South Korean stock market, SK Telecom announced the complete divestment of its stake in Kakao on April 25, 2025. This decision led to a notable decline in Kakao's stock price, which fell by 3.80% to 37,950 won, with an intraday low of 37,150 won before recovering slightly. In contrast, SK Telecom's shares rose by 0.87% to 58,200 won.
The strategic partnership between SK Telecom and Kakao began in 2019, with an exchange of shares valued at 300 billion won. However, the recent sale involved 10,818,510 shares of Kakao, amounting to 413.3 billion won, executed through a block deal. SK Telecom indicated that the funds from this sale would be directed towards acquiring a stake in SK Broadband and investing in future growth sectors such as artificial intelligence (AI).
Last November, SK Telecom had already made headlines by signing a contract to acquire a 24.8% stake in SK Broadband from Taekwang Group and Mirae Asset Group for 1.15 trillion won. Once this acquisition is finalized, SK Broadband is expected to become a wholly-owned subsidiary of SK Telecom.
The aftermath of the stake sale saw Kakao's stock initially plummet, but by April 28, 2025, it had rebounded slightly, trading at 38,150 won, up 0.53% from the previous day. This recovery was partly fueled by foreign investors, who emerged as the largest net buyers of Kakao shares on April 25, purchasing 7,413,496 shares worth approximately 269 billion won. This influx of foreign capital was interpreted by analysts as an opportunity for bargain hunting following the stock's sharp decline.
On the same day, individual and institutional investors sold 2,650,225 shares and 656,907 shares of Kakao, respectively. However, foreign purchases were more than five times the combined sales from domestic investors. Analysts suggest that foreign investors viewed the dip in Kakao's stock price as a short-term buying opportunity, particularly in light of the company's plans to revamp its KakaoTalk platform with AI features later in the year.
IBK Investment & Securities analyst Lee Seung-hoon noted that the combination of Kakao's declining performance metrics and SK Telecom's stake sale created a scenario ripe for foreign investors to capitalize on the lower valuation. He remarked, "The structural issues affecting Kakao's performance are not directly connected to SK Telecom’s divestment, suggesting that the long-term impact on Kakao’s stock price will be limited."
The stock market fluctuations following SK Telecom's announcement highlight the interconnectedness of corporate strategies and investor sentiment in the tech sector. As companies like Kakao navigate the challenges of a rapidly evolving digital landscape, the implications of such strategic moves will be closely watched by market participants.
As SK Telecom reallocates its resources towards growth initiatives, the broader market will be keen to observe how these changes affect both companies' trajectories in the coming months. The recent events underscore the dynamic nature of the technology sector in South Korea, where strategic partnerships and investments play a crucial role in shaping market outcomes.
In summary, the sale of SK Telecom's Kakao stake not only impacted stock prices but also sparked a wave of foreign investment interest, illustrating the complexities of market reactions to corporate decisions. The future of both SK Telecom and Kakao remains to be seen as they adapt to the evolving demands of their respective markets.
