Wemade Hits Daily Limit After Founder Agrees to Sell Control Stake at 68,910 Won

Buying Surges on Revaluation Hopes

Investors Also Bet on Growth for the 'Mir' IP in China

Wemade shares finished at their daily upper limit on July 1 after the game developer announced that founder and board Chairman Park Kwan-ho would sell his entire stake to Neo Pulse, a Chinese-backed investment platform. Investors appeared to focus less on the founder's sale of management control and more on the potential for a reassessment of the company's value.

Wemade rose 5,770 won, or 29.85%, to close at 25,100 won. Affiliates Wemade Max and Wemade Play also jumped 29.94% and 29.97%, respectively, with both hitting their daily limits.

The sale price drew the most attention. Park agreed to sell the shares for 68,910 won apiece, more than three times the previous day's close of 19,330 won. That fueled expectations that the strategic investor values Wemade far above its current share price. Lim Hee-seok, an analyst at Mirae Asset Securities, said 920 billion won for the 40% stake implies a corporate valuation of more than 2 trillion won. The math boosted investor sentiment and fed expectations that the stock could climb toward Neo Pulse's implied valuation, helping send the shares to their daily limit.

Neo Pulse's background also supported sentiment. The platform is wholly owned by Hong Kong-based investment manager Shengsong Investment and has broad networks with major Chinese game companies, including Alibaba. Neo Pulse will become Wemade's largest shareholder after securing a 40.25% stake.

Investors are also watching the possibility of expansion beyond China into overseas markets. In a message to employees on June 30, Park referred to the company's flagship intellectual property, Mir, writing that it continues to generate significant value in China. He added that another major market awaits in North America and Europe.

Ji-hee Yoo, Hankyung.com reporter, keephee@hankyung.com