End of the blocking period of LG Energy Solution

Logo of LG Energy Solution (LG Energy Solution)

As the lock-in period for LG Energy Solution shares ends this week, the market’s eyes are on the movement of institutional investors as a sell-off in shares could impact a market that remains sluggish with a weak transaction volume.

According to the Financial Monitoring Service’s Electronic Disclosure System, the lockup period of LG Energy Solutions shares held by institutional investors – 9,960,365 shares (4.26% of all shares) since the company’s IPO of batteries on January 27 – will end on Wednesday.

The 191.5 million shares (81.84%) held by LG Chem, the largest shareholder, will also be released on the same day, six months after the start of the lock-up period. In total, more than 86% of LG Energy Solution shares will be available for sale.

“Once the locked-in shares of LG Energy Solution are released, concerns about supply and demand may rise regardless of (the company’s) fundamentals,” wrote Yeom Dong-chan, an analyst at Korea Investment and Securities, in a report.

LG Energy Solution closed at 391,000 won ($297.85), up 2.36% from the previous day. At this price, the 4.26% share of institutional investors would amount to 3.9 trillion won.

The release of such large funding could increase market volatility at a time when daily trading volume in the stock market has reached less than 6 trillion won. According to the Korea Stock Exchange, trading volume in the stock market registered 5.99 trillion won on July 13, the lowest since February 17, 2020.

Yook Hyuk-jin, an analyst at SK Securities, wrote in an earlier report that institutional investors in LG Energy Solution who made a six-month holding commitment are likely to reap profits as the stock price rose. by more than 20% from the public offering price of 300,000 won.

The end of the blocking of LG Energy Solution shares is also expected to affect other companies’ initial public offerings on the Kospi in the second half of the year, as sales by institutional investors could provide liquidity amid reduced trading volume on the Kospi.

By Kan Hyeong-woo ([email protected])

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