Shares of Bionote have been plummeting non-stop since the company went public on the Kospi market on December 23 last year.
As of 2:00 p.m. Friday, the company's shares stood at 6,470 won ($4.99), down 44.7 percent from an all-time high of 11,700 won, recorded on the day of its listing. The company's market capitalization, which had surpassed 1 trillion won on the day of its listing, has also dropped to 656.1 billion won.
Adding to investors' concerns, 60 percent of the outstanding shares will be removed from lockup. These shares are held by those who invested before the listing.
According to the Financial Supervisory Service, from March 22, the lock-up period for 2,023,848 common shares held by SEMA-Invest Bio Healthcare Specialized Investment Fund, Intervest 4th Industrial Revolution Investment Fund II, Brick-Obit 6th New Technology Business Investment Fund, and former Bionote CEO Ha Gun-woo, has ended.
This represents 19.8 percent of the total number of listed shares (11,887,6048) and more than 60 percent of the total number of outstanding shares, excluding shares owned by Bionote Chairman Cho Young-shik, the largest shareholder, and related persons, treasury shares, and employees’ stocks.
Aside from former CEO Ha, the other investment funds participated as financial investors. Industry watchers speculate that the three funds may look for block deals to realize profits.
Considering that the three funds acquired Bionote's stock at 1,400 won per share, they may receive up to three times their investment if the funds decide to sell off a portion of its stocks through a block deal.
Industry watchers also stressed that even if the funds do not sell their stocks, it will serve as an overhanging risk and negatively affect Bionote's share prices for some time.
Meanwhile, Bionote is one of the typical biotech firms that benefited from the Covid-19 pandemic.
The company's corporate value soared during the Covid-19 pandemic thanks to sales from Covid-19 diagnostic kits sold by SD Biosensor, its affiliate.
However, as various countries have completed their transition into an endemic policy, the company's corporate value plunged.
Notably, investors had expressed concerns that 80 percent of Bionote's sales are still related to its Covid-19 sales with its affiliate SD Biosensor.
The excessive dependence on SD Biosensor for sales raised doubts among investors about whether Bionote's exponential growth was due to trading among affiliates.