Deep Commerce Proposes 5:1 Reverse Split and KRW 45.17 Billion Third-Party Capital Raise, Risking Extreme Dilution for Existing Shareholders
The EGM agenda includes a 5:1 reverse stock split and a third-party capital raise of KRW 45.17 billion, approximately 294% of the current market cap, leading to over 90% dilution for existing shareholders.
The issue price of KRW 6,125 is slightly below the theoretical post-split price of KRW 6,250, and subscribers are mostly the CEO and related parties with a one-year lock-up.
Proceeds are allocated for operational purposes including R&D and marketing, but declining revenue raises concerns about efficient use of funds.
Additionally, a proposal to authorize the board to issue up to 100% of outstanding shares further increases potential dilution.
[AI Summary]Deep Commerce is set to finalize an extreme dilutive capital increase that severely undermines existing shareholder value. Short-term stock price decline is highly probable, with insufficient investor protections. The effectiveness of the new funds remains highly uncertain.