Samchundang Pharmaceutical, the top stock on the KOSDAQ, plunged for two consecutive days, throwing investors into panic. The stock had soared on the wave of enthusiasm for oral obesity drugs, ascending to blue-chip status, only to crumble like a sandcastle over a single post by an obscure blogger.
According to Korea Exchange (KRX), Samchundang Pharmaceutical closed at 737,000 won on Wednesday, falling another 11% after hitting the daily lower limit the previous day. The stock plunged alone even as the broader domestic market surged on ceasefire expectations. More than 9 trillion won in market capitalization evaporated in just two days.
Samchundang Pharmaceutical's stock had skyrocketed over several months, fueled by expectations for its oral insulin platform "S-PASS." Its market capitalization ballooned from around 5 trillion won at the start of this year to as much as 28 trillion won recently. The share price surged from the 200,000 won range to above 1 million won, propelling it to the No. 1 position on KOSDAQ.
However, the mood turned sharply after doubts spread over a 15 trillion won (over 10 years) sales contract in the United States that the company disclosed on Dec. 26. The company moved to contain the fallout, threatening legal action against the blogger who raised concerns as well as securities firms and analysts. The market's response was cold. KRX announced the previous day that it would designate Samchundang Pharmaceutical as a company in violation of fair disclosure obligations, citing its failure to comply with requirements on business performance forecasts.
This incident cannot be taken lightly, as it starkly exposed how fragile the KOSDAQ ecosystem is. It is particularly shocking that the No. 1 company on KOSDAQ collapsed helplessly over a post by a nameless blogger. Like many biotech stocks, Samchundang Pharmaceutical had virtually no proper analyst coverage, no dedicated analysts and no target prices. Investment money has been pouring into KOSDAQ, yet the systems to verify the technological substance of companies or the transparency of their disclosures have not been functioning.
The government is pushing a plan to divide KOSDAQ into premium, standard and management tiers. This must lead to creating an investment framework that ensures reliable blue-chip stocks based not merely on market capitalization or profitability but also on governance quality and disclosure credibility. Building a trustworthy investment ecosystem matters far more than simply funneling money while chanting slogans of "Value-up" and KOSDAQ revitalization. Authorities must keep in mind that market capitalization built on weak fundamentals will ultimately return only as tears of retail investors.