"KOSDAQ listing is often called the ultimate destination for venture and startup founders. But imagine how it feels when years of painstaking effort are threatened by short-selling operators?"
CEO B, who succeeded in listing on KOSDAQ after more than a decade of hardship, came to visit me. Over a glass of makgeolli, he began to pour out his grievances. His company had become a unicorn listed firm with a market capitalization well over 1 trillion won, and he was working tirelessly to leap into a global enterprise — only to encounter deeply troubling issues. Even after listing, while his shares appeared to have risen in value, he couldn't actually sell them and had no cash in hand, leaving him in a position no different from a salaried executive.
Moreover, he lamented that the tyranny of so-called "short-selling operators" had compounded his difficulties. After succeeding in a hard-won KOSDAQ listing and presenting future visions and strategies to domestic and overseas customers and shareholders, his stock price had risen significantly — only to be partially held back by "short-selling operators."
The average time for a startup to achieve its dream of a KOSDAQ listing is conventionally known in the industry to be 12 to 15 years. In 2025, a total of 84 companies (excluding SPACs) were newly listed on the KOSDAQ market. Considering that nearly 1 million companies are founded annually on average, the probability of succeeding in a KOSDAQ listing is less than 1 in 10,000 startups. According to statistics from the Ministry of SMEs and Startups, only 1 out of every 500 technology companies crosses the threshold of going public.
Despite these slim odds, every founder dreams of a KOSDAQ listing at some point. From a national perspective, KOSDAQ listing also serves as a motivational platform that enables the continued development of innovative technologies. This is because the national economy and national power can only continue to grow if advanced technology development continues.
However, if the KOSDAQ market — which serves as a ladder for national technological advancement — becomes bruised by so-called "operators," founders' hopes and motivation will be crushed. According to reports, the Financial Supervisory Service identified more than 19 institutions, including 13 global investment banks (IBs), for illegal short selling between 2023 and 2025, with total fines amounting to approximately 83.6 billion won (about $61 million). Amid this, the repeated detection of illegal trades by global IBs — selling shares they neither owned nor borrowed (so-called "naked short selling") — and the abnormal trading pattern of concentrating fire on KOSDAQ-listed companies whose prices have surged, are raising concerns that distrust toward the KOSDAQ market among individual investors and business leaders has reached its peak.
Why has the KOSDAQ market become an easy target to be swayed by such "operators"? One of the reasons can be found in what I felt 30 years ago while working as a fund manager at one of Korea's three major securities investment institutions. As an investment manager at a domestic institutional investor, there was no need to worry about buying stocks listed on KOSPI. However, when fund managers at large asset management firms or pension funds wanted to buy KOSDAQ stocks, they had to be cautious. The reason is that the market capitalization of KOSDAQ-listed stocks is on average smaller than that of KOSPI, so the moment a KOSDAQ-listed company's new technology is announced and its corporate value surges to attract market attention, it often becomes a target for massive short-selling forces seeking short-term gains, rather than long-term capital investment that supports innovation.
In addition, when negative external news emerges, KOSDAQ companies often become prey for so-called "operators," creating the risk that an investment manager might be misunderstood — like "adjusting one's hat string under a plum tree" (a Korean proverb referring to situations that invite suspicion). Therefore, when companies pursue listings, this is also part of the reason why they prefer to list on KOSPI over KOSDAQ, or dream of listing on NASDAQ first.
In fact, when comparing the corporate value of KOSDAQ-listed companies with that of NASDAQ-listed companies, as of the 23rd, the total market capitalization of KOSDAQ was approximately 500–550 trillion won (about $360–400 billion). Considering that NVIDIA, the top-ranked NASDAQ company by market cap as of April 23, had a stock price of around $200, multiplying by the number of shares issued (approximately 24.4 billion shares) yields a market capitalization estimated at about $4.3–4.9 trillion (approximately 6,000–6,800 trillion won). This means that a single NASDAQ company's market value is 10 to 11 times the combined market capitalization of Korea's 1,700 KOSDAQ-listed technology and venture companies. In fact, the reason Naver Webtoon (Webtoon Entertainment) chose NASDAQ over KOSDAQ is the industry's common recognition that corporate value based on IPO pricing standards is valued several times higher on NASDAQ than on KOSDAQ.
If the trend of not being able to share the fruits of founding companies in Korea and listing them with the public continues, how can we defend Korea's recent national competitiveness ranking of 6th in the world (based on US News 2025 Power Rankings)? The recent war between the United States and Iran teaches us that without technological advancement, neither a nation nor its power can be protected. For example, in early April, a U.S. Air Force F-15E fighter jet was shot down over Iranian airspace. In the operation that dramatically rescued its weapons systems officer (a colonel-level armament controller riding in the back seat) within about 36 hours, a top-secret new technology of the U.S. Central Intelligence Agency (CIA) called "Ghost Murmur" was used. Without this core technology, the United States, already at war, would have faced very critical difficulties. The Ghost Murmur technology detects the electromagnetic signals of human heartbeats from long distances and uses artificial intelligence (AI) to separate human heartbeats from surrounding noise. It was developed by U.S. defense contractor Lockheed Martin, as reported by some media outlets including the New York Post.
Corporate efforts to develop technology and apply it to the market are extremely risky, with a failure rate approaching 70% within five years on average. If companies that have taken on such risks through technology development, market entry, and ultimately succeeded in reaching a KOSDAQ listing are left heartbroken and anguished by so-called "short-selling operators," then extraordinary measures are needed to pass on Korea's current development to our juniors and children as it is.
One cannot deny the positive functions of normal short selling. However, if a tilted playing field — an unfair market structure that favors large corporations and foreign capital while disadvantaging innovative technology companies, crushing the growth of innovative firms with baseless false rumors, malicious information, or financial power — is left unchecked, expecting a second NVIDIA-like company to emerge in Korea's KOSDAQ market will remain a distant dream. At a time when President Lee Jae-myung is emphasizing moving beyond the "Korea Discount" toward a "Korea Premium" era in the capital market, how about operating a "KOSDAQ Operator Suspicion Petition Box" at the Korea Exchange and similar institutions?
He is…
· Ph.D. in Technology Management, Korea University Graduate School of Management of Technology
· Current Professor, Kookmin University Graduate School of Global Entrepreneurship and Venture
· Current Director, Eunpyeong Startup Support Center
· Current President, Korea Association of Startup Advisors
· Former CEO, IMG Holdingcom Co., Ltd.
· Former Fund Manager, Hyundai Investment Trust Securities
