KOREAN REPUBLIC: KRX Imposes Short Selling Ban on Com2uS Shares

Monday April 17 2017

The Korean Exchange (KRX) has designated as “overheated shares” and imposed a short selling ban on Com2uS shares after short sale transaction values in the company on KOSDAQ amounted to 22.12% (in excess of the 15% threshold) of the overall trading volume last Friday 14 April.

KRX introduced the 15% rule and other short selling rules, in March 2017, following significant losses experienced by retail investors of Hanmi Pharmaceutical Co. after short-selling was undertaken by institutional and foreign parties prior to a public disclosure being made, and upon a suspected insider tip (see article of 07 Oct 2016).

Under the rules recently introduced, KRX is required to consider such factors as price changes of stocks, in addition to the 15% ratio of short sale transactions  before designating overheated shares, and blocking further short selling of the shares in the next trading session. For a list of the rules introduced please view our article of 10 Feb. 2017.

Short selling in Com2uS is associated with a perceived failure to build upon the success of its game title “Summoners War”, which accounts for 80% of the company’s sales.

For more information on the KRX announcement, please click the link at the top of the page.