The Financial Supervisory Service and the Korea Exchange are investigating the extraordinary plunges this week in the share price of local line Hyundai Merchant Marine (HMM).
When the restructuring line announced plans of a KRW200bn ($179.4m) convertible bond issuance on Tuesday evening it was greeted with disdain by investors the next day worried about their shares being diluted, HMM’s share price nose diving 27.9% on Wednesday and another 7.1% yesterday. In just two days KRW114.7bn was wiped off HMM’s market value.
It now emerges a total of 155,655 HMM shares were shorted on Tuesday, leading to speculation that some institutional investors and hedge funds were tipped off early about that evening’s convertible bond announcement. The investigation continues.