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[Alpha Biz=(Chicago) Reporter Paul Lee] SM has decided to retire its own shares for the first time since its establishment, but its stock price is still sluggish.
According to the Korea Exchange on the 13th, SM's stock price closed at 73,000 won on the 8th, down 0.27% from the previous trading day. On this day, SM dropped to 72,200 won at one point in the day, breaking the 52-week low.
SM's share price decline this year is 21.75%. The stock price, which stood at 93,000 won earlier this year, is currently barely at 73,000 won.
SM decided to incinerate 241,379 shares (about 14,953,670,000 won) in order to enhance shareholder value on the 7th. It is the first time that SM has incinerated its own shares since its foundation. It also announced dividends worth 28.1 billion won. Incineration of treasury stocks is usually interpreted as a positive factor, but SM's stock price has not moved much.
Poor performance has been a drag. Fixed costs have risen as small concerts have increased, but profitability has decreased. The absence of large-scale performances has also widened the deficit of subsidiaries.
SM's sales in the fourth quarter of last year fell 3% year-on-year to KRW 250 billion. Operating profit dropped 52% to 10.9 billion won, far below market forecasts (30.3 billion won).
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
