Wemade, you say you are falling further from here?… Explosive short selling on Wemix Trading [주간 공매도]

Since the cryptocurrency (virtual asset) Wemix was removed, WeMade’s short selling balance and trading share were found to increase significantly. As the Wemix crisis has held back the global blockchain business, downward pressure on stock prices is mounting.

Earlier, on Oct. 27, four major exchanges, including Upbit, Bithumb, Coinone, and Korbit, which belong to the Digital Asset Exchange Joint Advisory Body (DAXA and DAXA), designated Wemix as an investment collateral. This is because there is a big difference between Wemix’s distribution plan presented to Daksa-affiliated exchanges and the actual distribution volume. It has been revealed that the actual distribution volume (320 million) is higher than the distribution volume announced by WeMade on the exchange (about 250 million).

A week before Wemix was designated as an investment alert, the proportion of WeMade’s short selling exceeded double digits. Short selling is an investment technique that borrows shares when the share price of a particular stock is expected to fall, sells them, and then buys them back at a lower price when the share price actually falls to make a profit. As the Wemix delisting controversy escalated, so did more investors who bet on WeMade’s stock price to drop.

According to the Korea Exchange on the 6th, WeMade’s short selling balance was KRW 47.8 billion (3.76%), ranking it 14th in the KOSDAQ. The size of the short sale, which was just 6,067 shares at the time Wemix was designated as an investment security item, rose to 270,000 shares on the 8th. On the 8th, when Wemix was delisted, Wemade closed at 30,050 won, down 20.29% (7,650 won).

WeMade filed an injunction against the exchanges to suspend the effect of Wemix’s delisting, but the court rejected the request. In its decision, the court said: “Although losses to investors may occur in the short term, in the long run, it is highly probable that market transparency will be ensured and that harm and risk to potential investors can be prevented by strictly limiting actions that violate the ecosystem of virtual resources. I raised Daksa’s hand.

The increase in short selling is likely to weigh on Wemade’s share price going forward. Wemade rose to 245,700 won on November 26 last year thanks to the PE2 (Play to Earn) game expansion and expectations for Wemix, but now it has dropped to the 30,000 won level.

WeMade issued Wemix as a necessary means of building a gaming ecosystem. As of Q4 2021, the Wemix business accounted for 64.1% of the total sales of $352.3 billion won by the WeMade business.

The stock market is lowering WeMade’s target price one by one. Mirae Asset Securities lowered the share price target for WeMade from 70,000 to 51,000 won, and NH Investment & Securities also lowered it from 80,000 to 70,000 won. Hee-seok Lim, a researcher at Mirae Asset Securities, advised, “Challenges are expected across the blockchain business following the delisting of Wemix.

Another problem is that WeMade has not released a game that has been very successful since last year’s Mir 4. Initially, it was announced that it would release more than 100 games within the year, but due to the Wemix incident, the release is uncertain.

Kim Se-hee, a researcher at Eugene Investment & Securities, said, “Wemix was expected to be integrated (connected) with Wemix Play, a blockchain gaming platform, during the fourth quarter, but it wasn’t clear.” .”

Meanwhile, investors who hold Wemix must transfer Wemix from each exchange to an external personal wallet or another exchange where Wemix is ​​listed. By trade, Upbit supports withdrawals until January 7, Bitsum until January 5 at 3pm, and Coinone and Corbit until 3pm on the 22nd and 3pm on the 31st, respectively.

Reporter Hong Da-won [email protected]