OpenAI revenue shock drags Korea stocks lower as foreigners sell - CHOSUNBIZ
Korean Alphabet Day holiday fallout from the OpenAI bubble debate sent Korea's stock market plunging on the 12th. The KOSPI and KOSDAQ indexes each closed down 3%–4%.
The KOSPI index closed at 6,384.24, down 241.69 points (3.65%) from the previous session. After opening lower, the index deepened its intraday losses and gave up the 6,400 level.
Foreign investors were net sellers of more than 2.5 trillion won, dragging the index down. Foreigners have been net sellers for five consecutive sessions. Institutions also were net sellers of 250 billion won. Among institutions, investment trusts had large net sales. Individuals bought 2 trillion won net, and other corporations, presumed to be share buybacks by Samsung Electronics and SK hynix, had a 650 billion won net buying advantage.
Semiconductor stocks fell sharply. Samsung Electronics(005930) and SK hynix both plunged 4%, retreating to around 250,000 won and 1.6 million won, respectively. SK Square (6.29%), Samsung Electronics(1P) (3.71%), and Samsung Electro-Mechanics (3.82%) were also weak.
The market's steep decline was attributed to investor sentiment freezing after OpenAI's revenue fell short of expectations. Last week, foreign media including the Financial Times (FT) reported that OpenAI's annual recurring revenue (ARR) as of the end of September was close to $50 billion. That is 29% below the $70 billion the market had expected, rekindling debate over overheated AI investment.
However, Bloomberg projected that ARR of $70 billion could be achieved by year-end, and some said the market sell-off was excessive.
The rise in international oil prices eased somewhat. U.S. President Donald Trump said there would be no additional attacks on Iran until the Nov. 3 midterm elections. At the same time, he announced an agreement with Russia to supply 300,000 tons (t) of diesel.
Lee Kyung-min, a researcher at Daishin Securities, said, "Macro burdens have eased, but micro factors such as OpenAI are failing to reverse investor sentiment."
Most stocks fell, but Hanwha Machinery & Service Holdings(0220W0) jumped 24% on news that President Kim Dong-Sun would launch a tender offer. Some financials including Shinhan Financial Group(055550) and Samsung Fire & Marine Insurance(000810) also rose.
The KOSDAQ index closed at 849.19, down 43.08 (4.83%). Foreign investors and institutions were net sellers of 27 billion won and 222.8 billion won, respectively. Individuals alone had a 248.8 billion won net buying advantage.
Semiconductor materials, parts, and equipment (small and mid-sized suppliers) stocks such as SIMMTECH(222800) were weak. LEENO Industrial (11.15%), Wonik IPS (2.09%), and Jusung Engineering (5.42%) fell.
