Insiders Buying and Selling Prior To Mandatory Block Deal Pre-Announcement Requirement in Korea

• In this insight, we discuss recent, active insiders buying and selling their shares prior to the mandatory block deal pre-announcement requirement starting 24 July in Korea.

• The three companies that announced insiders selling (July) are down on average 3% YTD. However, the three companies that announced insiders buying (July) are up on average 74% YTD.

• LS Cable has been consistently increasing its ownership of LS Marine Solution, up from 46% stake as of 27 May 2024 to 56.14% as of 8 July 2024.

Photo by Luminos film on Unsplash

In this insight, we discuss recent, active insiders buying and selling their shares prior to the mandatory block deal pre-announcement requirement starting 24 July in Korea.The sharp increase in in disclosures of insiders selling/buying this year reflects the effect of the implementation of the insider trading prior disclosure system from the 24 July 2024.

This changed regulation require insiders of listed companies to disclose their trading plans at least 30 days prior to the trading start date if they trade more than 1% of the total number of issued stocks or stocks worth more than 5 billion won on a combined basis over the past six months. Transactions worth less than 5 billion won are exempt from reporting obligations.

The charts below show share prices of three companies that announced insiders selling in July (Devsisters, VM Inc, and Uni Chem) and three companies that announced insiders buying (LS Marine Solution, Daesung Industrial, and Deep Mind Platform). The three companies that announced insiders selling (July) are down on average 3% YTD. However, the three companies that announced insiders buying (July) are up on average 74% YTD.