AIBRIEF
Analysts have long valued the parts at roughly twice the combined market cap. The board approved the breakup anyway. Investors answered with a sell off.
Kakao, the company behind KakaoTalk, the messaging app roughly 95% of South Koreans use, on Friday approved a long-requested breakup into two separately listed companies: KakaoAI (KakaoTalk plus AI, advertising, and commerce) and KakaoX (fintech, mobility, and entertainment).
The market answered the same morning. Kakao shares fell about 12% on the Korea Exchange to ₩34,150 (~$24.71), even as published analyst work values the parts at roughly twice the combined market cap. That gap, the >50% "conglomerate discount" that has weighed on Kakao for years, is the question the split is meant to close.
Sum-of-the-parts math, which adds the implied value of each business as if it traded alone, sits near ₩34.2 trillion (~$24.75 billion); the combined market cap is closer to ₩16.8 trillion (~$12.16 billion). The Friday drop widened it. Published 12-month price targets around ₩76,593 (~$55.42) imply ~78.8% upside from the post-announcement price.
The split is a proportional, no-cash spinoff at book value (0.36 KakaoAI / 0.64 KakaoX per share), with an EGM vote on Dec. 17, 2026 and separate trading from Jan. 27, 2027. Kakao has not said whether founder Kim Beom-su's pending appeal of his SM Entertainment stock-manipulation case, a hearing on Aug. 26 and a ruling expected in October, is part of the operator-credibility case the market still has to make.