The Born Korea shares surge 13% as investors see hope after months of losses

"I've never seen a surge like today, Friday the 14th." — The Born Korea investor

"Now I can finally see some hope." — The Born Korea investor

What many had been waiting for finally arrived. The Born Korea, led by CEO Baek Jong-won, posted its biggest single-day gain of the year on Friday, closing up 12.78% at 15,890 won from the previous session. Driven by strong buying, the stock climbed more than 26% during trading to briefly top 17,000 won.

It was the first time this year the share price had surged by such a margin.

The stock had previously fallen to an all-time low since its listing, leaving investors who had trusted Baek stunned. With the share price cut roughly in half from the IPO price of 34,000 won, the value of Baek's stake — the largest in the company — had shed about 60 billion won compared with the end of last year, when it stood at 212.8 billion won. Baek held 8,792,850 shares, or 59.3%, as of the end of the first quarter.

A broader deterioration in the dining industry, weak company earnings and a series of controversies had dampened investor sentiment, all weighing on the share price.

Shareholders have suffered significant losses as the stock halved in roughly two years since listing. Many investors had bought in on the strength of Baek's public profile and expectations for expansion of the company's food-service franchise business.

The sharp rebound appears to reflect growing optimism about overseas expansion and an improvement in earnings.

The Born Korea significantly narrowed its operating loss in the second quarter despite a sluggish dining market. The company disclosed Friday that it recorded an operating loss of 5.6 billion won on a consolidated basis in the second quarter — a 75% reduction from the same period last year. Second-quarter sales reached 83.2 billion won, up 12% year on year.

"Last year's second quarter was an exceptional situation in which we injected large-scale mutual-aid funds to overcome numerous hardships and a serious downturn in the dining industry," a company official said. "This year, we are maintaining normal business operations while improving a significant portion of our earnings."

Baek earlier said he had visited local restaurants in Los Angeles to advance the overseas expansion of TBK (The Born Korea) sauces, introducing menus using 11 varieties — including a kimchi powder sauce and a seasoned chicken sauce — and discussing product supply and recipe application plans with local partners.

The Born Korea is staking its future on securing new growth engines through strategic mergers and acquisitions and overseas expansion this year. Whether the company can recover its IPO price roughly two years after listing remains to be seen.