'National portal' Naver sees shares plunge to record lows as investors cry despair

Members of the Naver Z labor union chant slogans outside Naver's headquarters in Seongnam, Gyeonggi Province, during a partial strike over a wage freeze. [Yonhap]

"I bought Naver at 290,000 won ($219) and now it's at 170,000 won — I'm in despair," one Naver investor wrote online.

"It's finally done for," another said.

Shares of Naver, long regarded as South Korea's go-to internet portal, have been in freefall. A price floor of 200,000 won that investors had counted on gave way, with the stock tumbling into the 170,000-won range.

The slide has come despite expectations that Naver's share price would rise on the back of a joint AI factory project with Nvidia, leaving investors furious as the stock has instead continued to lose ground.

On Friday, Naver shares fell more than 2 percent from the previous session to close at 172,600 won — a collapse from the 300,000-won level the stock had cleared earlier this year to what is now near its all-time low.

Investor frustration is running high. Many shareholders are reported to have bought in near the peak, at prices between 280,000 and 300,000 won.

A meeting between Nvidia CEO Jensen Huang and Naver Chairman Lee Hae-jin had briefly sent the stock surging, but the gains evaporated almost immediately, with shares plunging back toward record lows.

"We thought Naver, which had been left behind during the bull market, was finally staging a V-shaped recovery and breaking out of its slump — but instead it fell even harder," one shareholder said.

Naver shares were once touted as capable of reaching 1 million won, a tenfold gain, fueling a nationwide craze around Naver Shopping. A company official said at the time that a market capitalization of 150 trillion won — implying a share price of 1 million won — was "not so much a goal as a reality to be achieved."

Weak earnings and mounting concerns about Naver's ability to compete with global tech giants in AI appear to be weighing further on the stock. The company posted sharply disappointing results in the second quarter of this year, and its third-quarter earnings are also expected to fall short of expectations.

Yet brokerages are putting out reports arguing that the current lack of enthusiasm makes now the right time to buy. Shinhan Securities raised its target price for Naver from 270,000 won to 310,000 won.

"New revenue streams from AI data centers and an expansion of the existing platform revenue base through AI agents are expected," said Ko Jun-hyeok, an analyst at Shinhan Securities. "The current share price, which reflects no optimism, is a buying opportunity."

Korea Investment & Securities also called the moment "an opportunity," maintaining its target price of 360,000 won for Naver.

In a research note, analyst Jeong Ho-yun of Korea Investment & Securities said Naver had given back most of its share price gains since announcing its AI factory project in June. He attributed continued investor caution to the time needed before the data center business begins generating meaningful revenue, compounded by delays in announcing contracts with major customers.

Korea Investment & Securities estimated Naver's third-quarter sales at 3.4955 trillion won ($2.64 billion), up 11.4 percent from a year earlier, with operating profit falling 21.1 percent to 450 billion won. The brokerage projected that earnings would recover from next year onward.

"Combining the favorable shifts now under way in the data center market with the prospect of that market beginning to grow domestically, the current low valuation is best approached as an investment opportunity," Jeong said.

park@heraldcorp.com