Is Below 1000 Won a “Crime”?… The Two Sides of the KOSPI 5500 Era

한국거래소는 7월 1일부터 주가 1000원 미만인 코스닥 기업을 퇴출하기로 결정했다. / 사진 제미나이로 생성

It is the era of KOSPI 5500 point. Large-cap stocks are rewriting record highs day after day. The market is on fire.

But on the other side, a completely different atmosphere prevails. It surrounds KOSDAQ stocks trading below 1,000 won. The blade of regulation is now pointed at the KOSDAQ.

The Korea Exchange will significantly tighten delisting standards for penny stocks and financially distressed companies on the KOSDAQ starting in July. On the surface, the rationale is simple.

“Low-priced stocks are vulnerable to speculation.”
“Zombie companies must be cleared out to restore market trust.”

The logic is not wrong. The issue lies in the method.

The core of the reform is price. If a stock remains below 1000 won for 30 consecutive trading days, it will be designated as a managed issue. If it fails to recover above 1000 won for at least 45 days within the following 90 trading days, it will proceed to delisting procedures.

From 2026, the market capitalization threshold will be lowered to 20 billion won. Full capital impairment will be assessed on a semiannual basis. Companies accumulating 10 or more penalty points for disclosure violations will be immediately subject to review.

This is not a minor adjustment. It amounts to a structural overhaul of the market. Industry observers say the number of companies facing delisting could increase substantially.

Can stock price alone serve as the single yardstick of corporate value? In capital markets, price is the outcome — a number shaped by performance, industry cycles, investor sentiment, and macroeconomic conditions.

The KOSDAQ, in particular, is home to ventures and small- and mid-sized enterprises. Companies investing heavily in research and development often endure years of losses. During economic downturns, even fundamentally sound firms can slide without resistance. Is it reasonable to filter such companies with a single line drawn at 1000 won?

There is also the issue of fairness with the KOSPI. The KOSPI has low-priced stocks. It has underperforming companies. Yet regulatory focus is directed squarely at the KOSDAQ. It is a move that applies stricter price-based standards to a market where volatility is intrinsic.

The KOSDAQ was originally designed as a platform for risk capital — a market that accepts the possibility of failure in exchange for growth opportunities.

The intention — protecting investors and reducing risk — is understandable. But the idea of controlling risk through price alone is overly simplistic. The 30-day consecutive threshold is highly sensitive to short-term volatility. Even the signal of a managed designation could trigger concentrated selling. The shock would ultimately fall on retail investors.

Of course, distressed companies must be weeded out. This is not an argument to shield firms that repeatedly erode shareholder value through reverse stock splits and rights offerings. The question is whether price should be the primary criterion for judging distress. Would it not be more appropriate to strengthen disclosure transparency and scrutinize unfair trading practices more precisely?

The KOSPI races toward record highs, while the KOSDAQ worries about survival lines. Whether the current regulation becomes a genuine structural reform or an excessive prescription that cuts off budding growth remains to be seen.

One thing, however, is clear. The KOSDAQ is not a market simple enough to be defined by a single number.