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Investors short sell Doosan Infracore shares ahead of affiliate’s IPO price forecast

[THE INVESTOR] Doosan Infracore appears to have been a major target of short selling last week ahead of its price range announcement for the initial public offering of its affiliate Doosan Bobcat, market watchers said on Oct. 14.

After completing a demand forecast early Oct. 10, Doosan Infracore offered a price band of between 40,100 won (US$35.50) and 50,000 won for the IPO aimed at improving the financial health of its parent Doosan Group.

However, Doosan Bobcat announced a decision on Oct. 10 to postpone its planned IPO on the local stock market, citing lukewarm market response.

Industry sources said local institutional investors are suspected of having targeted Doosan Infracore after knowing beforehand that a failed price demand could lead to a decline in its share price.

Doosan Infracore owns a majority 66.5 percent stake in Doosan Bobcat, which operates 31 subsidiaries in 20 countries and is a leading player in the small construction machinery sector in the United States.

According to the Korea Exchange and Daishin Securities, the volume of short-sold Doosan Infracore shares came to 1.42 million on Oct. 5, the largest daily figure since its listing. The value reached 11.1 billion won, or 35.8 percent of the day‘s total turnover for Doosan Infracore.

The amount of short-sold Doosan Infracore shares reached 1.06 million Oct. 7, the last day of the demand forecast involving local institutional investors.

Korea Herald daum