Glosfer CEO claims the company is undervalued
During an interview at Gangnam, southern Seoul, Jeon Si-young said he has known Glosfer CEO Kim Tae-won for some time now and even invested in Hycon, Glosfer’s early blockchain project. Glosfer has been facing rumors that CEO Kim was running a hit-and-run scheme when he acquired Glosfer Labs and Glosfer Labs in turn purchased a 74.53 percent stake in Glasfer for 25.5 billion won. The company claims that no action in the acquisition process was illegal. Jeon claims otherwise. “In general, company CEOs do not sell off subsidiary shares. If they do, it should be reported to the Financial Supervisory Service. This is a fact I was told from an accountant that specializes in this field,” he said. “The reason Glosfer was able to get away with this is because it doesn’t have the obligation to undertake external audits.” According to domestic law, companies with less than 12 billion won in total assets do not need to be externally audited and can settle their accounts after finishing internal audits. Firms of this kind can more easily fake their books. CEO Kim “did not run” Join.D made numerous phone calls to CEO Kim Tae-won on Dec. 12 but couldn’t reach him as the phone was turned off. During a visit to the Glosfer office the following day, a company employee explained: “CEO Kim did not run. As we mentioned in our statement, he’s currently in shock after receiving blackmail threats from several individuals.” Join.D was able to talk to Kim through the employee by phone. Glosfer is undervalued During the phone call, CEO Kim refuted claims made by several investors. The biggest rumor regards the corporate value of Glosfer. CEO Kim claims Glosfer is worth 36 billion won, which is the value of the company’s shares. But Glosfer’s net worth in late 2018 was around 7 billion won. Annual revenue that year was 4.4 billion won. Operating losses in 2018 totaled 5.7 billion won, while net profits were 226 million won. In regards to net profit figures, posts at online cryptocurrency communities have speculated that the net profit was related to the initial coin offering. The question comes down to: Can a company with a 4.4 billion won operating loss and a net value of merely 7 billion won be valued at 36 billion won? The big doubt is whether Glosfer Labs gave an excessively high valuation to Glosfer, eventually benefiting CEO Kim. “Glosfer was valued at 50.1 billion won in May,” said CEO Kim. “Local blockchain companies Iconloop and Blocko received funding with valuations of 70 to 80 billion won. Glosfer at the moment is undervalued,” he added. “Hiding money doesn’t make sense” After the purchase of 74.53 percent stake in Glosfer, Glosfer Labs transferred the payment to CEO Kim’s personal account. This raised the possibility that CEO Kim was planning a hit and run. Kim also argued against such claims, saying he legitimately sold off his Glosfer stock, so it is only logical that the transaction’s payments were sent to his private account. “With that payment, I purchased 23 percent of Glosfer Labs’ stock and management rights—hit and run doesn’t make sense,” he said. Kim also strongly rebutted rumors that he was filling his own pockets by making an listed company in to a shell. “That would mean Glosfer is an empty shell, but this company was valued by two mid-sized accounting firms. No accounting firm inflates evaluation for a valueless company,” Kim said.