World’s best share and 1000% increase: Failed stock market genius now swarming in jail

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The South Korean company Ecopro has been attracting the attention of investors around the world for months. More precisely, their shares. It increased 919 percent this year, sometimes over 1000 percent. This is the largest gain in the world for a company with a market cap of at least $10 billion.

Finally, this title is very popular among sustainability-focused investors. The company is engaged in the manufacture of battery materials. However, many small South Korean investors also welcomed the name. That’s because almost everything related to components and materials for electric vehicles is trading hot on Asian exchanges.

Ecopro BM, a listed subsidiary, also posted gains of over 200 percent this year. It provides the cathodes of lithium-ion batteries for customers like Samsung.

1.5 million francs fine

But there is a fly in the ointment in the success story. Former Ecopro CEO and Chairman Lee Dong-chae is serving a two-year prison sentence for violating the country’s capital markets laws. He also has to pay a fine of CHF 1.5 million.

Lee Dong-chae was convicted of insider trading allegations, which Lee has always denied. South Korea’s Supreme Court upheld its decision last month. Lee has been in prison since August.

Lee resigned as CEO in March 2022, following allegations that several Ecopro employees, including himself, engaged in insider trading. In a statement from the Supreme Court of South Korea, it was stated that Lee used his own account and the accounts of his children to trade Ecopro BM shares, based on undisclosed information about the company’s cathode supply contracts in 2020 and 2021.

From fur trader to technology entrepreneur

Coming from a poor background in the southeastern port city of Pohang, 63-year-old Lee previously worked as an accountant and also unsuccessfully traded furs and founded Ecopro in 1998, inspired by the goal of the 1997 Kyoto Protocol. Ecopro initially focused on producing environmentally friendly products before moving on to material development for electric vehicle batteries 20 years ago.

As is always the case with such rapid rises in the stock markets, there are concerns that the stock may soon take a serious plunge. Ecopro is growing significantly. Sales increased 64 percent in the second quarter.

However, the price has performed so well that the stock’s P/E ratio is now 440. “There is a huge discrepancy between the current price and the value of the company,” Hyunsoo Kim, an analyst at Hana Financial Investment in Seoul, told Bloomberg.

Lee continued to be Ecopro’s largest shareholder, directly and indirectly owning approximately 25 percent of the company. The rise in share prices this year has made Lee’s prison sentence more bearable: his fortune rose from $4.5 billion to nearly $4.9 billion at the time Lee was investigated, according to Bloomberg.

Source :Blick