# Kakao's Spin-Off Plan Hits a Wall of Investor Skepticism > Kakao shares dropped more than 7 percent after the company unveiled a plan to split into KakaoAI and KakaoX, wiping out 1.8 trillion won in market value even as the move is meant to close a wide valuation gap. - Source: Korea First - Canonical URL: https://koreafirst.tv/article/kakao-s-spin-off-plan-hits-a-wall-of-investor-skepticism - Author: Korea First Staff - Section: Money - Published: 2026-08-23T15:58:15.681Z - Updated: 2026-08-23T15:58:15.681Z - Tags: Kakao, KakaoAI, KakaoX, stock market, spin-off, Kim Do-young - Korean edition: https://koreafirst.tv/ko/article/kakao-s-spin-off-plan-hits-a-wall-of-investor-skepticism --- Kakao shares fell more than 7 percent on Friday after the company unveiled plans to split itself into two separate entities, a reaction that erased roughly 1.8 trillion won, about 1.3 billion dollars, in market value in a single session and underscored how little goodwill the plan has bought so far. Under the restructuring, Kakao will divide into KakaoAI and KakaoX by January 1, with KakaoAI set to relist on January 27. Existing shareholders will receive shares in both companies in proportion to their current holdings, the standard mechanic for a spin-off of this kind. ## Two Companies, Two Missions The split draws a clean line through Kakao's sprawling business. KakaoAI will house KakaoTalk, the company's advertising and commerce operations, and its artificial intelligence push, under chief executive Chung Shin-a. KakaoX will operate more like a holding company, overseeing investments in payment, mobility and entertainment affiliates, led by Kim Do-young. Kim framed the restructuring as a direct answer to how the market prices Kakao today. The main purpose of the spin-off, he said, is to address the significant discount on Kakao Group, pointing to a gap between what analysts think the conglomerate is worth and what its shares actually trade for. ## A Wide Valuation Gap That gap is large by any measure. Brokerage consensus puts Kakao Group's combined value at 34.2 trillion won, while the company's average market capitalization over the past three months has sat at just 16.8 trillion won, a shortfall of roughly 17.4 trillion won. Both new entities have pledged to narrow that distance with cash back to shareholders. KakaoAI plans to return up to 35 percent of free cash flow, while KakaoX has committed to returning 30 percent of the dividends it collects from subsidiaries and 30 percent of any investment gains. ## Investors Are Not Convinced Yet The stock's drop suggests the market wants proof before it credits the plan. Analyst Kim So-hye said Kakao's AI business has yet to prove its monetization potential, a gap that matters because AI is meant to be the growth engine housed inside KakaoAI once the split takes effect. Without a clearer path to revenue from that business, the spin-off risks looking like a reshuffling of the same assets rather than a fix for the discount it is meant to close. ## A Familiar Playbook, Tested Again Kakao has trimmed its sprawling affiliate structure before, cutting the number of group companies from 158 in June 2021 to 99 by October last year, and it has spun off units in the past, including Kakao Games in 2020 and KakaoBank and KakaoPay in 2021. Whether this latest split fares better than Friday's stock reaction suggests will likely depend on how quickly KakaoAI can turn its AI ambitions into results investors can see in the numbers. --- Originally published by Korea First. Free to cite with attribution and a link to https://koreafirst.tv/article/kakao-s-spin-off-plan-hits-a-wall-of-investor-skepticism.