South Korean online game giant NCSoft Corp. seeking another jackpot through the mobile version of role-playing blockbuster Lineage stoked blast from investors for suspicious actions adverse to stock value and invited probe on possible illegality in the trade.

Short-selling orders in the game publisher’s stock on Tuesday reached 196,256 shares, or 17.8 percent of total transaction in the stock and also the largest-ever volume since its debut in 2003. Short sales valued at 76.2 billion won ($66.8 million), six times more than the second biggest orders worth 12.2 billion won in SK Hynix shares.

The massive unloading sent the stock price down by 11.4 percent on Tuesday to 361,000 won from the previous session and 15.4 percent from its peak finish of 426,500 on Friday amid high expectations for the June 20 release of Lineage M.

Investors suspect suspicious motive as short sales in the stock did not go over 20,000 shares a day throughout this year. The identities of the short sellers are not clear. On the day foreign players net sold 31 billion won worth in the shares and institutional investors 55.4 billion won worth.

Short selling is a legitimate investment scheme where investors who bet on a drop in a certain company’s stock can borrow stocks of the company and sell them, and make a profit on the difference if the stock price actually falls. But it can sometimes be abused as profit-taking and speculative means ahead of unfavorable news through insider tip.

Moreover, after the market closed the company disclosed in a regulatory filing that Bae Jae-hyun, NCSoft executive vice president, disposed of 4,000 shares in the stock on June 13 and another 4,000 shares two days later. The dumping took place when NCSoft’s stock was at historic high levels.

The stock has been weighed down by rumors that the company could limit in-game item trade under the order of authorities to protect minors. Game publishers earn revenue mostly from sales and trade in items.

On Wednesday, the company admitted that its in-game item marketplace is under review by authorities, but added that it was readying market opening before July 5.

Upon retail complaint, regulatory authorities have embarked on a probe. “We have received a flood of complaints about short-selling in NCSoft shares and disposal of Bae’s stockholding and will look into any illegality through use of inside information,” said Yoo Jae-hoon, chief of Financial Services Commission’s market investigation team.

Local regulators have toughened watch on short-selling after the practice based on insider tip in Hanmi Pharmaceuticals delivered heavy losses for retail investors in September last year.

As of 2:03 p.m. on Thursday, shares of NCSoft stand at 350,500 won, down 14,500 won or 3.97 percent from the previous session.

By Lee Yong-gun and Chung Woo-sung

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]