이 기사는 2021년 07월 20일 08시02분 thebell에 표출된 기사입니다

South Korean gaming company Wemade has poured 50 billion won ($43.7 million), equivalent to more than three-quarters of its cash on hand, into Vidente, a broadcast equipment maker and major shareholder of Bithumb, in a move to indirectly participate in the crypto exchange’s management.

Kosdaq-listed Wemade bought 50 billion won in Vidente’s bonds with a warrant on Thursday, according to a regulatory filing.

Wemade can exercise the option to purchase Vidente’s new common shares at an exercise price starting from the end of July next year. This would make Wemade the second largest shareholder in Vidente.

The move is seen as part of the gaming company’s ambitions to expand into the crypto exchange business. Vidente owns the largest stake in Bithumb Holdings as a single shareholder.

The filing said the purpose of the deal was to strengthen the strategic partnership with Vidente. Analysts are focusing on whether Wemande has the sufficient financial strength to fund the purchase without hurting its mainstay gaming business.

In an analysts’ conference call held on Friday, Wemade’ chief executive Chang Hyun-guk rebuffed concerns about the company’s financial health, saying that the company had “net cash of 120 billion won”.

When calculating net cash, the company’s short-term investments and financial instruments measured at fair value are also included in a cash balance. Wemade had about 66.2 billion won in investments classified to be measured at fair value at the end of March. They included stocks in game developers such as Lionheart Studio, Hound 13, IMC Games and Ndream, which are unlikely to be cashed out in the near term.

Wemade’s cash and cash equivalents, the most liquid assets, were 62.7 billion won at the end of March. From a more conservative point of view, the company’s 50 billion won investment in Vidente represented more than three-quarters of its cash buffer. This signifies Wemande’s strong commitment to expansion to the crypto business even if this could result in a temporary deterioration in its financial position.

Wemade has reported a negative operating profit in the past three years and suffered negative operating cash flow of between 15 billion won and 40 billion won in the same period. Its earnings before interest, taxes, depreciation and amortization, a metric often used as a proxy for cash flow, were 4.9 billion in 2018, 2.5 billion won in 2019 and minus 7.3 billion won in 2020. (Reporting by Sang-woo Seong)