PUBLISHED :June 07, 2019 - 15:36

UPDATED :June 07, 2019 - 15:43

The stock price ofStudio Dragon has fluctuated over the course of this week as the K-drama blockbuster “Arthdal Chronicles” draws mixed reactions from viewers and stock investors alike.

Analysts have joined the race to cut the target price of Studio Dragon since earlier this week, while the company has fallen prey to the short selling of its stocks.

Hong Se-jong, an analyst at Shinhan Investment, revised the target price down by 13.3 percent to 104,000 won ($88.10) per share on June 7, from the previous 120,000 won.

This was in line with a series of target price revisions from Korean brokerage houses since Studio Dragon hit a 52-week low at 65,800 won on June 3, right after airing the first two episodes of the drama earlier the same week. It took a 9.4 percent intraday loss June 3.

On June 3, Lee Hyo-jin of Meritz Securities lowered the target price by 15.9 percent to 95,000 won. The next day, Studio Dragon’s target price according to Kim Hyun-yong of eBest Investment & Securities came to 85,000 won, down 11.5 percent, and another issued by Han Sang-woung of Eugene Investment & Securities fell 17.3 percent to 91,000 won.

Short selling activities on June 3 were high as well, so much so that the Korea Exchange imposed a temporary short selling restriction on June 4.

The daily trading volume of Studio Dragon stocks reached its lowest point in a year, 56.6 billion won, June 3. In the meantime, short selling activities accounted for 23 percent of the total -- the highest figure in a month, according to data from the Korea Exchange.

While it is premature to determine whether the multi-season series “Arthdal Chronicles” will fail or succeed after just two episodes, investors are dismayed as the potential financial burden and uncertainties are under the spotlight, wrote NH Investment & Securities analyst Hazell Lee.

“Studio Dragon’s shares have fared ill as of late on worries over delays in resumption of its Chinese sales, a possible short-term slowdown in margins growth due to the airing of multi-season drama and uncertainties over whether Season 2 for the drama will actually come,” wrote Lee, who also pulled down the target price by 14.8 percent to 115,000 won on June 5.

But Hong of Shinhan Investment said there was room for Studio Dragon to rebound, citing a support level -- 1.6 trillion won market cap -- given data over the past two years.

Studio Dragon is the eighth-largest stock trading on South Korea’s development board Kosdaq by market cap, which stood at some 2 trillion won as of June 6.

In part, this reflects local viewers’ disappointment with “Arthdal Chronicles,” a tribal fantasy TV series that premiered on tvN and Netflix. The series stars actors Jang Dong-gun and Song Joong-ki, as well as actresses Kim Ji-won and Kim Ok-bin.

Critics point to similarities between “Arthdal Chronicles” and “The Game of Thrones” and to what they call the subpar quality of its computer graphics, despite the 54 billion won production costs.

Studio Dragon’s stock price closed at 73,600 won as of June 7, up 5.6 percent from a day prior.

By Son Ji-hyoung (consnow@heraldcorp.com)