Recently, Baek Jong-won, the CEO of Theborn Korea, has been involved in several controversies that have negatively affected the company’s stock performance. This case highlights the broader issue of owner risk, where the actions or reputation of a company’s founder or major shareholder can significantly impact its valuation. In this post, we explore what owner risk is, examples from other companies, and why investors should pay close attention to it.
Owner Risk: The Shadow Behind Stock Prices
Theborn Korea, one of Korea’s most recognized food franchise groups, is now facing the darker side of public attention. Its CEO, Baek Jong-won, long admired for his relatable and trustworthy media presence, has recently become embroiled in allegations that have shaken investor confidence. This is a textbook example of how owner risk can ripple through a company’s valuation and reputation.
What Is Owner Risk?
Owner risk refers to the negative impact on a company’s image or performance due to its major shareholder or CEO’s personal misconduct, ethical issues, or public controversies. This is especially prevalent in owner-centric businesses, common in Korea, where the founder is both the decision-maker and the public face of the company.
Theborn Korea: Stock Drop Triggered by Owner Risk
Theborn Korea went public on the KOSPI in November 2024, with its stock price peaking at ₩64,500 on the first day—well above its IPO price of ₩34,000. However, shortly after listing, controversies surrounding the high price of its “Baek Ham” product and rental fee issues involving Baek Jong-won surfaced. Because Baek is so closely tied to the brand’s identity, his personal image crisis became the company’s crisis. The stock soon fell below ₩30,000 by February 2025, illustrating how investor sentiment can be directly shaped by an owner’s reputation.
Other Notable Cases of Owner Risk
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Korean Air (Hanjin Group): The infamous "nut rage" incident involving the owner's daughter led to brand damage and shareholder disputes.
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Namyang Dairy: A series of scandals involving the owner’s unethical behavior led to public boycotts and eventual sale of the company.
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Osstem Implant: An embezzlement case involving a finance employee snowballed into a trust crisis, affecting the company’s valuation and governance image.
A Warning for Investors
Beyond financial reports and market trends, the people behind a company matter—especially in owner-led firms. A CEO’s values, past behavior, and crisis management capabilities must be scrutinized as carefully as earnings reports. Owner risk is not hypothetical—it’s quantifiable in stock performance.
In Closing
Baek Jong-won has built a strong rapport with the public over the years. While the recent controversies may cast a temporary shadow, we hope he uses this moment to make Theborn Korea a more transparent and ethically sound company. At the same time, investors should remember that owner risk is a critical factor in long-term decision-making. Reputation is fragile, but trust can be rebuilt—with effort and integrity.
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