Webtoon Plunges 9.76%—Is This the Start of a Major Correction?

Summary
• Webtoon (WBTN) trades at $14.835, down 9.76% from its $16.44 previous close
• Intraday range spans $14.68 to $15.86 amid 3.38% turnover rate
• Evercore ISI raises price target to $23.00, signaling 145.73% upside potential

Webtoon’s sharp intraday decline has ignited market speculation about catalysts behind the 9.76% drop. With the stock trading near its 52-week low and a dynamic PE of -36.26, investors are scrutinizing technical indicators and options activity for clues. The Interactive Media & Services sector, led by Netflix’s 0.17% gain, offers a contrasting backdrop as Webtoon’s bearish momentum intensifies.
Technical Exhaustion and Analyst Divergence Trigger Sharp Selloff
Webtoon’s 9.76% intraday selloff aligns with overbought RSI levels (78.3) and a MACD histogram of 0.66, indicating short-term exhaustion after a bullish K-line pattern. While the 30-day moving average (10.08) and 200-day MA (10.35) suggest a long-term range-bound trend, the stock’s price action near the Bollinger Bands lower boundary (5.96) reflects oversold conditions. However, the absence of company-specific news and the sector’s mixed performance (Netflix up 0.17%) suggest the move is driven by technical profit-taking rather than fundamental shifts.

Interactive Media & Services Sector Mixed as Netflix Leads
The Interactive Media & Services sector exhibits divergent momentum, with Netflix (NFLX) rising 0.17% while Webtoon plummets. Meta Platforms’ 28.3 P/E ratio and 21.6% revenue growth contrast sharply with Webtoon’s -36.26 P/E and 52-week low proximity. Sector-wide, Meta’s 9.65% ROE and $25.12B EBITDA highlight structural advantages over Webtoon’s underperforming metrics, suggesting sector-specific factors may amplify Webtoon’s volatility.

Bearish Put and Cautious Call Options Emerge as Strategic Plays
• RSI: 78.3 (overbought)
• MACD: 0.98 (bullish), Signal Line: 0.32 (bearish divergence)
• Bollinger Bands: Price near lower boundary (5.96)
• 200-day MA: 10.35 (below current price)

Key levels to monitor include the 200-day MA at $10.35 and the 52-week low of $6.75. A 5% downside scenario (targeting $14.26) could trigger put option activity. Two top options from the chain:

• WBTN20250919P15 (Put): Strike $15, Expiry 2025-09-19, IV 95.32% (high volatility premium), Delta -0.439 (moderate sensitivity to price drops), Theta -0.014581 (time decay), Gamma 0.088076 (accelerating delta as price declines), Turnover 15,530
• WBTN20250919C15 (Call): Strike $15, Expiry 2025-09-19, IV 90.65% (premium pricing), Delta 0.558 (balanced directional risk), Theta -0.031257 (time decay), Gamma 0.092714 (potential for delta expansion if price rebounds), Turnover 1,871

Aggressive bears may consider WBTN20250919P15 as a short-term hedge against further declines, while cautious bulls might test WBTN20250919C15 for a rebound above $15.01. The put option’s high IV and gamma position it to capitalize on a sharp drop, while the call’s moderate delta offers limited downside risk if the stock stabilizes.

Backtest Webtoon Stock Performance
The backtest of WBTN's performance after an intraday plunge of -10% shows mixed results. While the 3-day win rate is 53.17%, the 10-day win rate is 47.62%, and the 30-day win rate is 49.21%, indicating a higher probability of positive returns in the short term, the overall return over the 30 days is -5.15%, with a maximum return of only 0.19% during the backtest period. This suggests that while WBTN may bounce back from a significant intraday drop, the overall trend remains bearish in the medium to long term.

Webtoon at Pivotal Crossroads—Act Now on Key Levels
Webtoon’s 9.76% intraday drop underscores its precarious position near the 52-week low of $6.75. While technical indicators suggest overbought exhaustion and bearish divergence, the stock’s long-term ranging pattern (10.08–10.35) offers potential for a rebound. Investors should monitor the 200-day MA and sector leader Netflix’s 0.17% gain for directional clues. A breakdown below $14.80 could validate the bearish case, making WBTN20250919P15 a strategic play. Aggressive bulls may test WBTN20250919C15 for a bounce above $15.01. Watch for $10.35 support or regulatory reaction.