Line Corp soars in New York-Tokyo dual listings
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TOKYO - Shares in Japanese messaging app operator Line Corp surged almost 50 per cent in Tokyo on Friday after soaring as much as 36 per cent in their US market debut, valuing the startup at US$9.3 billion in the biggest tech IPO this year.
The shares first traded in the Tokyo Stock Exchange at 4,900 yen, or 48.5 per cent above their IPO price of 3,300 yen, helped by demand from investors hungry for a rare chance to invest in a tech startup.
In New York, the offering of 22 million American Depository Shares (ADSs) from the world's seventh-most used messenger app company was well-accepted, with the shares closing at US$41.58, well above the IPO price of US$32.84.
"Considering that Line is little known in the United States, the IPO seems to be a success," said a fund manager at a Japanese asset management firm.
The Tokyo-based company's decision to list first in New York is seen as a sign of its determination to challenge its global peers as it seeks to expand outside Japan and South-East Asia.
Line is controlled by South Korea's Naver Corp.
After the offering, Naver's ownership dropped to 80.8 per cent.
The app has a lot of ground to cover in major Western markets, where Facebook Inc's Messenger and WhatsApp are dominant, and in China, where Tencent Holdings Ltd's WeChat is popular.
As of March, Line had 218 million monthly active users (MAUs). WhatsApp leads the pack with about 1 billion MAUs, while Facebook Messenger is No. 2 with 900 million.
Line is the world’s seventh largest mobile messenger service with more than 218 million users. The majority of the users are located in Indonesia, Japan, Taiwan and Thailand.
In a recent media interview, Line’s chief global officer Shin Jung-ho said the firm could consider “setting up a joint venture with a Chinese company” to increase its foothold in a country where its services are blocked due to government regulations.
“Joining hands with a Chinese firm to establish a joint venture to tap into the Chinese market is one of many options to launch its mobile messenger service in earnest in China,“ said Line publicist Kim Hyun-ji, regarding the interview.
Some market watchers said Shin’s comments were aimed to address market concerns over the lack of a Chinese presence for the Tokyo-based firm.
The bulk of Line's revenue comes from games and sales of emojis and electronic stickers. The company's revenue and other operating income rose about 28.3 per cent to 120.88 billion yen in 2015.
Line reported a loss of 7.97 billion yen in 2015, compared with a year-earlier profit of 2 billion yen.
Morgan Stanley, Goldman Sachs, JP Morgan and Nomura are among the underwriters to the IPO.
