Line, which is owned by South Korea’s Naver Corp., debuted overnight in NY where its stock soared about 27 percent by the close.
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Line Corp. President and CEO Takeshi Idezawa speaks during a press conference in Tokyo, Friday, July 15, 2016.
Line’s users are mainly in Japan, Taiwan, Thailand and Indonesia.
Line entered India about three years ago but trails Facebook-owned WhatsApp and Hike, backed by Bharti Enterprises and Japan’s SoftBank Group Corp, by number of users.
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 $41.58, well above the IPO price of $32.84.
Line’s messaging app was launched in the aftermath of Japan’s 2011 natural disaster and tsunami to overcome downed communications, growing unexpectedly to become the country’s dominant mobile messaging platform over the next few years.
Driven by high investor demand, Line shares on the Tokyo Stock Exchange closed at 4,345 yen ($41) on Friday, up 32 percent from its initial offering price of 3,300 yen, giving the company a market valuation of about 900 billion yen ($8.5 billion). However, the company itself has been controlled by Naver Corp the online media provider from South Korea.
Line will raise up to 132 billion yen through the issuance of new shares via its IPO to finance capital spending on servers and other equipment as well as corporate acquisitions to prepare for an increase in access to its services and an expansion of them.
Japan and Thailand are especially ripe for increasing ad-based revenue due to their relatively low rate of digital advertising, Idezawa said.
Using the new funds from the IPO, Line is looking to develop services that can add new value to the app as well as explore appealing technologies that would allow the firm to venture out of its Asian strongholds and into new markets in the West, Lee said. “The company’s profit is growing rapidly, and investors are really interested in the mobile-related market”.
Line earns the bulk of revenue from games and the sale of emojis and electronic stickers. “In the US, there is much more competition”, he said.
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The messaging service was later spun off as a separate firm, based in Tokyo. While Line made a profit of about $19 million on about $815 million in revenues in 2014, it lost about $75 million previous year on revenues of about $1.1 billion (all figures at current exchange rates), according to initial public offering documents.
