Shares of the WhatsApp rival began trading in Tokyo on Friday morning at 4,900 yen ($46.1) apiece, 48% higher than the IPO price of 3,300 yen.
Advertisement
The surge followed Japan-based Line’s new shares roaring to life in NY, where it kicked off trading Thursday after the $1.3 billion IPO.
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. Line sold 35 million shares and also exercised a greenshoe option to sell an additional 5.25 million. Proceeds from the offering will be used to expand across Asia and, eventually, the United States, according to the prospectus.
Line said it ended Q1 with 218 million monthly active user, up 6% year over year, with 152 million of those users located in its four largest markets of Japan, Taiwan, Thailand and Indonesia.
“As it will be hard to compete on the mobile messenger business in Europe and the USA, markets to which we want to expand, we will make bold investment into new technologies create new business areas to excel in”, Lee said.
Line Corp., a Japan-based global chat app operator, debuted on the Tokyo Stock Exchange on Friday after a strong start on Wall Street.
In 2013, Line’s revenue amounted to 39.6 billion yen.
Still, while the company has 218 million monthly active users and its revenues increased 28 percent past year, it lags far behind market leader WhatsApp, which has 1 billion MAUs.
IP is also part of Line’s strategy with the company being famed among its user base for its characters, which with in app purchases and licensing agreements make up a decent portion of their revenue; in places like Japan and Thailand Line characters are seen on t-shirts, bags, and various other products.
The company is selling about two-thirds of its stock in the US.
Line reported a loss of 7.97 billion yen in 2015, compared with a year-earlier profit of 2 billion yen. The traders have a tendency to favour stocks popular with the general public, with retail investors drawn to the IPOs of companies whose services they use.
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.
Morgan Stanley, Goldman Sachs, JP Morgan and Nomura are among the underwriters to the IPO.
Advertisement
Before it’s here, it’s on the Bloomberg Terminal.
