Line Corp. surged 27 percent in its United States trading debut after the Japanese messaging company raised more than $1 billion in the biggest technology initial public offering of the year.
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Japanese messaging-app maker LINE debuted on the New York Stock Exchange today, and what a first day of trade it was. The stock is now at 43.
The company offered 22 million shares on the NYSE as American depositary shares, and 13 million shares on the Tokyo stock exchange.
Line has sold 35 million shares of stock – split between 22 million American depository receipt shares listed in NY and 13 million shares listed in Tokyo.
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 closing price values the five-year-old app around $8.9 billion.
IBD’S TAKE: Line is the latest in a recent run of strong tech IPO tech debuts.
Its mobile messaging application, which is the foundation of the Line platform and operates on all major mobile operating systems, enables users to communicate through free instant messaging and voice and video calls and serves as a smart portal to other applications and services.
But Line remains challenged to boost its popularity beyond East and Southeast Asia, and some Spanish language markets, amid a field crowded with innovative mobile messaging services like Facebook Messenger, WeChat, WhatsApp, Skype and Snapchat.
Line has about 218 million active monthly users globally but most are in a handful of countries, including Japan, Thailand, and Indonesia, and it is struggling to attract new users. By comparison, it took Facebook more than three years to hit 58 million users. WhatsApp, which Facebook bought for almost $22 billion in 2014, announced in early February it had topped 1 billion MAUs, up from 700 million in January 2015. Line’s campaign there includes the introduction of a service allowing users to find and connect to classmates.
Line follows the successful tech IPOs of Twilio (TWLO) and Acacia Communications (ACIA).
If Facebook and Twitter are any indication, though, the real test will come in the next few months as investors scrutinize its user and sales growth.
It also did well in the US, rising by 26.6% in its NY trading debut to close at $41.58 on Thursday, July 14. Acacia stock was near 51, up 2.8%, touching a fresh high intraday.
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There are some concerns behind the growth of the company, as in its IPO filing the company notes that there has been a significant decrease in usage outside its four main countries.
