Line had previously delayed setting an IPO price range in late June due to market uncertainty, according to The Wall Street Journal. 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.
Advertisement
The biggest technology sector IPO of the year for both nations, Line rose Friday above its IPO price of 3,300 yen, settling at 4,345 yen, although it started higher at 4,900 yen.
By raising more than $1 billion through the dual IPO, the Tokyo-based company is eager to bolster its business abroad and develop new services to better compete with overseas rivals.
Last year, Line posted revenue of 120 billion yen (39.88 billion baht, $1.1 billion), up 40% from the year before, but a small overall loss, which it blamed on rising staff costs and other expenses. Trading in Tokyo will begin Friday.
The shares are trading on the Tokyo Stock Exchange and on the New York Stock Exchange as ADR depositary receipts under the ticker sign “LN”.
By contrast, Line’s MAUs were up only 6% annually in March, as competition from Messenger and WhatsApp stunted user growth outside of Line’s core markets of Japan, Taiwan, Thailand and Indonesia. The company explained that 61% of its monthly active users (MAUs) use the app on a daily basis, but the figure is 73% if users from the four biggest countries are taken into account as well.
Naver Corp. now owns 100% of the company’s outstanding shares and will have about 83.3% of the voting power after the offering. At the same time it’s so much more than these services, offering its users a way to call and message friends, keep up with news and entertainment, order taxis, make mobile payments, find discount vouchers, and stream music. Line, which has about 218 million users, said in its prospectus that the pace of user growth has slowed.
While Line has become a major force in the messaging space since its debut in 2011, the name is likely unfamiliar to many outside of Asia. Some of the most innovative American tech companies – Snapchat, Facebook, Apple and Google – are trying to replicate these messaging apps’ success with their own.
“What investors are focused on now is what Line will do with that large number of users to expand its growth through advertising revenue, for example”.
Line secured more ammunition to expand its business to the USA and other new markets.
The app was released to the public later that year and, as of last August, it has been downloaded by over 600 million people.
Advertisement
Line’s revenue may be reassuring to investors, but it hasn’t been driving a profit, according to data from the company.
