The shares first began trading at 48.5 percent above their IPO price, with investors calling the IPO a success. The ADR shares were priced at $32.84 each. The stock is expected to trade in Tokyo on Friday.
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Line Corp.is a “winner-takes-all near-monopoly messaging platform in Japan”, said Jefferies’ Atul Goyal, who started his coverage with a Buy and 4,200 yen price target, implying another 27% upside from the IPO price.
Morgan Stanley, Goldman Sachs, JP Morgan and Nomura were among underwriters for the IPO.
One service allows users to create and sell their own characters, while Line’s homegrown stable of stickers includes the duck Sally, a sad-faced bear called Brown and Cony the rabbit. “As a company providing infrastructure for communication, we felt it’s important to increase trust in our transparency, which is why we chose to go public”.
The company though is not resting on its laurels and is actively trying to expand its user base, and it is available in over 200 countries worldwide; the way they are aiming to grow their user base is through a process they call “culturalization”, by which Line develops services and features tailored to users’ needs in individual markets potentially giving it an advantage over their competitors. “In the USA, there is much more competition”, he said.
Revenue rose just 19% in the first quarter, according to the company’s F-1 filing with USA securities regulators.
“The growth in the number of users has nearly stopped”, said Serkan Toto, founder of consultant Kantan Games Inc., which specializes in Japanese apps and mobile games.
“Accordingly, you should not rely on the revenue growth of any prior quarterly or annual period as an indication of our future revenue growth”, the prospectus states.
Will Line’s emoji stickers go the way of Farmville fenceposts? More recently, apps like Facebook Messenger and Apple’s iMessage have followed suit by incorporating stickers into their services. Line also has an algorithm to help users find the right sticker. For example, one series depicts a character suffering from depression while looking for a job, TechCrunch reported. Line’s games have racked up a cumulative 628 million downloads, the company said. Toto points out that unlike, say, WhatsApp, which offers a bare-bones messaging function that can scale easily around the world, Line remains focused on the “Asian tastes” of its core user base in Japan, Taiwan, Thailand and Indonesia.
The idea for the messaging app came out of the 2011 magnitude-9 quake in Japan, when phone lines were tied up, according to Fast Company.
After the offering, Naver’s ownership dropped to 80.8%.
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The sizzling dual-listing suggested investors are betting Line can hold its own in a field crowded with mobile messaging services such as Facebook Messenger, WeChat and WhatsApp.
