Japanese messaging service Line Inc. after minting over $1.1 billion of its fresh IPO, went live on both the New York and Tokyo stock exchanges on consecutive days.
The messaging company started trading under the symbol ‘LN’ on the NYSE yesterday. The stock prices immediately saw a 33 per cent surge in share price, reaching $42 in minutes as compared to the IPO price of $32.84. Over 30 million shares were traded on the day of the stock listing.
This was clearly one of the biggest IPOs to hit the market recently and people have been eagerly waiting for the same. Early signs also showed strong demand for Line shares, as grey market trades were up 15 percent as compared to the IPO price. The investors were all excited and clamoring for a larger piece of the pie, as the IPO went live on the market today.
Since the Line IPO was a dual offering, yesterday’s listing was followed by today’s bombastic listing on the Tokyo Stock Exchange. The share prices rose over 50 per cent and touched the 5,000 JPY mark as compared to the initial offer price of 3,300 JPY. The uprise started flat-lining by the end of the data and the share prices finally settled at 4,345 JPY on closing.
The IPO
Valued at $7 million, the messaging service has last week announced that it is planning to raise over $1.15 million from investors and is thus, pricing its IPO at the upper end of the range. A total of 35 million shares have been made available, including a mix of 22 million shares on the NYSE and 13 million shares on the Tokyo Stock Exchange.
Line had initially planned to go public at the Tokyo Stock Exchange two years ago in 2014 at a valuation of $9.8 billion as compared to the meager $5.5 million this time around. Analysts believe that the IPO had fallen through because of Nevar had stuck its foot out for a greater share in company voting rights(even though it owns a 100% of Line Corp), in order to avoid future take-over issues.
Line currently hosts over 218 million monthly active users on its messaging platform, of which over two-thirds of the people belong to major Asian cities, like Japan, Thailand, Taiwan and Indonesia. The revenues of the messaging app, however, were promising. The company reported $1 billion in revenues, but still posted a loss of $76 million for the year.
Since it was the biggest IPO wait a dual-listing agenda, thus the response was much better than expected.
Growth Strategy
Line Corp. makes most of its revenue using in-app sticker and advertisement sales, but it will now be looking to put the newly infused funds to good use by working on new revenue generation schemes. It will also work on expanding its flailing user base in comparison to other chat platforms, including Messenger, Whatsapp and WeChat.
It will also plans to build partnerships similar to the taxi service, and Mix Radio to leap frog its growth and joining the big boys of the messaging league, who are trying to change the way people communicate. And who knows, you might even see the rise of the chatbots on the platform in the near future.
The company has recently joined the likes of WhatsApp and WeChat to switch on end-to-end encryption on its platform by default.
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