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Line Jumps in Debut of 2016s Biggest Technology IPO


Line Corp. surged more than 48 percent in its Japan trading debut after the messaging company raised more than $1 billion in the biggest technology initial public offering of the year.

The shares opened at 4,900 yen in Tokyo trade, compared with its IPO price of 3,300 yen, giving it a valuation of about 1 trillion yen ($9.5 billion). The stock, which was priced at $32.84 each in the U.S., climbed 27 percent to $41.58 at the close in New York.

Line, owned by South Koreas Naver Corp., raised $1.3 billion after pricing its offering at the high end of an increased range. The company, which is listing shares in Japan and the U.S., will start trading in Tokyo on Friday.

Line sold 35 million shares and said it will fully exercise a greenshoe option to sell an additional 5.25 million shares. About 28.9 million shares changed hands during the days trading.

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The company sold about two-thirds of its stock in the U.S. Proceeds from the offering will be used to expand across Asia and, eventually, the U.S., according to the prospectus.

We will be focusing on our four key markets: Japan, Taiwan, Thailand and Indonesia, Lines chief financial officer In-Joon Hwang said in a Bloomberg TV interview. We will be using money for any investment opportunity to strengthen existing business.

For a graphic explaining Lines ecosystem and growth, click here.

Investors will be keen to look past the first few days of trading. Line will likely be measured going forward against fellow tech stocks Facebook Inc. and Twitter Inc., for which user growth has been a key metric. Line, which has about 218 million users, said in its prospectus that the pace of user growth has slowed.

Despite market volatility and a surging yen triggered by the U.K.s Brexit vote, Line raised its IPO price by 18 percent from an initial estimate and exercised an option to sell more stock. The company sold less than a fifth of its total shares in this weeks offering.

Tokyos influential day traders will be watching Lines open ahead of its debut in its home market on Friday, and could spark an early feeding frenzy for the shares. The traders have a tendency to favor stocks popular with the general public, with retail investors drawn to the IPOs of companies whose services they use.

Lines sales grew 40 percent last year to 120.7 billion yen, with games, streaming music and comics accounting for 41 percent of that. But the company chalked up a net loss of 7.6 billion yen in the period, according to its IPO filing.

Nomura Holdings Inc., JPMorgan Chase & Co., Morgan Stanley and Goldman Sachs Group Inc. were the lead underwriters.

Read more: http://www.bloomberg.com/news/articles/2016-07-15/line-jumps-in-debut-of-2016-s-biggest-technology-ipo