This public offering is expected to be the largest tech listing this year and its shares will trade on both the New York and Tokyo stock exchanges
Japanese Internet communications platform Line Corporation will, perhaps, go down in the history as one of the finest examples of a lucrative business venture borne out of a tragedy. Developed in the wake of the catastrophic 2011 Japan earthquake disaster to counteract disrupted telecommunications, Line became an instant hit with users, growing from 100 million users within eighteen months to 218 million now.
Now, it has hit yet another coveted jackpot: IPO — and very likely the largest tech listing this year. Unfazed by ripples in the market set off by Brexit, the Naver Corp-owned messaging platform will start trading 35 million shares at JPY3,300 (US$32.40) per piece. It will also sell an additional 5.25 million shares through a clause called greenshoe. This means underwriters can purchase up to an extra 15 per cent of Line’s shares at the initial offering price (this is done so Line can stabilise their initial share price).
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According to Bloomberg, Nomura Holdings Inc., JPMorgan Chase & Co., Morgan Stanley and Goldman Sachs Group Inc. will be the lead underwriters.
With the IPO, Line is expected to raise a whopping US$1.3 billion at a valuation of US$6.9 billion. The shares will be traded on both the New York and Tokyo stock exchanges. It will begin trading on the former on July 14 and the latter on July 15.
The fresh injection of funds will provide Line the means to ramp up its conquest beyond regional core markets Japan, Thailand, Indonesia and Taiwan and into Spain, Chile, India and the US, and compete against other major messaging apps such as WeChat, WhatsApp and Facebook Messenger.
Line monetises through a list of services and add-ons including emojis, gaming, taxi hailing, food delivery and music streaming. Last year, it raked a total revenue of JPY120.7 billion (US$1.18 billion). While the figures may seem optimistic for Line, Bloomberg reported that in the same period, Line experienced a net loss of JPY7.6 billion (US$74.5 million).
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