Japan’s Line Corp has set itself up to be the biggest IPO in the tech sector so far in 2016 as the price range set for the messaging app operator could value the company at well over six billion dollars.
Beijing, China, July 16, 2016 — The valuation reflects the Korean owned company’s solid demand and shows the firm have turned from a reasonably wise investment into a rapidly growing start-up.
The range of 2,800 to 3,300 yen is seen by many as cautious, but even that range could see Line raise over a billion dollars from the sale of up to forty million shares.
The timing for Line’s statement to the press regarding the IPO was mildly surprising considering the state of the global markets as it attempts to recover from losses and a sentiment of general uncertainty following Britain’s vote to leave the E.U. on Friday.
The company refused to delay any longer, however, as its bullish pricing yesterday defied the expected cautious outlook that many investors thought would prevail and force many firms to suspend their IPO strategies.
Investors seem enthusiastic towards the top end of the IPO range as they will feel it gives them the best opportunity to gain reliable returns at a good value in its most important marketplaces in Asia like Japan and Thailand.
Nonetheless, many local investors and fund managers were put off by the pitch saying that although it might suit this short time of uncertainty, Line would have been better off listing the company at the period when its growth was most rapid.
Line took off as a cobbled together communication tool used after the tsunami of 2011 but has grown to be the dominant messaging app of choice in the Japanese marketplace.
The situation remains though, that many in the retail sector and international speculators alike are looking to buy in to the IPO, according to certain insiders.
“I wouldn’t say it has been difficult for Line to attract investors,” said Michael Lane, Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management who manage over a billion dollars of funds in the region. “The kinds of firm who want to improve their short-term profit strategies are jumping on this,” he added.
Line has hired a who’s who of financial brokers, including JP Morgan and Goldman Sachs, to handle the listing and will go public first in New York on the 14th July and then in Tokyo the day after.
Shizuoka Capital Wealth Management