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Published: Sat, July 16, 2016
Economy | By Melissa Porter

Messaging app Line jumps in stock market debut


Priced at the high end of its original estimates amid heavy demand, Japan-based Line raised about $1.3bn in the share flotation with plans to trade both on the New York Stock Exchange, under the ticker sign "LN", and the Tokyo Stock Exchange.

It also did well in the US, rising by 26.6% in its NY trading debut to close at $41.58 on Thursday, July 14.

Shares of Japanese messaging app Line have surged by 50% in its Tokyo trading debut, making it the biggest technology listing of the year, BBC News reports.

Line, which offers a popular mobile message and online voice-call service, rose Friday above its IPO price of 3,300 yen, settling at 4,345 yen. Line sold 35 million shares and also exercised a greenshoe option to sell an additional 5.25 million.

"Whether Line can expand beyond its core market is key". About 28.9 million shares changed hands during the day's trading.

For the average American, the Japan-based, South Korean-owned social networking firm, with its catchy themes and cute mascots, remains much of a mystery for investors on Wall Street, Line is the biggest tech stock to hit the market this year.

The app has 218 million monthly active users, with over 68 million users registered in Japan, its biggest market, as of June.

Line's IPO on the NYSE follows the recent listing of Twilio (NYSE: TWLO), the first USA venture-backed tech IPO of 2016, and the one pf previous years of tech leaders such as Twitter, Alibaba, Pure Storage, and Square.

"The biggest difficulty is that foreign IT giants possess huge capital which they can use to invest in a wide range industries, while we have significantly less capital to work with and must carefully decide where to focus our investments", he said. Line said it would use proceeds of the stock offering to help it expand in Asia, and tap the USA and European markets where it is not yet a major player.

The surge followed Japan-based Line new shares roaring to life in NY, where they kicked off trading Thursday after the US$1.3 billion IPO. 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. Total revenue in 2015 was $1.1 billion. But the company chalked up a net loss of 7.6 billion yen in the period, according to its IPO filing.

Morgan Stanley, Goldman Sachs, JP Morgan and Nomura are among the underwriters to the IPO.

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