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Messaging app Line skyrockets in Tokyo trading debut

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Messaging app Line rocketed in its Tokyo trading debut Friday after an eye-popping jump in New York, as investors cheered the year’s biggest technology share sale.

The newly listed stock closed at 4,345 yen (£30.67), up 32 percent from its initial public offering price of 3,300 yen, and valuing the firm at around $8.6 billion (£6.43 billion).

The surge followed Japan-based Line new shares roaring to life in New York, where they kicked off trading Thursday after the $1.3 billion (£0.97 billion) IPO.

The blazing dual-listing suggested investors are betting Line can hold its own in a field crowded with mobile messaging services such as Facebook Messenger, WeChat and WhatsApp.

Hideki Yasuda, an analyst at Ace Research Institute in Tokyo, said, “Investors are giving Line high marks for its growth potential and the IPO should boost its name recognition”.

“But Line already has a big number of users and I think it will be tough for them to increase that.

“What investors are focused on now is what Line will do with that large number of users to expand its growth through advertising revenue, for example.”

Line, which is owned by South Korea’s Naver Corp., debuted overnight in New York where its stock soared about 27 per cent by the close.

Line sold 35 million shares in all, out of which about two thirds in the United States. It said that it would exercise an option to sell another five million shares, underscoring strong demand for the offering.

Line’s service lets users make free calls, send instant messages and post photos or short videos, along with a world of other paid services.

It combines attributes from Facebook, Skype and WhatsApp with games and a mobile payment service also on offer.

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Paul

The author Paul