TOKYO (AFP) – Messaging program Line rocketed in its Tokyo trading advent Friday after an eyepopping jump in New York, as investors cheered the year’s largest technology share deal.
The recently listed stock closed at 4,345 yen ($41), up 32 percent from its initial public offering price of 3,300 yen, and valuing the company at around $8.6 billion.
The upsurge followed Japan-based Line new shares roaring to life in New York, where they kicked off trading Thursday after the $1.3 billion IPO.
The sizzling double-listing implied investors are betting Line can hold its own in a field crowded with cellular messaging services like WhatsApp, WeChat and Facebook Messenger.
But the firm, which grew out of Japan’s 2011 quake-tsunami catastrophe, could face challenges improving its popularity beyond some Spanish language markets and Asia, analysts
“Investors are giving Line high marks for its growth potential and the IPO should foster its name recognition,” said Hideki Yasuda, an analyst at Ace Research Institute in Tokyo.
“But Line already has a large variety of users and I believe it’ll be rough for their sake to raise that.
“What investors are focused on now is what Line will do with that large variety of users to enlarge its increase through marketing sales, for instance.”
Line, which is possessed by South Korea’s Naver Corp., debuted immediately in New York where its stock soared about 27 percent by the close.
Line said it would exercise option underscoring strong demand for the offering — and sold 35 million shares in all — about two thirds in the United States.
Line’s service lets users send instant messages, make free calls and post pictures or short videos, together with a host of other paid services.
It combines and a mobile payment service additionally on offer and aspects from WhatsApp, Skype and Facebook.
But what’s set it apart so far is a tremendous variety of animation “decals”, which some overly-busy-to-text supporters rely on to convey — a sort of animated language.
Decals and stocks
The decals are extremely popular in Japan, particularly among adolescents, and Line has been competent to generate income off them.
“If someone shares some great news with me, I can send them a decal like ‘awe-inspiring!’ or instead ‘I ‘m depressed’ when something sad happens,” said Line devotee Akiko Mura before trading began Friday.
“You can express yourself not only in words but also in pictures.”
The firm counts about 218 million active monthly users fewer than its larger competitors — and is most powerful in Indonesia, Thailand, Taiwan and Japan, but has comparatively little existence in Europe and the US.
Line executives said net income from the share sale would be earmarked for developing in marketplaces where the service is most powerful.
“We will be focusing on our four key markets: Japan, Taiwan, Thailand and Indonesia,” Line’s chief financial officer In-Joon Hwang said in a Bloomberg TV interview.
“We will use cash for any investment opportunity to reinforce present company.”
Line’s messaging service established in 2011 after the quake-tsunami disaster damaged Japan’s telecoms infrastructure national, driving staff at Naver’s Japanese unit to use on-line resources to convey.
The messaging service was spun off as another company, based in Tokyo.
Line posted sales of 120 billion yen, up 40 percent from the year before, but reserved an entire loss, which it blamed on increasing staff costs and other expenses last year.