Thursday, July 21, 2016

JAPAN'S MESSAGING APP LINE Makes Wall Street Debut With $1B In IPO

It was something of an uncommon event over at Wall Street this Thursday July 14 when Japanese messaging app company Line Corp. made its first appearance on the New York Stock Exchange with what is said to be the largest initial public offering made there by a tech firm. The move paid off rather magnificently with a respectable rise in shares, according to a report by CNNWith an opening of $42 a share, Line quickly made up to 33 percent in its very first day of trade, made eventful by executives ringing the opening bell at the trading floor while accompanied by mascots representing some of the numerous virtual stickers available to spice up messaging in the Line app. With an additional 50 percent gotten from Friday morning trading at the Tokyo Stock Exchange (3,300 yen per share), Line Corp raised a total of $1.3 billion, with a current market value of $8 billion. All in all, it was expected of a messaging app tech company making annual sales amounting up to $250 million.

The outfit originally planned to make their IPO two years ago in 2014, but pulled out at the last minute. Now Wall Street is in the mood for gobbling up IPOs from tech firms so not only was Line Corp’s entrance long overdue, but very fortuitous on their part. It is the fifth tech company this year to show up on the stock exchange.

Investors going with Line do so seeing the same appeal in the Japanese messaging app as in other stalwarts of social networking like Facebook and Twitter: having an immense number of dedicated users of these services that could also be enticed to spend through ads, transactions and virtual stuff, to the companies’ profit.

Jeffries analyst Atul Goyal notes the similarities between Line and Facebook, as well as other social networking names like China’s Tencent and Korea’s Kakao, in that they have a sort of near monopoly of their platforms in each of their respective regions – Line in Japan and FB in the West. Line Corp chief global officer Jung-ho Shin remarks how their service has since its inception become a one- stop shop where the smartphone generation can pretty much do anything they want online. He also sees a grander future for Line that transcends its original messaging platform, and hopes the brand becomes popular in other geographical regions as well.

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