Messaging app Line soars in market debut
New York (AFP) – Shares in the Asian hit messaging app Line surged 40 percent in opening trade in New York Thursday in a market hungry for the newest technology IPO.
The largest new tech stock on the market so far this year drew strong support as Wall Street overall pushed to new record levels.
But Line remains challenged to boost its popularity beyond East and Southeast Asia, and some Spanish language markets, amid a field crowded with innovative mobile messaging services like Facebook Messenger, WeChat, WhatsApp, Skype and Snapchat.
Founder and chief executive Jungho Chin told CNBC television Thursday that the company now dominates the Japanese market and that the IPO will boost its expansion.
“Ultimately we believe that this IPO will accelerate our growth,” he said.
In early trade the shares rocketed to $43.70, or 4,620 yen, on the New York Stock Exchange, compared with the initial public offering price of 3,300 yen, or $31.20 early Thursday.
Later they eased off to around $41.40 (4,376 yen), a gain of about 33 percent.
Priced at the high end of its original estimates amid heavy demand, Japan-based Line raised about $1.3 billion in the share flotation.
The shares will trade on the Tokyo Stock Exchange, and on the New York Stock Exchange as ADR depositary receipts under the ticker sign “LN”. Trading in Tokyo will begin Friday.
Known for its cute and innovative digital stickers, Line is hugely popular across much of East and Southeast Asia and is widely used in Spain and Mexico as well.
It counts about 218 million active monthly users, and is strongest in Japan, Thailand, Taiwan and Indonesia.
Owned by South Korean Internet provider Naver, the app combines attributes from Facebook, Skype and WhatsApp.
It lets users make free calls, send instant messages, and post photos or short videos, along with a host of other paid services. Games and a mobile payments function are also on offer.
It is best known for letting users send each other cute cartoon “stickers”, and is hugely popular among teenagers.
Line’s sells thousands of the stickers, many of them animated and noisy, from Hello Kitty and Super Mario to Manga and Disney characters.
One service allows users to create and sell their own characters, while Line’s homegrown stable of stickers include the duck Sally, a sad-face bear called Brown and Cony the rabbit.
“The stickers are so good at explaining how we feel,” Nanako, a 25-year-old tech industry worker from San Francisco, said at the retail store in Tokyo’s youth fashion district.
– ‘One-stop service’ –
Last year, Line posted revenue of 120 billion yen ($1.1 billion), up 40 percent from the year before, but a small overall loss, which it blamed on rising staff costs and other expenses.
Line said it would use proceeds of the stock offering to help it expand in Asia, and tap the US and European markets where it is not yet a major player.
It also said the funds could fuel takeovers of other services and apps.
Chin told CNBC that the company’s aim right now is to expand Line’s functionality rather than focus on building it in other countries.
“Every smartphone user needs a messaging service, music service, and a gaming service, and they want a one-stop service. If the users can serve their needs with this one-stop service we can satisfy customers,” Chin said.
“The short-term view will be to focus on expanding the domain, and not so much the geographical expansion.”