Japan's Line Corp (3938.T) (LN.N) saw its shares rocket on their Tokyo debut on Friday, extending a strong start in NY the day before, and taking the value of the messaging app firm to $8.6 billion in the year's biggest tech IPO.
There are some concerns behind the growth of the company, as in its IPO filing the company notes that there has been a significant decrease in usage outside its four main countries.
The Asian Internet company began trading after its initial public offering raised $1.1 billion in gross proceeds, the third US IPO to raise over $1 billion.
With such a successful debut in the Stock Exchange, though, it's clearly the next big messaging app to keep an eye on.
In early trade the shares rocketed to $43.70 (1,530 baht, or 4,620 yen), on the New York Stock Exchange, compared with the initial public offering price of $31.20 (1,093 baht, 3,300 yen) early Thursday New York time (Friday, Thailand time). Line sells thousands of emojis and animations featuring its own characters, and users send hundreds of millions a day.
There will be a party in Times Square to celebrate the NYSE listing, according to a Line blog post. The company sold less than a fifth of its total shares in this week's offering. Line acts as a tool to call and message friends, a news and entertainment platform, a gaming studio, and a music streaming service.
Line is one of several massively popular messaging apps that many Americans have likely never heard of.
Line has about 218 million monthly active users and is famous for selling cute virtual stickers, games and various merchandise.
In the medium term, once the communication infrastructure in developing countries improves and users can better appreciate Line's services, the company could renew its push in other markets, Mr. Idezawa said.
Line is an attractive investment prospect in the sense that it already has a large dedicated user base from whom it's able to make money in many different ways. It will also invest in becoming a smartphone portal-offering both online and offline services-while working on new technologies like artificial intelligence, he said.
The company has also opened retail stores, delivered groceries, and sold digital stickers worth hundreds of millions of dollars.
Analysts say that will depend on how it manages to win over markets and the type of new businesses it acquires. Line eventually became a unit of the company and reached 50 million users in just over one year, according to Reuters.
As it looks to expand against larger overseas rivals, Line will be extremely hard-pressed to maintain that expense trajectory, which could crimp near-term profits.