Line shares jump 27% in US debut of 2016's biggest technology IPO

NYSE president Tom Farley (right) accompanies Japan's Line Corp CFO In Joon Hwang (second, left) and Chief Global Officer Jungho Shin (middle) and Chief Strategy and Marketing Officer Jun Masuda (second, right) as they ring the opening bell to celebr
NYSE president Tom Farley (right) accompanies Japan's Line Corp CFO In Joon Hwang (second, left) and Chief Global Officer Jungho Shin (middle) and Chief Strategy and Marketing Officer Jun Masuda (second, right) as they ring the opening bell to celebrate the company's IPO at the NYSE in New York City, US, July 14.PHOTO: REUTERS

NEW YORK (BLOOMBERG) - Shares of Line Corp surged 27 per cent in its US trading debut on Thursday (July 14) after the Japanese messaging company raised more than US$1 billion in the biggest technology initial public offering of the year.

The shares, which were priced at US$32.84 each, climbed US$8.74 to US$41.58 at the close in New York, giving the company a market value of about US$8.7 billion.

Line, owned by South Korea's Naver Corp, raised US$1.3 billion after pricing its offering at the high end of an increased range. The company, which is listing shares in Japan and the US, will start trading in Tokyo on Friday.

Line sold 35 million shares and said it will fully exercise a greenshoe option to sell an additional 5.25 million shares. About 28.9 million shares changed hands during the day's trading.

The company sold about two-thirds of its stock in the US Proceeds from the offering will be used to expand across Asia and, eventually, the US, according to the prospectus.

"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 be using money for any investment opportunity to strengthen existing business."

Investors will be keen to look past the first few days of trading. Line will likely be measured going forward against fellow tech stocks Facebook and Twitter, for which user growth has been a key metric. Line, which has about 218 million users, said in its prospectus that the pace of user growth has slowed.

Despite market volatility and a surging yen triggered by the UK's Brexit vote, Line raised its IPO price by 18 per cent from an initial estimate and exercised an option to sell more stock. The company sold less than a fifth of its total shares in this week's offering.

Tokyo's influential day traders will be watching Line's open ahead of its debut in its home market on Friday, and could spark an early feeding frenzy for the shares. The traders have a tendency to favor stocks popular with the general public, with retail investors drawn to the IPOs of companies whose services they use.

Line's sales grew 40 per cent last year to 120.7 billion yen, with games, streaming music and comics accounting for 41 percent of that. But the company chalked up a net loss of 7.6 billion yen in the period, according to its IPO filing.