Thursday, 11 August 2016
Line, Messaging App Maker, Makes Year’s Biggest Tech I.P.O.
The Line Corporation, which makes a messaging application with more than 200 million monthly active users across Japan and other Asian countries, has made the largest technology initial public offering so far this year.
On Monday, the Japanese company priced 35 million shares for $32.84 each, for a total offering size of $1.15 billion, according to a statement by Line. Of those shares, 22 million represented American depositary shares for an international offering, while 13 million were sold in Japan. The shares are expected to start trading in New York on Thursday and in Tokyo the next day. At the initial public offering price, Line is valued at almost $7 billion.
In a year of few tech public offerings, Line’s stands out. After receiving stronger-than-expected demand from investors, Line raised its price range last week. Then, on Monday, it priced at the high end of that range — only the third tech company to debut above its original range this year, according to Dealogic.
The demand for Line’s shares was particularly surprising, given the recent market turmoil after Britain’s June 23 vote to exit the European Union. The news caused Line to postpone its initial public offering.
But Line, as a company, was founded on the premise of resilience. The Naver Corporation, a Korean internet giant, developed the Line messaging app to help people communicate after the Japanese earthquake and subsequent tsunami five years ago. Line’s app allows users to chat through messaging, voice and video calls — all free. The name Line was meant to symbolize “connecting the dots.”
Soon thereafter, Line developed what it called “stickers,” which are similar to emojis, but use animation and sound to communicate through the chat application. Line developed stickers with its own characters like a cartoonlike bunny and bear, and also forms partnerships with other brands, like one with Disney to create Mickey Mouse stickers. Line sells these stickers for about $1 to $2 for a set. Its users sent an average of 389 million stickers a day in March 2016, according to the public offering prospectus.
That, along with sales from advertising and gaming, helped Line surpass $1 billion in revenue last year, a jump of about 40 percent from 2014. While a majority of that revenue came through sales in Japan, the company has been aiming to diversify across Asia, with users in Taiwan, Thailand and Indonesia.
Several years ago, Line became a subsidiary of Naver, which holds about 83 percent of Line’s outstanding shares post-offering.
Morgan Stanley, Nomura, Goldman Sachs and JPMorgan Chase managed the offering. Line’s American depositary shares will be listed on the New York Stock Exchange under the symbol LN, and its domestic shares will be listed on the Tokyo Stock Exchange under the symbol 3938.
Correction: July 13, 2016
An article on Tuesday about an initial public offering by the Line Corporation, a Japanese company that developed a popular messaging app, misstated, in some copies, the metric used to measure the number of users of Line’s app. It is monthly active users, not monthly average users. The error was repeated in an accompanying picture caption.
By LESLIE PICKER
http://www.nytimes.com/
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