Messaging app Line confirms IPO, aiming at $5.5b valuation

Strike up the band and pop the champagne. It’s finally happening. Messaging app Line has officially kicked off its IPO run today.

Line turns five this month, and who could ask for a better birthday present? According to documents on Financial Services Agency Line’s IPO is scheduled for July 15 (July 14 in the US) and is looking to raise US$917 million with an initial share price of US$26.21.

Japan-based Line plans to dual list on the Tokyo stock exchange and New York. At this time the section of both exchanges is still undecided. It could quite possibly be the largest tech IPO of the year. Including all unexecuted stock options, Line’s private valuation could be as high as US$6.17 billion. By just looking at the near 175 million shares of outstanding common stock and 35 million shares to be newly issued, Line’s public market capitalization is estimated to be US$5.49 billion. 22 million of the new shares are expected to be offered in New York.

Line currently has 218.4 million active users but lately its growth has been slow. It only added 13 million new MAUs in the past year compared to WhatsApp and Facebook Messenger’s hundreds of millions.

From the outside it appears to be a cash making machine though. For the third year in a row, Line claimed App Annie’s top grossing app publisher outside of games, posting over US$1 billion in revenue in 2015. The company has also been pushing new and open services like chat bots, deliveries, and prepaid cards to get more people using Line Pay (which is like Apple Pay), and a mobile internet service during the first half of 2016.

This is one of the most anticipated deals to come to the lackluster tech IPO market lately and investors are looking forward to the treasure trove of data that will come with the public offering.

Valuation calculation: 174,992,000 (outstanding common stock) + 35,000,000 (new shares to be issued) x 2,800 yen initial offer price

Update on June 10 2016, 5:30pm JST: We previously incorrectly gave the private valuation of US$6.17 billion which includes unexecuted stock options. The correct estimated market cap at the public offering is US$5.49 billion.

Converted from Japanese Yen. Rate: US$1 = JPY 106.81