Line CEO Takeshi Idezawa (left).
It’s hot, humid, and full-blown summer time in Japan right now as messaging app Line set its initial IPO price at US$32.80 per share.
The market turmoil caused by all the hubbub in the UK seemed to have little effect on what could be the largest tech IPO of the year. Last week Line updated its estimated offering range to be between 2,900 yen and 3,300 yen. Today, by setting the top range and grabbing a few more dollars from everyone, Line raised its value by US$1.4 billion to US$6.9 billion.
In a rare dual listing on both the Tokyo and New York stock exchanges, Line will sell 35 million new shares on July 15 (July 14 in the US). Another 5.25 million shares will be offered in a “greenshoe” option, officially known as an over-allotment option used to stabilize stock prices during an IPO.
Line will need every penny of the US$1.3 billion it plans to raise in order to battle rivals like WhatsApp. The Facebook-owned messenger has been destroying its Asian rival and passed one billion users earlier this year. That’s more than double the number when Mark Zuckerberg bought it two years ago for a record US$22 billion (or US$55 per user).
Meanwhile, Line only added a meager 10 million monthly active users last year for a total of 218 million – the majority of which are in Japan, Taiwan, Thailand, and Indonesia. Based on a new market price that means Line users are valued at US$32 a pop.
Line at 5 years old (Infographic)
Don’t underestimate Line though. It did reach 50 million users in one year, which is more than three time faster than Twitter and Facebook. This year it launched a plethora of new services from SIM cards, to prepaid debit cards and delivery services in an effort to better monetize its existing users.
With over US$1 billion in revenue in 2015, Line was App Annie’s number one publisher outside of games for the third year in a row. The top range of US$32.80 means demand is high and investors will be looking forward to Line’s public debut this Friday in Tokyo.
Converted from Japanese Yen. Rate: US$1 = JPY 100.69
Editing by Nadine Freischlad and Malavika Velayanikal
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