In largest tech IPO, Line jumps 30% in market debut

In largest tech IPO, Line jumps 30% in market debut

LN, +26.61% a Japanese messaging app, rose more than 26% in their first day of trading after the company opened well above its $32.84 issue price.

Driven by high investor demand, Line shares on the Tokyo Stock Exchange closed at 4,345 yen ($41) on Friday, up 32 percent from its initial offering price of 3,300 yen, giving the company a market valuation of about 900 billion yen ($8.5 billion).

The shares roared to 5,000 yen (S$63.7) in early trading, up from the 3,300 yen IPO price and valuing the firm at almost $10 billion (S$13.4 billion), after going untraded at the open as buy orders swamped sell orders. It's slated to begin trading in NY on Thursday and in Toyko on Friday in the largest public offering of any tech company this year.

With 218 monthly active users (MAUs) in March, Line was recently the seventh-biggest messenger app in the world.

Line posted a revenue of 120.4 billion yen in 2015, or $1.1 billion, up from 86.7 billion yen in 2014 and 39.6 billion yen in 2013.

Line secured more ammunition to expand its business to the USA and other new markets. The company, which is listing shares in Japan and the USA, will start trading in Tokyo today.

Line is the fifth tech company to go public this year.

"Whether Line can expand beyond its core market is key". That means any early investor who owned Line stock has seen a return of 27% in just over three hours of trading.

He said the company is focused on something he called "culturalization", a process by which Line will develop services and features tailored to users' needs in individual markets, a move that Line hopes will help give it an advantage over rivals like Facebook.

For the average American, the Japan-based, South Korean-owned social networking firm, with its catchy themes and cute mascots, remains much of a mystery for investors on Wall Street, Line is the biggest tech stock to hit the market this year.

Line is the operator of a Japanese messaging app that's popular in Thailand, Indonesia, Taiwan and Japan. In Japan, people use it for more than just messaging, such as playing games, averaging almost 43 minutes a day on the app.

Line competes with other mobile messaging service providers, such as WhatsApp and Messenger from Facebook (FB) andWeChat from Tencent Holdings (TCEHY).

As analyst Jack Kent points out, "For many tech companies, there is a shift from growth driven by user acquisition to a more pressing need to monetize and drive profitability". The company can also move into increasingly important services like e-commerce and customer service interfaces, a move that others, including Facebook's Messenger, has already moved into.

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