Line Corp on Friday said it plans to list shares in Tokyo and New York next month through an initial public offering (IPO) that would value the Japanese messaging app operator at 588 billion yen ($5.50 billion). Tokyo-headquartered Line said it could raise as much as 112.7 billion yen, making the IPO Japan's biggest of the year.
The company, owned by South Korea's Naver Corp, plans to use the proceeds for expansion at home and abroad, at a time when growth in user numbers has markedly slowed. "Line is well-recognised so its shares will be popular," said equity strategist Mitsuo Shimizu at Japan Asia Securities Group. "But as a company, it has passed its peak and is not going to grow fast from now."
Line's listing marks the next phase for a company whose fortunes changed after a devastating earthquake and tsunami in March 2011. The chaotic aftermath of the disaster prompted the company to launch messaging app NHN Japan to aid communication. The years since saw it rebrand in 2013 and expand into 230 markets. Its free-of-charge app generates revenue through sales of electronic stickers and tokens for in-app games, as well as services such as music streaming and taxi hailing.
But while the IPO proceeds could help bolster an international push, the Line app is eclipsed in major Western markets by Facebook Inc's Messenger and Whatsapp, while China is dominated by Tencent Holdings Ltd's WeChat. Moreover, growth in its number of monthly active users has tapered having tripled over the past three years. Last year, users numbers rose just 13 million to 218 million at the end of March, the IPO filing showed.