Line Corporation, a Japanese messaging-app operator, is gearing up for a billion dollar IPO next month in Tokyo and New York.
The company, a rival to WhatsApp, has set its IPO offering at $26.50 to $31.50 (2,700 to 3,200 yen) per share. This would make it one of the largest tech IPOs of the year that has the potential to raise up to $1.09 billion ($112 billion yen).
As part of its IPO, Line will be offering 13 million shares in Japan on July 15, which would follow the 22 million shares in New York on July 14. There could be an additional 5.25 million shares, according to The Wall Street Journal, but that is only if there is exceptionally high demand.
As a result of this, Line could be worth $19.4 billion (around ¥129 billion). That would gives Line a valuation worth 20-24 times its earnings, according to a source who spoke with WSJ.
Masayuki Kubota, chief strategist at Rakuten Securities Economic Research Institute, said Line was expecting a strong IPO demand because of how popular the service is in Japan. He is, however, skeptical about its growth prospects.
“But from an analyst’s perspective, there are questions about its growth prospects. And in the U.S., where there are already similar services, it could face more difficulty generating demand in the long term, and the current turbulence in the markets won’t help,” he said.
Line told investors that its price range was based on its monetization abilities in Japan, Thailand and Taiwan, along with Indonesia, where the company is also seeing strong growth. Line also said investors should expect to see new services, which would add to overall growth. Line, which provides free voice calls and messaging, has 218 million monthly active users.