One of the most famous mobile messaging apps in Asia just went public today in the U.S., as LINE Corporation (LINE) debuted itself as a public company on the NYSE under ticker symbol ‘LN’ following a successful initial public offering (IPO) this morning in New York that helped it raise over $1 billion and become the largest tech IPO to date in 2016.
From the 35 million shares that LINE placed in the public market (excluding an over-allotment that was also subscribed to), 22 million shares went into its US listing, and the other 13 million were placed in Japan, initially at $32.84 per share – helping it raise nearly $1.15 billion and giving it a valuation of over $7 billion before its stock opened at $42.00 pushing its valuation even higher as its price surged up nearly 30%.
Finance Magnates reported on LINE’s expected IPO in a related article that eyed this year’s biggest tech IPO, and after mature fintech companies including CMC Markets completed its IPO for nearly $1 billion in the UK earlier this year followed by XTB brokers in Poland in May.
— NYSE (@NYSE) July 14, 2016
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LINE is a Japanese-subsidiary of the Korean search giant Naver, and continues to pick up user growth in a number of regions across the globe as its messaging app is adopted, with the majority of its user-base concentrated in its home market in Japan, and other regions of Asia including Thailand, Indonesia, and other ASEAN countries.
Dual listing in Tokyo
Line made a filing with the SEC that it has listed its American Depositary Shares (ADS) issued under the level 3 sponsored American Depositary Receipt (ADR) program, as the company is also now dually listed in Japan on the Tokyo Stock Exchange under ticker 3938.
The company has already monetized its app quite well with revenues from advertisements as well as from selling its emoji-style dynamic characters – also known as stickers – which users can purchase premium versions in addition to the free ones provided in the app by default.
For anyone that has used LINE, these emoji characters appear below words that are typed – allowing users to choose a visual emoji to match the word being type and swap the word for the picture (i.e. typing ‘smiley’ could cause a ‘ 🙂 ‘ face to appear that could replace the word with the icon when tapped).
User growth and fintech appeal
Founded in 2000, and with 2,537 employees currently, LINE is on the cusp of exponential user growth with 250 million users globally, yet its latest net profit on an EPS basis was ($0.33) cents per share, despite climbing revenues which reached nearly $1.25 billion for 2015 (after converting from JPY) as the company pursues expansion.
The app has become so popular in places such as Thailand, that when people meet for the first time, swapping LINE IDs can be akin to asking for a number. In addition to the LINE user name, a user can be added via phone number (like Whatsapp) and the app even features a QR code that can be scanned to add another contact.
For financial services and fintech companie, widely used messaging platforms with social-like features including Skype, Whatsapp, Snapchat, Facebook, Twitter and WeChat, can be used as a means to reach a large number of customers whether via marketing or integrating 3rd party apps.
As convergences continue between industries thanks to fintech solutions that enable a cross-over between previously unconnected mediums, messaging apps may become a prominent channel for trading platforms and related products beyond just messaging in the future.