Japanese chat app Line soars in NY debut

Fresh from a positive listing in NY on Thursday, messaging company Line saw its share price jump as high as 50 percent after it listed on the Tokyo Stock Exchange in its native Japan.

The shares first traded in the Tokyo Stock Exchange at JPY 4,900, or 48.5 percent above their IPO price of JPY 3,300, helped by demand from investors hungry for a rare chance to invest in a tech startup.

The company raised $1.3 billion from selling shares on the stock market in NY and in Tokyo, which followed its USA success with a 50% pop at the open, before settling up 32% at market close.

A fund manager at a Japanese asset management firm said, "Considering that Line is little known in the United States, the IPO seems to be a success".

Line, owned by South Korea's Naver Corp, raised $US1.3 billion after pricing its offering at the high end of an increased range. Trading in Tokyo will begin Friday.

Line said it would use proceeds of the stock offering to help it expand in Asia, and tap the U.S. and European markets where it is not yet a major player.

"This is a very exciting company, it's the largest mobile application company in Japan, over 220 million monthly users, so part of their strategy is they're trying to expand internationally and they're moving beyond just the messaging piece of it, so by listing in the USA and the NYSE we're giving them access to a new investor", Garvis Toler, NYSE Global Head of Capital Markets said. "We will be using money for any investment opportunity to strengthen existing business".

The company offered 22 million shares on the NYSE as American depositary shares, and 13 million shares on the Tokyo stock exchange.

Investors will be keen to look past the first few days of trading.

The company counts about 218 million active monthly users - notably fewer than its bigger rivals - and is strongest in Taiwan, Japan, Thailand and Indonesia, but has relatively little presence in the U.S. and Europe. By comparison, Facebook Messenger has more than 900 million monthly active users, while popular Chinese messenger WeChat has more than 700 million and WhatsApp boasts 1 billion.

Line's users are mainly in Japan, Taiwan, Thailand and Indonesia.

The debut was part two of a dual stock offering for the company. As of 12:45 p.m., the Line stock price was trading at $41.72 a share. The traders have a tendency to favor stocks popular with the general public, with retail investors drawn to the IPOs of companies whose services they use. Analysts think the Line deal could stoke growing interest in newly sold shares in young companies, a market that has been moribund all year. But it reported a net loss of 7.97 billion yen, compared with profit of 2 billion yen in 2014.

Morgan Stanley, Goldman Sachs, JP Morgan and Nomura are among the underwriters to the IPO.

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