Line shares surge on gray market

Bloomberg

Thu, Jul 14, 2016 - Page 11

Line Corp shares are popular in the gray market ahead of this week’s trading debut, after the largest initial public offering (IPO) for a technology company so far this year.

Yesterday, investors were willing to buy shares for ¥3,800, 15 percent higher than its IPO price, Cantor Fitzgerald & Co said.

Offers to sell came in above ¥4,000, the brokerage said.

Singapore-based Churchill Capital Ltd sales trader Tom Leske said he was seeing bids at ¥3,900 versus offers at ¥4,200.

Line shares are to debut in a dual listing in the US today and in Tokyo tomorrow.

“We’ve seen several buyers immediately bid above the issue price,” said Howard Keum, Hong Kong-based managing director for Asia equity sales and trading at Cantor Fitzgerald. “Investors have been waiting for this IPO and have put in trying to get shares. We heard most got little or no allocations.”

Line, a Japanese mobile-messaging app provider backed by South Korea’s Naver Corp, raised US$1.3 billion after pricing its offering at the high end of an increased range. Line is selling 40.25 million shares for ¥3,300 apiece.

The Nikkei Shimbun yesterday reported that the IPO was almost 25 times oversubscribed.

Concerns over the timing of the listing, coming so soon after Britain’s Brexit vote roiled markets, are subsiding, as Japanese shares surge this week.

“Trying to get sellers in the gray is proving hard after the Japanese elections and the renewed Abenomics and stimulus hopes,” Leske said.

“With the market going up every day, there is no rush to sell,” he added.