A bull statue in front of the Korea Financial Investment Association headquarters in Seoul. (Herald DB)
The race to bid for unlisted companies‘ next initial public offering bonanza among South Korean investors is intensifying, data showed March 14, as the recent high-profile deals including Coupang’s $4.6 billion US IPO whet investor appetite.
Krafton, which develops and publishes battle royale game PlayerUnknown’s Battlegrounds, saw its trading price spike on over-the-counter platforms here.
The game developer is the country’s largest unicorn -- a term used to describe a new, unlisted company with more than $1 billion valuation. Like other privately held companies, a unicorn‘s shares are often traded on OTC platforms.
According to U-Stockplus operated by fintech company Dunamu, shares of Krafton were trading as high as 1.85 million won ($1,630) apiece on Saturday, up 10.1 percent from 1.68 million won as of end-2020. Another OTC platform, Seoul Exchange, had Krafton shares trading at 1.84 million won each, up 11.5 percent from end-2020.
The trading price indicates that investor’s estimate Krafton’s total valuation at some 14.6 trillion won, more than double that of its latest $5 billion valuation.
Likewise, accommodation booking app Yanolja‘s share price upsurge on OTC platforms indicates investors’ keen attention toward its IPO attempt.
Yanolja saw its stock price jump to 67,500 won, 2.5 times higher than end-2020 on Dumanu‘s U-Stockplus. On Seoul Exchange, Yanolja’s price skyrocketed more than sixfold to 80,000 won during the same period.
Krafton and Yanolja, out of 10 unicorns as of March, are seen as strong candidates for IPOs this year. Their success in IPOs will translate into a loss of their unicorn status, as they will then no longer be privately owned.
This comes as Coupang, Korea‘s e-commerce giant, exited from the unicorn list as the company made stellar debut on New York Stock Exchange Thursday, with its market cap exceeding $84 billion on its first trading day.
Moreover, vaccine manufacturer SK Bioscience -- one of the most actively traded stocks on the OTC platforms before its market debut -- hit the IPO jackpot. SK Bioscience has fetched 1.5 trillion won in the IPO that wrapped up Wednesday, drawing bids from retail investors worth some 64 trillion won.
As Korea saw three high-profile unicorn exits since last year, more unicorn exits are likely to follow.
Alongside Coupang‘s blockbuster IPO, social networking unicorn Hyperconnect in February was proposed to be acquired for $1.73 billion by global dating powerhouse Match Group, which operates Tinder and Hinge. Also, German food delivery giant Delivery Hero’s proposed takeover of Korean unicorn Baemin gained a conditional watchdog approval in December.
As of March, Korea is home to 10 unicorns -- Krafton, Yello Mobile, Viva Republica, WeMakePrice, Musinsa, GP Club, L&P Cosmetics, Aprogen, Yanolja and Socar -- according to the latest data by CB Insights.
By Son Ji-hyoung (firstname.lastname@example.org)