Line on the Rise in U.S. Debut of Biggest Tech IPO of the Year

Japanese Messaging Company Raised More Than $1 Billion

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Line Corp. rose in its U.S. trading debut after the Japanese messaging company raised more than $1 billion in the biggest technology initial public offering of the year.

Shares rose to $40.80 as of 11:41 a.m. in New York, after climbing to as much as $44.49 in earlier trading. That values the company at about $8.6 billion. The stock was sold to investors in the IPO for $32.84 apiece.

Line, owned by South Korea's Naver, raised $1.3 billion after pricing its offering at the high end of an increased range. The company, which is listing shares in Japan and the U.S., will start trading in Tokyo on Friday. Line sold 35 million shares and said it will fully exercise a greenshoe option to sell an additional 5.25 million shares.

The company is selling about two-thirds of its stock in the U.S. Proceeds from the offering will be used to expand across Asia and, eventually, the U.S., according to the prospectus.

"We will be focusing on our four key markets: Japan, Taiwan, Thailand and Indonesia," Line's chief financial officer In-Joon Hwang said in a Bloomberg TV interview. "We will be using money for any investment opportunity to strengthen existing business."

Investors will be keen to look past the first few days of trading. Line will likely be measured going forward against fellow tech stocks Facebook and Twitter, for which user growth has been a key metric. Line, which has about 218 million users, said in its prospectus that the pace of user growth has slowed.

Despite market volatility and a surging yen triggered by the U.K.'s Brexit vote, Line raised its IPO price by 18% from an initial estimate and exercised an option to sell more stock. The company sold less than a fifth of its total shares in this week's offering.

Tokyo's influential day traders will be watching Line's open ahead of its debut in its home market on Friday, and could spark an early feeding frenzy for the shares. 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.

Line's sales grew 40% last year to 120.7 billion yen, with games, streaming music and comics accounting for 41% of that. But the company chalked up a net loss of 7.6 billion yen in the period, according to its IPO filing.

Nomura Holdings, JPMorgan Chase, Morgan Stanley and Goldman Sachs Group were the lead underwriters.

-- Bloomberg News

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