Line won't go public this year

By Bahk Eun-ji

Naver said Monday that its popular instant messaging app Line will not be listed on the Tokyo Stock Exchange this year.

The general market perception has been that Naver would have its Japan-based Line going public by the end of the year.

But the delay is expected to have no major impact on its share prices, analysts said Tuesday.

“We’ve concluded that this year is not an optimal time for the IPO. We left the door open to all possibilities,” Naver said in a statement.

It did not elaborate.

The company submitted an application for the IPO to the Tokyo Stock Exchange in July, raising market speculation that it would go public this year.

Naver said it was just part of business diversification plans and nothing had been decided.

Analysts said, however, Naver will eventually go public in a bid to stay competitive in the global market.

“It might be a natural step for Naver to list its shares as it has to raise enough funds. Naver’s market value is relatively smaller than Facebook and Tencent,” said Chung Jae-woo, a tech-analyst at Woori Investment and Securities.

Chung said the company’s decision would have little impact on Naver’s share prices even if the firm delayed the listing of its shares.

“There are only three months left this year. Although Naver said it hasn’t decided anything yet, it seems the company is looking for the right time to go public,” Chung said.

Hong Jong-gil, an analyst at Korea Investment and Securities, also said Naver’s announcement will have a neutral impact on share prices.

“Naver seems to have decided not to rush the IPO, considering its rapid growth in both sales and subscribers,” Hong said.

The decision seems to be aimed at focusing on expanding the business, Hong added.

“The goal of an IPO is to raise funds as well as brand recognition, so the delay will not have any major negative impact,” he said.

Line reported 183 billion won in sales in the second quarter, up 59.3 percent from a year earlier.

Naver closed up 5.57 percent or 44,000 won at 834,000 won. The KOSPI closed down 0.51 percent or 10.36 points at 2,028.91 points.