South Korean mobile payments app Kakao Pay soared out of the starting gate, more than doubling in its first day of trading on the Seoul stock market exchange, according to published reports.
Kakao Pay shares escalated 150% in early trading Wednesday (Nov. 3), moving up from an initial public offering (IPO) priced at 90,000 won (about $76), Bloomberg reported. Backed by Jack Ma’s Ant Group, the startup raised 1.53 trillion won (about $1.3 billion) before trading, which gave Kakao a market capitalization of more than 11.7 trillion won.
The pandemic helped fuel Kakao Pay’s sales to 284 billion won (about $241 million) last year. Operating profit in the first half of 2021 was 2.6 billion won (about $2.2 million), according to Bloomberg.
Shares of Kakao Pay closed Wednesday at 193,000 won (about $164), Reuters reported. Kakao Pay’s debut is the best the main Korean index has seen since September when Iljin Hysolus Co. went up 160%.
Kakao Pay initially kicked its IPO ahead a few months and lowered its targeted IPO size after government officials demanded that its prospectus be revised, according to Bloomberg. Further mandates forced Kakao Pay to postpone its public listing after that.
IPOs in Korea have surged to record highs in 2021, per Bloomberg, but the escalation is making a U-turn as government officials there turn the spotlight on new listings.
“The red-hot IPO demand may have peaked sometime earlier, but the market is still very friendly to platform business IPOs,” Sung Jong-hwa, an analyst at eBest Investment and Securities, told Reuters. “Kakao Pay’s solid debut is proof and dispels concerns about regulatory issues. Among platform businesses, content and mobility listings will likely follow FinTech next year.”