Updated August 10th, 2021 at 21:57 IST

PUBG-maker Krafton's shares fall 20% in Korean Stock Exchange debut, check details here

Shares in Krafton Inc, the South Korean company behind developing the hit video game (PUBG), plunged as much as 20% on their trading debut on August 10.

Reported by: Aanchal Nigam
IMAGE CREDIT: Unsplash | Image:self
Advertisement

Shares in Krafton Inc, the Tencent Holdings-backed South Korean company behind developing the hit video game "PlayerUnknown's Battlegrounds" (PUBG), plunged as much as 20% on their trading debut on August 10. As per a Bloomberg report, the fall came after pulling off a $3.8 billion initial public offering that was also South Korea’s biggest in more than a decade. The shares in Krafton Inc witnessed the fall before closing 8.8% down and becoming the first stock on the KOSPI mainboard to drop on debut this year. 

The Tencent Holdings Ltd-backed company cut its offering by over 1 trillion won or $870 million, reportedly, after the regulators posed questions over its valuation. Krafton Inc is now tackling concerns over its dependence on the blockbuster video game PUBG for almost all revenue and strengthening scrutiny over the Chinese gaming sector. Krafton’s share market debut was reportedly the second largest in the country after Samsung Life Insurance Co.’s $4.3 billion listing in 2010. As per the report, it has joined the list of tech companies and startups going public in an IPO boom which is further reorganising the corporate landscape of nations across the globe.

Ended on Tuesday with a valuation of 22 trillion won

Shares in Krafton INc ended on Tuesday with a valuation of  22 trillion won or $19.3 billion surpassing the more established names in the industry such as Nexon Co. and Take-Two Interactive Software Inc. As per the report, its size ended up causing some disappointment among the investors and Krafton underperformed recent debutantes. Meanwhile, shares of KakaoBank Corp., South Korea’s first internet-only lender, spiked 79% on its debut last week and exceeded the valuations of the country’s other traditional financial groups. 

As per the report, Choi Jongkyung, an analyst at Heungkuk Securities Co. said “the size of the share float was too big” noting that Krafton’s IPO was over 1.5 times bigger than of KakoBank. He added, “There was also bad news from China during Krafton’s IPO share subscription.” As per Bloomberg’s Billionaires Index, founder Chang Byung-gyu’s 14% stake in Krafton had been valued at 3.5 trillion won on the basis of IPO price.

Image Credit: Unsplash

Advertisement

Published August 10th, 2021 at 21:57 IST