Krafton, gaming success story, files for massive IPO
In a filing Wednesday, Krafton registered to offer 10,060,230 shares at between 458,000 won and 557,000 won each. If the upper end of the range is hit, 5.6 trillion won ($5 billion) of stock will be sold.
That would be a record.
The current all-time high is Samsung Life Insurance’s 4.88-trillion-won sale in 2010. Coupang raised $4.6 billion earlier this year, though the listing was on the New York Stock Exchange.
SK IE Technology raised 2.2 trillion won in its offering, SK Bioscience 1.5 trillion won and HYBE, previously Big Hit Entertainment, 962.6 billion won.
A successful sale would leave Krafton with a 29-trillion-won market capitalization, almost as big as Posco.
Krafton will be the largest game maker in the country. NCsoft has a market cap of 18.6 trillion won, Netmarble 11.3 trillion won and Kakao Games 4.2 trillion won.
The offering price will be fixed and announced on July 12. Public subscriptions will take place for two days from July 14.
The lead arranger is Mirae Asset Securities, and co-arrangers are Credit Suisse, NH Investment & Securities, Citigroup Global Markets Korea Securities, and JPMorgan.
While the government prohibits retail investors from subscribing to publicly offered shares through more than one brokerage, that practice is still allowed for companies filing registration statements before June 18. This means that small investors will be able to place orders with many brokers.
The company is fast growing and increasingly profitable, especially with the success of PlayerUnknown's Battlegrounds, an online multiplayer battle royale game first introduced in 2017.
While Krafton reported a net loss of 879.5 billion won in 2017, it recorded 251 billion won in net profit the next year. In 2019, its net income expanded by 11 percent to 278.9 billion won. In 2020, net income grew by a 99 percent to 556.3 billion won.
Krafton said in the disclosure that the newly raised funds will be used to purchase more intellectual property, to strengthen its product portfolio, pursue acquisitions and expand its presence in emerging markets including India and the Middle East. It will also invest in digital technologies like artificial intelligence and deep learning.
Currently, the largest shareholder of Krafton is Chang Byung-gyu, founder and chairman of the company, holding 16.43 percent stake as of the end of March, followed by Image Frame Investment (HK), a subsidiary of Shenzhen’s Tencent, with 15.52 percent.
After the IPO, the company said in the filing that Chang will own 13.97 and Tencent 13.2 percent. Krafton said that the largest shareholder will control 29.09 percent when connected party holdings are included.
BY KIM JEE-HEE [firstname.lastname@example.org]