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PUBG Maker Krafton Aims to Raise $5B in South Korea’s Biggest IPO

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by Patrick Kariuki · 3 min read
PUBG Maker Krafton Aims to Raise $5B in South Korea’s Biggest IPO
Photo: KRAFTON

With the upcoming listing, Krafton seeks to break the biggest debut record in South Korea, which is currently held by Coupang.

Krafton Inc is closely associated with PlayersUnknown Battlegrounds. Yes, it’s the company credited for the hit mobile phone game. This time, Krafton intends to raise 5.6 trillion won, equivalent to $5 billion, via a South Korean IPO which is believed to be the largest in the country ever.

To achieve this IPO milestone, Krafton needs to sell over ten million shares worth 458K to 557K apiece, the company revealed on Wednesday. This deal is much more than what was expected, and it would eventually give the company a market capitalization of around 28T won. The market capitalization will of course be based on the total of common shares. Pricing is expected to end on July 9 while the listing day is expected to be on July 22.

Battle of Equals

With the upcoming listing, Krafton seeks to break the biggest debut record in South Korea, which is currently held by Coupang Inc. The current titleholder Coupang raised approximately $4.6 billion on NYSE. Previously, the company that had the largest public listing was Samsung Life Insurance. The company sold shares worth $4.3 billion in 2010.

Riding on a retail boom, South Korea, the fourth-largest economy in Asia, is set to have more deals from companies such as LG energy and Kakao before the year, 2021, ends.

Already with some fame up its sleeves, thanks to the blockbuster hit, observers are waiting to find out if Krafton is just another one-hit wonder orbit will rise to the occasion. Krafton is largely dependent on PUBG, a genre-defining blockbuster that sold over 1.67 trillion won in 2020.

Effects of Covid-19 on Krafton’s Performance

One thing that worries analysts is Krafton’s Performance after the Covid-19 lockdown. The global pandemic partly boosted the Krafton’s blockbuster since people were forced to stay at home, thanks to the lockdown directives in many countries.

However, Krafton’s filings show that sales have dropped sharply after things started returning to normal around the world. According to this year’s filing, sales and operating profit have declined by 11.6% and 33% respectively. The company’s prospects have since warned that fortunes may sígnificantly reduce if the pandemic situation continues improving.

Kim Chang, Krafton’s CEO, was quoted saying that other investments of the company haven’t yielded much and now it hopes to use next-gen games to expand PUBG universe. This time however, the Krafton will self-publish its upcoming games and will no longer use the services of third party publishers. Besides gaming, Krafton has its eyes on the Artificial intelligence sector, other entertainment niches, and deep learning to expand the company’s portfolio.

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Patrick Kariuki

Patrick is an accounting & economics graduate, a Cryptocurrency enthusiast, and a Blockchain technology fanatic. When not crafting informative pieces on any of the above subjects, he will be researching on how the Blockchain technology can transform the world, particularly the financial space.

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In its first appearance in the market after raising $3.8 billion in its IPO, the shares of Krafton, Tencent-backed South Korean company behind blockbuster video game PlayerUnknown’s Battlegrounds (PUBG), dropped by as much as 20 percent.  It later was trading at 13.5 percent lower at 10:48 a.m. in Seoul, thereby giving it a market valuation […]