Unlock Editor’s Digest for free
Roula Khalaf, editor-in-chief of the FT, selects her favorite stories in this weekly newsletter.
Shares of a South Korean data center builder fell by almost a third on their first day of trading, reinforcing growing investor concerns about AI sector valuations.
Elice’s weak performance came amid a continued selloff in semiconductor stocks in Seoul as investors continued to worry about the sustainability of AI spending.
Shares fell 32 percent to 61,500 Won ($46) on the tech-focused Kosdaq index on Tuesday, well below their listing price of 90,500 Won.
The broader Kospi index slipped 3.7 percent to its lowest level since early April, with SK Hynix down 4.2 percent and Samsung Electronics down 3 percent. The two chipmakers account for about half the index, which has fallen by a fifth over the past month but is still up almost 30 percent this year.
The declines came despite U.S. technology stocks recovering overnight after the tech-heavy Nasdaq 100 index fell 5.5 percent last week.
Elice raised about 201 billion won ($151 million) after the “neocloud” company priced its shares at the top of its indicative range in Kosdaq’s biggest IPO this year.
The issue was massively subscribed with strong demand from local retail investors. More than 10 trillion won has been committed to subscription deposits, with the retail portion subscribed more than 400 times.
However, retail investors lamented their significant paper losses on online forums on Tuesday. “I’m so scared…is it wise to hold on to the stocks? wrote one. “Get out while you can,” said another.
Elice’s disappointing market debut follows Nvidia-backed data center operator Firmus’ decision less than two weeks ago to abandon its $5 billion IPO in Australia.
The AI sector has recently been hit by concerns over rising financing costs, intensifying competition and uncertain long-term returns on large AI investments, with plans to list disrupted around the world.
Shares of US neocloud company CoreWeave have fallen by more than half from their May peak, as investors worry about the valuation target of Nscale’s IPO.
Peter Lee, an analyst at Citi, said: “Higher interest rates are fueling concerns about the sustainability of AI investments. »
In an effort to boost investor confidence, Elice highlighted strong financial improvement in its prospectus, with revenue for the first half tripling to 34.4 billion won ($25.9 million).
The company was established in 2015 as a coding education platform by three doctoral students from the Korea Advanced Institute of Science and Technology.
It then focused on AI cloud infrastructure, offering servers, liquid-cooled chips, cloud computing and networking infrastructure and software.
Elice has also developed a modular data center platform that allows them to be built more quickly. Its technology includes liquid cooling technology to support high-performance AI chip clusters.
With financial backing from venture capital firms such as Vertex Ventures and Altos Ventures, Elice intends to use the IPO proceeds to expand its domestic AI data center operations and expand globally.
Separately, shares of Mynt rose more than 2% in Manila on Tuesday after the owner of digital wallet provider GCash made its trading debut in the Philippines’ biggest IPO.
The company sold about 8 billion shares at 6.60 pesos, raising 53 billion pesos ($840 million).
Gn bussni
