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By Anna J. Park
Lionheart Studio, which had been regarded as one of most anticipated IPOs for the tech-heavy Kosdaq market slated for this year, ended up canceling its listing plan, amid the market's negative sentiments towards its estimated corporate valuation as well as the public's fatigue over Kakao affiliates' series of IPOs.
Originally, the subsidiary of Kakao Games was supposed to conduct a stock allotment process for retail investors early next month. But the game company officially announced the withdrawal of its IPO plan on Thursday, just two weeks after the firm submitted its IPO registration statements to the financial authority.
The company stated that it decided to withdraw its listing plan after thoroughly considering both local and global market factors that make it hard to acknowledge its proper valuation. The game company had hoped its market cap would be valued at a minimum of 3 trillion won ($2.1 billion) with its initial subscription price, but the general market sentiment was that the valuation was excessive.
Another major stumbling block was the public's frosty response to another Kakao firm going public amid suspicions of impairing minor stockholders' financial gains. Since Kakao Games holds a 54.94 percent stake in Lionheart Studio, criticisms run high that the subsidiary's IPO would harm shareholders of Kakao Games.
Meanwhile, Golfzon Commerce announced on Thursday that it would also suspend its own IPO process. Despite its dominant market player status in retail golf equipment, market watchers criticized its IPO plan for circulating an excessive amount of old stocks owned by Golfzon Newdin Holdings, the largest shareholder of the company.
If the IPO plan had gone ahead as planned, Golfzon Newdin Holdings could have cashed in 40 billion won. That's why market watchers suspect whether the IPO itself was pushed for the sake of satisfying the interests of the parent company. Obviously, institutional investors didn't find the IPO structure attractive enough to inject money into, resulting in tepid demand from them. With the failure in the book-building process from institutional investors, the company decided to withdraw its IPO plan.
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