Steam‑Anker IPO Crash: Krafton Falls 20% on Debut Roll‑Call
When the South Korean gaming giant Krafton Inc. rolled onto the market stage on Tuesday (Aug 10), it didn’t quite impress the crowd. Their shares plummeted a staggering 20% from the initial offering price, sending a ripple of disappointment through the city’s trading floor.
What Made the Drop?
- High‑Flying Valuation: Executives priced the stock at 498,000 won ($590) per share—according to analysts this was simply too lofty for the market to swallow.
- China’s Tightening Grip: With regulators zero‑ing in on the gaming sector, any company dependent on Chinese sales is now seen as a risky bet.
- Low First‑Day Performance: The share opened 9.9% below the IPO price and finished 8.8% lower, dropping the company’s valuation to roughly $19.3 billion.
Why China Is the Heavy‑Hit Factor
In the last quarter, 87% of Krafton’s revenue came from Asia—excluding Korea. Of that slice, about 70% is fed by the partnership with Tencent, especially through the massive hits Peacekeeper Elite and Honour of Kings.
With China’s recent rattling of the “spiritual opium” label over online gaming, both Tencent and the global player Activision Blizzard felt the brunt. The chips from China are being scrutinized, and any changes to Peacekeeper Elite could spell trouble—potentially “a very large negative” for Krafton, according to LightStream Research.
The IPO Numbers in a Nutshell
- Posted $3.75 billion—South Korea’s second‑largest flat in 15 years.
- Only 65% of the proceeds stay with Krafton, earmarked for acquisitions.
- Rest is roughly \cash‑out\ for shareholders; a decent payday.
- In market cap terms, the firm sits at POSPI #19 after the drop, showing its hefty but shaky presence.
What’s Next?
South Korea is roaring with potential floaters—think LG Energy Solution (EV battery) and Kakao Pay (backed by China’s Ant Financial). If the IPO scene keeps sparking, it might become a hot year for stock listings, but one can’t ignore the looming shadow from China’s regulatory arm.
Bottom line? Krafton’s debut was a dramatic introduction, but the market’s bite reveals that high hopes and heavy reliance on China can easily become a double‑edged sword.
