Ellis Group shares fall 27% to 31% on KOSDAQ debut after IPO priced at top of range
In short
Ellis Group (엘리스그룹), an AI infrastructure company, began trading on the KOSDAQ market on 20 October at well below its IPO price of 90,500 won. Outlets reported it down between 27.51% and 31.27% in the first hour, with an intraday low of 61,000 won. The IPO had drawn demand of 388.84 to 1 from institutions and about 408 to 1 from retail investors.
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Ellis Group began trading on the KOSDAQ market on 20 October and fell sharply on its first day. Korea Economic Daily reported that at 09:05 the stock traded at 65,600 won, down 27.51% from the IPO price of 90,500 won. Yonhap reported that at 09:10 it traded at 62,200 won, down 31.27%. Yonhap said the stock opened at 75,700 won and at one point fell to 61,000 won. [ 1 , 2 ]
Seoul Economic Daily, citing the Korea Exchange, reported that at 09:30 the stock stood at 63,000 won, down 27,500 won or 30.39% from the IPO price, and that it had touched 61,000 won during the session. The paper said the market value of about 1 trillion won at the IPO price had dropped to around 700 billion won. Newsis, also citing the Korea Exchange, reported that at 10:00 the stock was at 65,600 won, down 27.51%. It said the stock opened down in the 16% range and at one point traded in the 60,000 won range, more than 32% below the IPO price. [ 3 , 4 ]
Newsis said the selling was analysed as being prompted by concern over the company value formed during the offering and by profit-taking after the listing. The other outlets did not give a cause. [ 4 ]
In book-building for institutional investors, 2,367 institutions took part and demand reached 388.84 to 1, according to Seoul Economic Daily and Newsis. The IPO price was fixed at the top of the 70,400 to 90,500 won range. Seoul Economic Daily said the retail subscription on 7 and 8 October drew 408.26 to 1. Newsis said 226,737,440 shares were applied for against 555,500 shares allocated. Korea Economic Daily and Newsis put the subscription deposits at about 10.26 trillion won. Seoul Economic Daily said the total offering was about 201.1 billion won and the expected market value before listing was 1,005.4 billion won. [ 1 , 3 , 4 ]
The outlets described the company in different terms. Founded in 2015, it was called an AI infrastructure company by Seoul Economic Daily and Newsis, while Yonhap called it a software developer and supplier with AX (AI transformation) and AI cloud as its main products. Korea Economic Daily said it provides AI data centres, cloud and AX solutions. Korea Economic Daily and Seoul Economic Daily reported first-half revenue of 34.4 billion won and operating profit of 10.3 billion won. Seoul Economic Daily added that last year's consolidated revenue was 39.5 billion won and operating profit 5.2 billion won. The company plans to use the proceeds for AI data centres and overseas expansion, Seoul Economic Daily said, naming the United States, Japan and Singapore. [ 1 , 2 , 3 , 4 ]
Why it matters
The fall came after strong demand in both the institutional book-building and the retail subscription. Seoul Economic Daily reported that the market value of about 1 trillion won at the IPO price had dropped to around 700 billion won.
Key facts
- Ellis Group began trading on the KOSDAQ market on 20 October; the IPO price was 90,500 won. [ 1 , 2 , 3 , 4 ]
- At 09:10 the stock traded at 62,200 won, down 31.27% from the IPO price, after opening at 75,700 won, according to Yonhap. [ 2 ]
- Seoul Economic Daily reported the stock at 63,000 won (down 30.39%) at 09:30, with an intraday low of 61,000 won. [ 3 ]
- Newsis reported the stock at 65,600 won (down 27.51%) at 10:00 and said it had briefly fallen more than 32% during the session. [ 4 ]
- The IPO price was set at the top of the 70,400 to 90,500 won range after institutional demand of 388.84 to 1. [ 1 , 3 , 4 ]
- The retail subscription drew about 408 to 1 and about 10.26 trillion won in subscription deposits. [ 1 , 3 , 4 ]
- The company plans to use IPO proceeds for AI data centres and overseas expansion. [ 1 , 3 ]
Confirmed by several sources
- Ellis Group's shares fell more than 27% below the 90,500 won IPO price in early trading on their KOSDAQ debut on 20 October. [ 1 , 2 , 3 , 4 ]
- The IPO price was fixed at the top of the 70,400 to 90,500 won range after institutional demand of 388.84 to 1. [ 1 , 3 , 4 ]
- The retail subscription was oversubscribed about 408 to 1 and drew about 10.26 trillion won in deposits. [ 1 , 3 , 4 ]
- The company was founded in 2015. [ 1 , 2 , 3 ]
Still unclear
- Why the shares fell Only Newsis offered an explanation, saying valuation concerns from the offering and profit-taking after listing were seen as prompting selling; the other outlets gave no cause.
- How far the stock fell The reported figures differ by time of day: 27.51% at 09:05 and 10:00, 31.27% at 09:10 and 30.39% at 09:30. No document gives a closing price.
- How to describe the company's business Yonhap called it a software developer and supplier, while Seoul Economic Daily and Newsis called it an AI infrastructure company.
What local media are saying
Timeline, local time
- Korea Economic Daily reported the stock at 65,600 won, down 27.51% from the IPO price. [ 1 ]
- Yonhap reported the stock at 62,200 won, down 31.27%. [ 2 ]
- Seoul Economic Daily, citing the Korea Exchange, reported the stock at 63,000 won, down 30.39%. [ 3 ]
- Newsis, citing the Korea Exchange, reported the stock at 65,600 won, down 27.51%. [ 4 ]