International

Game Maker Shift Up Jumps in South Korea After $320 Million IPO

(Bloomberg)

(Bloomberg) -- Game developer Shift Up Corp. jumped 18% in its first day of trade in South Korea after an initial public offering that raised 435 billion won ($320 million), the largest in the country for a gaming firm in almost three years. 

The shares ended the session at 71,000 won. The startup, which has China’s Tencent Holdings Ltd. as its second-largest holder, sold nearly 7.3 million shares at 60,000 won each, the top of a marketed range. The offering drew strong interest from funds, with demand for 226 times the number of shares available to them, according to a filing last week.

Shift Up’s offering is the first of at least $50 million by a South Korean gaming developer — a business in which the country excels globally — since 2021, when Krafton Inc. listed after its jumbo $3.8 billion IPO, according to data compiled by Bloomberg. 

“There is ample room for the stock to rise after the IPO,” Lee Jieun, an analyst at Daishin Securities Co. wrote in a report last month that initiated coverage with a buy recommendation. The company stands out from local rivals due to its intellectual property, diversified platforms and high success ratio, she wrote in the report.

Shift Up was founded in December 2013 by Hyung-Tae Kim, who remains as the company’s largest holder after the listing. The firm is known for its mobile and computer games that include “Goddess of Victory: Nikke” and console game “Stellar Blade.”

The latter, set in a post-apocalyptic world, topped sales in the PlayStation stores of eight countries since being rolled out earlier this year, according to terms of the offering. 

The Seoul-based company plans to use the IPO proceeds to diversify its game portfolios, according to terms of the deal. The company registered a profit of 107 billion won last year, compared with a loss of 7.1 billion won in the previous 12 months, the prospectus showed.

Shift Up’s IPO is the second-largest in South Korea this year, behind HD Hyundai Marine Solution Co.’s $553 million offering in the second quarter. As of Wednesday, Seoul trading debuts of IPOs of at least $300 million during the past five years ended their first session 62% higher on average, Bloomberg-compiled data show. 

“The investment case rests on a stellar game development track record, several growth drivers, high profitability, and cash generation,” said Arun George, an analyst at Global Equity Research who publishes on the platform Smartkarma. 

--With assistance from Jenny Lee and Shinhye Kang.

©2024 Bloomberg L.P.