Naver, South Korea’s foremost online platform operator, is gearing up to list shares of its LA-based subsidiary, Webtoon Entertainment Inc., on the US stock market around June.
According to recent reports, Naver is actively pursuing plans to make its online comics operator, Webtoon Entertainment, public on the US Nasdaq exchange. With this, the company aims to tap into the vast opportunities the US capital markets offer.
According to industry insiders, Webtoon Entertainment, the overseeing entity of Naver’s Korean and global digital comics business, has recently appointed Goldman Sachs and Morgan Stanley as lead managers for its upcoming US initial public offering. The move is said to be Webtoon Entertainment’s strategic approach to its planned IPO in the United States, with the listing anticipated to occur as early as June.
Headquartered in Los Angeles since May 2020, Webtoon Entertainment holds a controlling stake in Naver Webtoon Ltd., the world’s leading digital comics provider. As the parent company, Webtoon Entertainment manages the overall operations of Naver Webtoon and its content platform business, including subsidiaries such as LINE Digital Frontier Corp. in Japan and webtoon and web novel producers in Canada, namely Wattpad Webtoon Studios and Wattpad Corp.
As the largest shareholder of Webtoon Entertainment, Naver Corp. holds a 71.2% stake in the company. With plans to raise to $500 million at a valuation ranging between $3 billion and $4 billion, Webtoon Entertainment is gearing up for its initial public offering (IPO), set for as early as June. In addition to Goldman Sachs and Morgan Stanley, the organizers of the IPO, the company may consider inviting more underwriters to facilitate the offering process, as reported by Bloomberg News.
Analyst Chung Ho-yoon from Korea Investment & Securities emphasized the importance of the funds raised through the IPO for Naver Webtoon’s long-term growth strategy.
The company aims to expand its user base through marketing efforts and secure intellectual property suitable for global markets. However, some market analysts suggest that the IPO may not significantly impact the share price of Naver, as the estimated corporate value of $3-4 billion may not suffice to drive a surge in Naver’s stock price. Considering the potential dilution of Naver’s stake post-IPO, the market debut of Webtoon Entertainment could pose a negative factor for Naver’s stocks.
Naver Webtoon has 85.6 million monthly active users worldwide, as revealed during a press conference earlier this year. Notably, the platform has garnered 12.5 million users in North America as of the second quarter of 2022.
Last year, Naver Webtoon achieved profitability in terms of EBITDA, marking its first positive result since its establishment. If Webtoon Entertainment successfully completes its IPO, it will become the second listed entity within the Naver group, following Naver itself.
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