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Elice IPO Crumbles: AI Stock Woes Deepen
20 Oct
Summary
- Elice shares plunged over 30% on their first trading day.
- Investor concern over AI sector valuations continues to rise.
- The company was founded in 2015 as a coding education platform.
Shares in Elice, a data centre infrastructure provider, plummeted more than 30% on their inaugural trading day in South Korea. This sharp decline on the Kosdaq exchange, opening at Won61,400 ($46.28) against an IPO price of Won90,500, has intensified investor anxieties regarding the valuations of companies in the artificial intelligence sector.
The weak market debut for Elice occurred as semiconductor stocks in Seoul continued their downward trend. Major chipmakers like SK Hynix and Samsung Electronics saw significant drops, contributing to the Kospi Composite index's overall slide. This follows a pattern seen globally, where AI-related companies are facing increased investor skepticism.
Elice, established in 2015 as a coding education platform before pivoting to AI cloud infrastructure, had priced its shares at the top of its indicative range for its IPO. The company raised approximately Won201bn ($151mn), with strong demand from local retail investors. However, its performance mirrors that of other AI-focused ventures, such as Nvidia-backed Firmus, which recently abandoned its IPO plans.
Concerns over higher financing costs, intensified competition, and uncertain long-term returns are impacting the AI trade, leading to disrupted listing plans worldwide. Despite Elice's revenue tripling in the first half of the year, its market debut highlights the current cautious sentiment surrounding AI investments.
