South Korea's LG CNS IPO Stumbles on Trading Debut
LG CNS Co., South Korea's largest new listing in over two years, faced a lackluster debut on the Seoul Stock Exchange. Shares plunged up to 11.3% before closing down 9.9% at 55,800 won, despite being priced at the top of the IPO range at 61,900 won.
The debut highlights growing skepticism among investors towards IPOs as a reliable path to returns in Seoul. Numerous Korean listings have experienced first-day gains, but most have underperformed in the past three months, trading below their IPO prices.
"IPO stocks have been struggling recently," said Kim Dojoon, CEO of Zian Investment Management. "The IPO market may be overheated and needs some regulation."
Only a quarter of the 35 companies that went public in Korea over the past three months trade above their IPO prices. SK Innovation plans to list its lubricant unit SK Enmove in June or July.
Authorities have announced plans to reform the IPO market to encourage long-term investment.
LG CNS, a technology services provider, benefited from a stock market recovery in January. Macquarie Group holds a 35% stake in the company. Despite expectations of a boost from the AI boom, LG CNS's debut was hampered by a lack of liquidity in the Korean market.
Park Jinho of NH-Amundi Asset Management expressed concerns about LG CNS's valuation, comparing it to the decline in shares of rival Samsung SDS Co. last year.