Elice Group, an AI infrastructure company that provides AI cloud services as well as education and office software, rebounded sharply on its second day of trading on South Korea’s KOSDAQ, according to a report by Korea Economic Daily on Oct. 21. As of 9:15 a.m. local time, the stock was quoted at KRW 79,900, up KRW 18,400, or 29.92%, from the previous trading day. Even with that jump, the share price remained below its IPO price of KRW 90,500.
The previous session had ended at KRW 61,600, down KRW 28,900, or 31.93%, from the offering price. Bloomberg reported on Oct. 20 that Elice fell about 32% on its first trading day, calling it an example of weakening confidence in so-called new cloud companies and placing it at the center of a debate over AI company valuations and whether those valuations can be justified. Reuters said the drop renewed concerns about the sustainability of heavy spending on AI infrastructure and the time needed to generate returns. CNBC reported that the impact of Elice’s market debut had spread to U.S. data center-related stocks. The company’s IPO raised $150 million, with proceeds earmarked for modular data centers and related infrastructure.
AI infrastructure company Elice Group, which provides AI cloud services as well as education and office software, rebounded sharply on its second day of trading on South Korea’s KOSDAQ, according to Korea Economic Daily on Oct. 21.
As of 9:15 a.m. that morning, Elice was trading at KRW 79,900, up KRW 18,400 from the previous trading day, a gain of 29.92%. The prior session had closed at KRW 61,600, which was KRW 28,900 below its IPO price of KRW 90,500, a decline of 31.93%. The report said that even if the stock rose to the daily price limit, it would still remain below the offering price.
First-day drop drew broad media attention
Bloomberg reported on Oct. 20 that Elice fell about 32% on its first day of trading, describing it as a case that reflected weakening confidence in so-called new cloud companies. Bloomberg also said the company had been pushed to the center of a debate over AI company valuations and whether those valuations can be delivered on.
Reuters said the sharp decline revived concerns over the sustainability of large-scale spending on AI infrastructure and the time required for investment payback. CNBC reported that the effect of the listing performance had spread to U.S. data center-related stocks.
IPO proceeds
The public offering raised $150 million. The company said it plans to use the listing proceeds for modular data centers and related infrastructure construction.
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