Elice Group, a South Korean AI service company, sees significant stock price drop on its first day of trading on KOSDAQ, with an intraday decline of about 33%
South Korean AI service company Elice Group saw a significant drop in its stock price on its first day of trading on KOSDAQ, with an intraday decline of about 33%. The latest price is approximately 65,300 KRW, down about 28% from the offering price of 90,500 KRW.
The company raised approximately 201.1 billion KRW (about 151 million USD) through its IPO, with the offering price at the upper limit of the recommended range. It was expected to have a market value exceeding 1 trillion KRW before listing, but the market value shrank to about 700 billion KRW on the first day.
The institutional subscription rate reached 388.84 times, while retail subscriptions exceeded 400 times, attracting about 10 trillion KRW in subscription deposits. The company reported a 200% revenue growth in the first half of the year to about 34.4 billion KRW and achieved positive operating profit.
Elice provides AI cloud services and AI-based educational and business software, planning to use most of the raised funds for launching portable modular data centers and related infrastructure, supported by institutions like Vertex Ventures and Altos Ventures.
Kiwoom Securities analyst Kim Hak-joon pointed out that the market is concerned that such companies may not be able to secure follow-up financing from investors. Global cases like Firmus canceling its IPO and CoreWeave's stock price halving from its peak have intensified doubts about the returns on AI capital expenditures.
In the context of high borrowing costs, institutions and some early subscribers quickly sold off shares after listing to lock in profits, with funds flowing from overvalued data center-related assets to those with higher certainty. The initial enthusiasm from retail investors did not translate into post-listing support, benefiting undervalued or stable cash flow assets while putting pressure on AI infrastructure companies reliant on follow-up financing.
Source: Public Information
ABAB AI Insight
Elice was founded in 2015 by KAIST doctoral students, initially as a programming education platform, later shifting to AI cloud and modular data center business. This IPO is one of the largest in South Korea in 2026, but the first-day drop and negative signals from global data center-related companies (such as Firmus canceling its IPO and AirTrunk delaying its REIT listing) are concerning.
The company plans to primarily invest the raised funds into the construction of portable modular data centers, attempting to meet the demand for AI chip clusters with high-density power supply and liquid cooling technology. However, in a high-interest-rate environment, this capital-intensive model faces difficulties in securing follow-up financing, with investors tending to demand higher discount rates or directly avoid long-term return projects.
Similar patterns can be seen in CoreWeave's significant pullback in the US stock market and the previous concentrated sell-off of AI-related heavyweight stocks in the South Korean market; the current data center and AI infrastructure sector is transitioning from an expansion narrative to a return verification phase, with a clear divergence between primary market pricing and secondary market acceptance.
This reflects a dual change in pricing power and capital concentration: investors are shifting pricing power from high subscription multiples and growth expectations to direct scrutiny of capital expenditure return cycles and refinancing capabilities. Mechanically, this is driven by rising discount rates combined with supply shocks, forcing the valuation of heavy asset models like modular data centers to re-anchor towards shorter return cycles.
ABAB News · Cognitive Law
Subscription multiples determine issuance, return cycles determine pricing.
Heavy asset expansion faces high interest rates, financing capability is prioritized in pricing.
Primary market enthusiasm, secondary market votes with feet.