South Korean AI Firm Elice's Shares Drop 30% on Market Debut Amid Sector Distrust
Shares of South Korea’s AI services company, Elice Group, fell by 30% during its market debut as investor confidence in the AI sector wanes. The firm raised 201.1 billion won ($150 million) through an IPO and plans to use most proceeds for launching modular data centers. Analysts suggest that investors are now more cautious about whether large-scale AI investments will yield returns, especially with high borrowing costs due to inflation. The decline in Elice's stock follows a broader trend of stalled or postponed AI-related IPOs globally, including firms like Australia’s Firmus and Japan-backed SB Energy. Despite strong demand for the IPO—drawing institutional orders worth 388 times its offering size—the company now trades at nearly 30% below its initial price. Elice reported a significant revenue increase in H1 2024, tripling to 34 billion won and turning an operating profit of 10 billion won. However, market uncertainty remains high as demand for AI infrastructure is still unclear.
Topics: AI data_centers IPO stock_decline
Part of the story Elice Shares Drop on Market Caution Toward AI Stocks (2 articles)