Instead of KOSDAQ
Ticket Monster recently attracted investment from South Korean handbag manufacturer Simone. The former is aiming to go public on KOSPI by taking this opportunity to prove its growth potential and enhance its financial soundness. Earlier, Ticket Monster was planning to go public on KOSDAQ. However, it recently changed its plan as the stock market is moving sideways.
“Ticket Monster can be listed on both KOSPI and KOSDAQ as of now,” a local investment bank explained, adding, “It seems that the company will opt for KOSPI in view of the size of the capital in the market and the symbolic significance that it is the first South Korean social commerce firm to go public.”
At present, any company in the red can be listed on KOSPI as long as its estimated market cap is 600 billion won or more and its equity capital is 200 billion won or more. Although the market cap of Ticket Monster depends on its offering price, the company had an equity capital of 267.6 billion won as of the end of last year.
Simone is currently the largest original design manufacturer (ODM) in the global luxury handbag market with a share of 10%. Its share in the U.S. market is as high as 30%. This company is expecting that its investment in Ticket Monster will lead to an increase in sales based on Ticket Monster’s online and mobile distribution networks. Likewise, Simone’s global networks covering North America, Europe, Southeast Asia and many more regions can facilitate Ticket Monster’s overseas business expansion.
Simone is planning to make use of a 150 billion won hedge fund for venture investment it raised last year in making the investment. Hedge fund-based investment in a venture firm has been pretty rare in South Korea. “The hedge fund of Simone has a maturity of as long as eight years and its size is pretty large as well,” said an industry insider, continuing, “In view of these factors, the investment is highly likely to be fruitful.”
Still, some in the industry are warning against the IPO in that Ticket Monster’s losses are on the increase. Specifically, the losses snowballed from 24.6 billion won to 141.9 billion won between 2014 and 2015 and then to 158.5 billion won last year. Although Ticket Monster explained that the losses were inevitable for investment in its growth stage, an increasing number of investors are expressing concerns over its financial soundness and the fact that South Korean social commerce firms have not been profitable without exception since their inception six years ago. “It is true that the social commerce companies including Ticket Monster have growth potential but they are taking more time than their counterparts abroad in making a turnaround,” another local investment bank mentioned, advising that its listing on KOSPI will be successful only after this matter is properly dealt with.