South Korea Neocloud Provider Elice Tops 90,500 Won IPO Price in Retail-Driven Rebound

Shares of South Korean neocloud provider Elice Inc. surged as much as 25% to 99,900 won on Thursday in Seoul, climbing above its 90,500 won initial public offering price for the first time since going public earlier this week, before paring earlier gains to hover near the IPO price by late morning. TheSeoul-based company raised 201B won ($152M) in its IPO, saw its shares tumble 32% in Tuesday's trading debut over concerns that AI infrastructure providers were taking on too much debt to finance growth, and then closed 30% higher at the daily limit on Wednesday. Retail investors drove Thursday's buying activity, with Kiwoom Securities recording the largest volume of buy orders and Toss Securities ranking Elice among its 10 most traded stocks alongside Samsung Electronics Co. and SK Hynix Inc. Broader weakness across the local benchmark Kospi index and declines in Samsung Electronics and SK Hynix weighed on Thursday's session as investors evaluated mixed signals from US tech earnings at Tesla Inc. and Meta Platforms Inc. alongside Middle East tensions. "While Elice's second day rally is encouraging, we think investor sentiment toward neoclouds remains cautious, and the sector is likely to stay volatile as funding becomes increasingly selective. Equity investors are looking beyond headline order books to execution, funding resilience and the quality of underlying operations." — Gary Tan, Portfolio Manager at Allspring Global Investments.