Mercari shares surge 77pc
TOKYO: Flea market app operator Mercari Inc’s shares surged 77 per cent in its Tokyo stock market debut yesterday, underscoring strong investor appetite for a rare Japanese unicorn bent on United States expansion.
Shares rose as high as 6,000 yen (RM218.98) in early afternoon trade, hitting daily limit high and valuing the company at as much as US$7.4 billion (RM29.6 billion).
The listing makes Mercari the most valuable firm on the Tokyo bourse’s Mothers market for startups, ahead of games and social network company Mixi Inc and robotics firm Cyberdyne Inc.
A popular smartphone app that allows people to trade used items online, Mercari has been downloaded 71 million times in Japan where it has 10.5 million active users. It makes money by charging sellers commission, and expects sales to jump 62 per cent to 35.8 billion yen this financial year.
Mercari shares already looked expensive, said Masayuki Otani, chief market analyst at Securities Japan. While the app was well known in Japan and still growing, it was likely to face more competition at home, he said, with companies such as Rakuten Inc and Start Today Co Ltd offering used-goods services.
Mercari shares opened at 5,000 yen versus initial public offering price of 3,000 yen.
The company is profitable at home but is losing money in the US, where its expansion plans are being headed by former Facebook executive John Lagerling.
Its US expansion dragged it to a net loss of 4.2 billion yen in the last financial year through June last year, with a further loss of 3.4 billion in the nine months to March as the company committed funds to improving its brand recognition through advertising.