NOV. 7, 2011 • Nexon Co. Ltd. hopes listing on the Tokyo Stock Exchange will raise as much as ¥100 billion yen ($1.3 billion) once the Nexon IPO is complete in December. According to the Bloomberg news service, Nexon hired Nomura Holdings Inc., Morgan Stanley and Goldman Sachs Group Inc. to manage the offering in Japan, the U.S. and Europe. The IPO would be the biggest by a company listing in Japan this year, and the second largest in the technology industry worldwide in 2011, according to data compiled by Bloomberg.
Impact: Timing of IPOs can be tough. At the end of November Nexon announced that the accounts of over 13 million Maple Story users in Korea had been hacked and personal information was leaked. That is clearly one of the risks faced by companies engaged in online business and so with Nexon investors will obviously weigh-in on how they feel about that potential risk. When Nexon goes public they will be the largest pure play online game company that does most of its business outside China. If Nexon gets a valuation of $7 billion that will be equivalent to the valuation of Electronic Arts. Electronic Arts has about four times as much revenue as Nexon and EA’s “digital revenue” alone is about equal to Nexon’s revenue. However, Nexon has a proven digital business model whereas Electronic Arts has focused more on revenue and has not been clear about how their digital model will be profitable.