AI fears return with data centre firm Elice’s 33% debut flop
In this news:
Key takeaways
- Data centre firm Elice experienced a 33% drop on its stock market debut in South Korea.
- Retail investors suffered heavy losses after buying into the much-anticipated initial public offering.
- Elice plans to use IPO proceeds to expand AI data centres globally despite the weak market reception.
A user on X posted a screenshot of a 68,255 won position, down 24.75 per cent, on the day, saying: “This is the first time I’ve lost money on an IPO.” Another investor wrote that the stock “ruined Korean stocks and crypto,” to which a comment said “I just want Elice to go away to Wonderland.”
“Retail investors may have blindly believed that IPO stocks would always go up,” said Jo Hyunik, an investment division manager at Seoul-based Iroom Investment Advisors.
To win over investors, Elice touted a 200 per cent surge in first-half revenue to 34.4 billion won, according to its prospectus. The company swung to an operating profit of 10.3 billion won, while earnings before interest, taxes, depreciation and amortization jumped more than 11-fold to 23.2 billion won. The company is expected to record an 83 per cent sales jump in 2026 and an operating margin of about 33 per cent, analyst Douglas Kim wrote in a note on Smartkarma.
Elice’s financial structure is different from CoreWeave’s, and investors don’t need to view the company as “particularly risky,” said Kim Dojoon, chief executive at Zian Investment Management. But, he added, “It remains to be seen whether the company can maintain its current profitability.”
South Korean IPO market trends
A successful offering could have helped break an IPO drought in South Korea, where the primary market has been in the doldrums as fundraising surged across Asia. First-time listings in Seoul have raised US$1.4 billion in 2026, compared with more than US$3 billion in each of the previous three years, according to Bloomberg-compiled data. Meanwhile, SK Hynix Inc. completed the biggest-ever U.S. share sale by a foreign company.
Elice’s IPO was the biggest on the Kosdaq this year and surpassed in Korea only by the US$337 million offering of K Bank Co. in March.
Global expansion plans
Backed by venture capital firms including Vertex Ventures and Altos Ventures, Elice plans to use its IPO proceeds to build more AI data centres around South Korea and abroad, according to chief executive Jae Won Kim.
“We’re going all-in on becoming a full-stack AI infrastructure leader globally,” Kim said in an interview. “This IPO is about giving ourselves the financial firepower to execute.”
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