Elice plunges 32% in Kosdaq debut, stoking doubts over AI infrastructure valuations

Shares of South Korean AI infrastructure firm Elice Group plunged 32% in their Kosdaq debut on October 20, despite record demand during its initial public offering, adding to concerns that investor appetite for AI listings is fading, Bloomberg reported.

Elice priced its shares at 90,500 won, the top of its indicative range, raising about 201.1 billion won, or roughly $151 million, in Kosdaq’s largest IPO of the year. The stock fell as low as 61,000 won during the session, Seoul Economic Daily reported, erasing roughly $480 million in market value from its valuation of about 1 trillion won at the offer price.

400-fold retail demand fails to hold

The retail subscription was 408 times oversubscribed and drew more than 10 trillion won in deposits, while institutional bookbuilding involving 2,367 investors was 389 times subscribed.

Founded in 2015 as an AI coding education platform, Elice has expanded into GPU-based cloud services and data centers. It reported first-half revenue of 34.4 billion won, roughly triple a year earlier, and an operating profit of 10.3 billion won, and plans to use the proceeds to build AI data centers and expand in the US, Japan and Singapore.

The slump follows Australian data center developer Firmus’s decision to scrap its $5 billion IPO on October 9 after orders dried up, and comes as credit markets reprice AI infrastructure risk, with CoreWeave’s five-year credit default swap spread reaching a record on October 15, according to Startup Fortune.