Initial Thoughts on the Webtoon Entertainment IPO

• Naver Corp (035420 KS) is trying to complete the IPO of its affiliate Webtoon Entertainment in the US stock market as early as June 2024.

• The expected value of Webtoon Entertainment (post IPO) is about US$3 billion to US$4 billion. Webtoon Entertainment is seeking to raise about US$500 million in this IPO.

• The IPO of Webtoon Entertainment in the US is likely to have a positive impact on Naver Corp (035420 KS).

Naver Corp (035420 KS) is trying to complete the IPO of its affiliate Webtoon Entertainment in the US stock market as early as June 2024. The expected value of Webtoon Entertainment (post IPO) is about US$3 billion to US$4 billion (4 trillion won to 5.3 trillion won).

Webtoon Entertainment is seeking to raise about US$500 million in this IPO. The IPO of Webtoon Entetainment in the US is likely to have a positive impact on Naver Corp (035420 KS).

If Webtoon Entertainment is able to complete its IPO around June 2024, it is likely to be one of the largest IPOs among Korean companies this year. Naver Corp (035420 KS) currently owns a 71.2% stake in Webtoon Entertainment.Naver currently has a market cap of 33 trillion won. Goldman Sachs and Morgan Stanley are the lead underwriters of this IPO.

Webtoon Entertainment has subsidiaries such as Naver Webtoon, Line Digital Frontier (Japan), and Wattpad (Canada). Naver Webtoon reportedly posted positive EBITDA for the first time ever in 2023. If Webtoon Entertainment succeeds in its IPO, it will become the second listed company in the group after Naver. Line Japan listed simultaneously in Japan and the United States in August 2016, but was delisted in December 2020 when it merged with Yahoo Japan's parent company, Z Holdings.

So far in 2024, Webtoon Entertainment has slightly reduced its employee base by about 3% (about 30 people out of 1,000 employees).