South Korean AI Cloud Firm Elice Plunges Over 30% in IPO Debut as CoreWeave Extends Decline
Key Takeaways
- •Elice Group shares closed at 60,500 won on October 20, more than 30% below the 90,500 won offer price, after the company raised about $151 million at an initial valuation of roughly $755 million.
- •Pre-listing demand was exceptionally strong, with retail subscriptions exceeding 400 times the shares available and institutional orders near 389 times their allocation, but that enthusiasm failed to carry into the first session.
- •Elice plans to direct much of its IPO proceeds toward modular data centers after first-half revenue tripled to 34 billion won and operating profit reached 10 billion won.
- •Fundraising difficulties are spreading across the AI infrastructure sector, as Australia's Firmus canceled its flotation, AirTrunk postponed a Singapore property trust listing, and SoftBank-backed SB Energy delayed its proposed U.S. share sale.
- •CoreWeave fell around 3% in premarket trading with its unsecured bond yields near 15%, while South Korea's KOSPI dropped 3.73% to 5,552.74 and Brent crude rose above $111 per barrel on reported attacks on Gulf shipping and Saudi facilities.
South Korean AI cloud provider Elice Group endured a punishing stock market debut on Tuesday, October 20, with shares closing more than 30% below their offer price. The weak listing dealt a setback to artificial intelligence investors as technology stocks fell and questions intensified over how the sector's data center expansion will be financed. The declines extended to U.S.-listed CoreWeave, while losses among South chipmakers and a rise in Brent crude above $111 per barrel added to the day's pressure.
Elice Closes Far Below Offer Price on Trading Debut
Elice shares ended their first session at 60,500 won on October 20, well short of the 90,500 won offer price. The Seoul-based cloud provider raised approximately $151 million through the listing, which initially valued the company at about $755 million.
Demand had looked strong before trading began. Retail investors subscribed to more than 400 times the shares available to them, while institutional orders reached nearly 389 times their allocation. That enthusiasm failed to carry into the opening session.
AI Data Center Spending Faces Fresh Questions
The disappointing debut comes as the sector continues to pursue large-scale projects. Reports of talks over another $45 billion AI cloud deal between Anthropic and Nscale illustrate how much capacity developers plan to build, although the proposed agreement remains under discussion.
Elice intends to direct much of its IPO proceeds toward modular data centers and related equipment—prefabricated facilities built from standardized units that can be assembled and expanded on site. Its first-half revenue tripled to 34 billion won, while operating profit reached 10 billion won, according to Reuters.
Other companies in the sector have encountered difficulties raising capital. Australia's Firmus canceled its planned flotation, AirTrunk postponed a Singapore property trust listing, and SoftBank-backed SB Energy delayed its proposed share sale in the United States. Those setbacks have removed several planned fundraisings from the sector's calendar, thinning the financing channels available just as developers map out multibillion-dollar capacity plans. Whether the reported talks between Anthropic and Nscale harden into a signed agreement, and whether shelved offerings such as AirTrunk's trust listing or SB Energy's share sale return to the calendar, will show how funding conditions develop for the sector.
CoreWeave Extends AI Infrastructure Decline
CoreWeave shares fell around 3% in Tuesday's premarket trading. The drop marked another decline for the AI infrastructure provider, whose financing costs have come under increasing scrutiny. A recent report on rising borrowing pressure for CoreWeave and Nebius noted that yields on CoreWeave's unsecured bonds had reached about 15%—notable because unsecured debt carries no collateral, so those yields represent the return lenders now require before funding the company.
Investors are examining whether long-term customer contracts can cover the cost of servers, electricity, and new facilities. Higher interest rates make debt-funded construction more expensive and can reduce the cash available for expansion.
JPMorgan has defended CoreWeave's contract returns despite those concerns. However, the bank expects the company to continue spending more cash than it generates until 2030, according to its assessment.
KOSPI Falls as Brent Crude Tops $111
South Korea's benchmark KOSPI index dropped 3.73% to 5,552.74. Samsung Electronics lost 2.98%, while SK Hynix declined 4.23%. Both companies supply memory chips used in artificial intelligence systems, and their falls mirrored the broader retreat in AI-linked shares; as two of the KOSPI's largest constituents, their swings also carry outsized weight in the index's overall move.
Energy markets added another source of pressure. Brent crude, the international oil benchmark, moved above $111 per barrel as reports of attacks on Gulf shipping and Saudi facilities raised concerns about regional supplies. Saudi authorities had not confirmed some of the reported strikes.
Source: CoinCentral
