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Nexon raises $1.17 billion from IPO

By Matthew Handrahan

Wed 14 Dec 2011 8:48am GMT / 3:48am EST / 12:48am PST

Will use funds for acquisitions, stock value falls on first day of trading


- Specialized in developing, publishing and servicing online games

- Games in service: 17 unique games...

The Korean online gaming company Nexon has gone public, raising $1.17 billion from initial share sales.

Nexon is the biggest IPO to hit the Tokyo Stock Exchange this year, giving the company a market value of between $7.69 billion and $8.97 billion.

In an interview with Bloomberg, Nexon CFO Owen Mahoney claimed that the company is interested in using the new funds to make acquisitions.

"We want to have currency and cash on hand to be able to move aggressively if and when opportunities come up," he said. "We like to buy teams and properties early in their life."

However, Nexon's stock price fell by 3.9 per cent on its first day of trading, from the IPO price of 1300 to 1249 this morning - greater than the 0.5 per cent drop suffered by the benchmark Topix index.

Nexon pioneered the now ubiquitous free-to-play business model through games like MapleStory, allowing it to build an audience in China that accounts for more than a third of its total revenue. The company anticipates significant growth in the region over the next few years.

"Some people debate whether China's got a lot of growth in it," Mahoney said. "We think China is very early days."

In its IPO filing, Nexon stated that it had 1.2 billion registered players, with 77 million of those active in September 2011. Eight of its games have generated lifetime revenues of $100 million or more, three of which have earned more than $300 million, and one of which has earned $400 million.

"We can really bring a lot to the table," Mahoney added.. "We know how to tune a game so that people will play it for months on end."

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