Key Takeaways
- • Elice, a Seoul-based AI infrastructure provider, shares plunged 32% on their trading debut, closing at 61,500 won after falling as much as 38% intraday, the worst opening-day performance for a major South Korean IPO on record (according to Bloomberg).
- • The $151m offering was priced at the top of its marketed range and drew retail demand more than 400 times the shares available, yet the stock still fell sharply on day one.
- • Elice reported first-half revenue up 200% to 34.4bn won, operating profit of 10.3bn won and EBITDA up more than elevenfold to 23.2bn won, and analysts expect 83% revenue growth in 2026 at roughly 33% operating margin.
- • The selloff reflects broader pressure on AI infrastructure valuations: CoreWeave has lost more than half its value since its May peak, Firmus Grid abandoned its IPO, AirTrunk delayed its listing, and Nscale faced resistance on its target valuation.
- • Petra Capital Management's Albert Yong said sentiment toward AI infrastructure has weakened, particularly in the US, with valuations increasingly volatile and disconnected from fundamentals.
Summary
Shares in Seoul-based AI infrastructure provider Elice fell 32% on their trading debut on Tuesday, according to Bloomberg, adding to concerns over valuations and returns across the AI sector. The shares fell as much as 38% intraday before closing at 61,500 won, the worst opening-day performance for a major South Korean IPO on record. The $151m offering had been priced at the top of its marketed range and attracted retail demand more than 400 times the shares available, so the sharp decline on day one has drawn attention to how quickly sentiment can shift after a heavily subscribed listing.
The selloff came despite strong reported financials. Elice posted a 200% increase in first-half revenue to 34.4bn won, an operating profit of 10.3bn won, and EBITDA that rose more than elevenfold to 23.2bn won. Analysts expect revenue to grow 83% in 2026, with an operating margin of approximately 33%, although questions remain over whether those earnings are sustainable. The company is backed by venture capital investors including Vertex Ventures and Altos Ventures, and plans to use IPO proceeds to expand its AI data centre infrastructure in South Korea and internationally.
Bloomberg attributes the decline to mounting pressure on AI infrastructure valuations amid rising borrowing costs and uncertainty over returns on large-scale capital expenditure. US-listed CoreWeave has lost more than half its value since its May peak, and its bonds fell sharply last week. Australia's Firmus Grid has abandoned IPO plans over valuation concerns, data centre operator AirTrunk has delayed a proposed listing, and Nscale has faced investor resistance over its target valuation.
Albert Yong, managing partner and chief investment officer at Petra Capital Management, said sentiment toward AI infrastructure companies had weakened, particularly in the US, with valuations increasingly volatile and disconnected from underlying fundamentals. The disappointing debut reflects growing investor scrutiny of AI infrastructure businesses, where concerns over capital intensity, leverage and profitability are weighing on the broader sector.
The selloff came despite strong reported financials. Elice posted a 200% increase in first-half revenue to 34.4bn won, an operating profit of 10.3bn won, and EBITDA that rose more than elevenfold to 23.2bn won. Analysts expect revenue to grow 83% in 2026, with an operating margin of approximately 33%, although questions remain over whether those earnings are sustainable. The company is backed by venture capital investors including Vertex Ventures and Altos Ventures, and plans to use IPO proceeds to expand its AI data centre infrastructure in South Korea and internationally.
Bloomberg attributes the decline to mounting pressure on AI infrastructure valuations amid rising borrowing costs and uncertainty over returns on large-scale capital expenditure. US-listed CoreWeave has lost more than half its value since its May peak, and its bonds fell sharply last week. Australia's Firmus Grid has abandoned IPO plans over valuation concerns, data centre operator AirTrunk has delayed a proposed listing, and Nscale has faced investor resistance over its target valuation.
Albert Yong, managing partner and chief investment officer at Petra Capital Management, said sentiment toward AI infrastructure companies had weakened, particularly in the US, with valuations increasingly volatile and disconnected from underlying fundamentals. The disappointing debut reflects growing investor scrutiny of AI infrastructure businesses, where concerns over capital intensity, leverage and profitability are weighing on the broader sector.
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