Shares of South Korean cloud and artificial intelligence infrastructure operator Elice tumbled as much as 30 percent during its market debut on Tuesday, reflecting widening investor caution toward the capital-intensive AI sector.
Trading on Seoul’s Kosdaq exchange, the company saw its stock slide to 63,600 won, CNBC reported, well below its initial public offering price of 90,500 won. South Korean business daily Maeil Business Newspaper reported the shares changed hands at 67,000 won by midmorning after opening at 75,700 won, reaching a intraday low of 61,000 won.
Shifting sentiment hits high-flying debut
The steep first-day slide marked a sharp reversal from early appetite for the offering. Elice priced its listing on Oct. 6 at the top of its proposed range, supported by institutional orders that exceeded available shares by roughly 388 times, according to company regulatory filings and media accounts. Retail subscriptions also saw heavy engagement, drawing more than 10.2 trillion won in investor deposits, Maeil Business Newspaper reported.
However, market dynamics turned negative across the global technology landscape between the pricing date and Tuesday’s listing. Analysts pointed out that growing wariness over artificial intelligence spending has begun to weigh on valuations.
“Elice’s debut shows the AI infrastructure trade has moved from ‘build at any cost’ to ‘who is paying and for how long,’” Ke Yan, head of research at Singapore-based Shenton Research, told CNBC.
Yan noted that until research laboratories and development firms leasing server space show they can reliably finance long-term compute commitments, upcoming public offerings throughout the region are likely to face higher risk discounts.
Concerns over end-user demand have also complicated valuations for infrastructure providers. “Everyone is not sure how much demand for AI there will be and it is hard to estimate current demand,” Kiwoom Securities analyst Kim Hak-joon told CNBC.
Rising debt and compute costs
Founded in 2015, Elice began as an educational technology company focused on programming before pivoting to build full-stack artificial intelligence infrastructure, including data centers and graphics processing unit cloud rentals. Its operational profile often draws comparisons to U.S.-based cloud provider CoreWeave, which leases computing capacity directly to software developers.
While the business model fueled rapid revenue growth, it has also brought rising obligations. Elice reported that its revenue for the first half of the year tripled to 34 billion won, generating an operating profit of 10 billion won after a loss of 3.5 billion won during the prior-year period, CNBC reported. At the same time, the company’s debt surged from 5.1 billion won in 2024 to 29.8 billion won last year, driven by expanding power bills and depreciation expenses on expensive hardware, according to Maeil Business Newspaper.
Market observers noted that recent pressure on U.S. cloud infrastructure providers—fueled by heavy leverage and elevated financing costs—has chilled sentiment among Asian investors. Elice plans to channel its newly raised capital into expanding data center facilities in South Korea’s capital metropolitan region and the Honam area.
Pipeline delays spread across the region
Elice is not alone in grappling with cooling investor enthusiasm for data centers. Several related companies have recently hit pause on planned market entries, CNBC reported.
- Firmus, an Australian data center developer backed by Nvidia, decided to shelve its listing plans.
- AirTrunk, backed by private equity manager Blackstone, postponed a real estate investment trust debut in Singapore.
- SB Energy, a renewable energy and infrastructure subsidiary of Japan’s SoftBank Group, previously filed paperwork for an American listing that has stalled.
Whether upcoming enterprise listings can rebound will largely depend on whether computing customers begin demonstrating sustainable revenue from their artificial intelligence applications.
