SEOUL, South Korea — Krafton, a South Korean video game company, lowered its initial public offering price range by more than 10% on Thursday and postponed its IPO, yielding to regulators’ demand to fix the value. Krafton, the company behind PlayerUnknown’s Battlegrounds, or PUBG, has announced that its initial public offering (IPO) price will be reduced to a range of 400,000 won ($353) to 498,000 won, down from a previous range of 458,000 won to 557,000 won. The number of shares to be raised was also reduced from 10.1 million to 8.7 million. With the modifications, Krafton’s IPO is estimated to bring in 4.3 trillion won, down from 5.6 trillion won previously, which was supposed to be South Korea’s largest-ever IPO. The news came a week after the Financial Supervisory Service ordered that Krafton revise and resubmit its registration paperwork, throwing the company’s valuation into question. Krafton calculated this against 259 global competitors, including Walt Disney, NetEase, and Activision Blizzard. However, it settled on four South Korean rivals for its final comparison: NCSoft, Netmarble, Kakao Games, and Pearl Abyss. “We added specific details to the registration document,” Krafton said in a statement, emphasizing its “globally acknowledged intellectual property” in the form of PBUG. “Based on our success story in the worldwide market, Krafton will continue to make efforts and innovations to be born again as the top entertainment company,” the statement stated. In addition to the modification, the company has postponed its IPO until August. On the 2nd and 3rd of August, Krafton will accept investor applications for shares. Krafton founder and Board Chairman Chang Byung-gyu will be the largest shareholder after the IPO, with 14.4 percent, followed by Image Frame Investment, a subsidiary of China’s Tencent Holdings, with 13.6 percent, according to Krafton. Chang, on the other hand, has sympathetic investors on his side, including his wife Chung Seung-hye, who owns a combined 16 percent of the company. Along with Naver founder Lee Hae-jin and Nexon founder Kim Jung-ju, Chang, 48, is a member of South Korea’s first generation of Internet startup entrepreneurs. In the 1990s, Chang studied computer engineering at Korea Advanced Institute of Science and Technology before founding Neowiz in 1997. Chang established Krafton’s success by launching a number of games, including Tera and PUBG. He vowed in May that he would contribute up to 100 billion won of his investment to employees. At the time, the IPO was projected to propel him into the ranks of South Korea’s top billionaires, with his stock holdings valued at around 3 trillion won. According to the refiled registration paperwork, Chang controls 7 million shares in Krafton, or 16.2 percent of the company. That would be worth between 2.8 trillion and 3.5 trillion won based on the revised IPO pricing range./n
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