Yesterday was supposed to be a huge day for Krafton, the South Korean gaming giant behind everything from TERA to PUBG, as it launched its initial public offering. As GIbiz notes, its IPO share price was 498,000 KRW (about $430 US), but as the market opened, shares were already trading down 10%, sinking to 20% down at one point before rebounding and putting the company’s valuation at just under $20B US.
So what the heck happened? South China Morning Post attributes the rough launch to that whole “spiritual opium” thing from last week, when a Chinese state media outlet accused the gaming industry of “develop[ing] in a way that will destroy a generation,” effectively threatening the industry. The state news agency eventually retracted the article and reposted it with less antagonism, but the damage was done: It caused such a panic that Tencent’s stock lost $60B and forced it to introduce even more limitations for kids.
SCMP notes that market confidence is still down, but it also argues that Krafton is also heavily intertwined with Tencent thanks to Tencent’s large stake in the company and its publishing rights for Krafton’s games in China.
