South Korean data center company Elice closed its first trading day down over 30% from its initial public offering price, adding to growing skepticism about artificial intelligence infrastructure investments and their ability to generate adequate returns.
Elice, a Seoul-based neocloud provider, debuted at 60,500 won ($45.57), compared to its 90,500 won offer price. The IPO raised $151 million at a valuation of roughly $755 million, according to Bloomberg. Despite retail demand exceeding 400 times the available shares, the stock failed to hold its offering level.
The weak debut reflected broader pressure on South Korean equities. The KOSPI index fell almost 4% to close at 5,552, with major semiconductor stocks leading declines. Samsung Electronics fell around 3% and SK Hynix lost roughly 4%.
Weakness extended into U.S. markets ahead of the open. CoreWeave, another neocloud provider, slipped another 3% in pre-market trading. The neocloud sector faces scrutiny over rising borrowing costs, high debt levels, and questions about whether capital-intensive expansion plans will prove profitable.
Technology shares, bitcoin, and gold also traded lower Tuesday morning. In energy markets, Brent crude topped $111 a barrel—its highest level since May—while WTI traded around $100. The roughly $11 Brent premium reflected persistent concerns about Middle Eastern supply disruptions and shipping risks.
