Pinkfong, the South Korean children’s entertainment company behind the Baby Shark phenomenon, saw its share price soar on its stock market debut on Tuesday (November 18), before falling back down to close 9% above its IPO price.
The company’s stock, which is now trading on South Korea’s small-cap Kosdaq market, jumped to 61,500 won (USD $42) in intraday trading, marking a nearly 62% jump from its opening price of KRW 38,000 ($26). It ended the trading day at KRW 41,550, up about 9.4%.
Ultimately, the IPO raised $53 million, with demand for the stock at one point 600 times higher than the available shares, Bloomberg reported.
It comes in the wake of a series of successful listings on the Kosdaq, analysts told Reuters.
Baby Shark, which has been irritating parents since 2016, is the most-watched video on YouTube of all time, with more than 16 billion plays. The track has been Diamond-certified by the RIAA in the US, and 5x Platinum-certified by the BPI in the UK. It has just short of 1 billion streams on Spotify.
Pinkfong leveraged Baby Shark’s success to create a Baby Shark TV show, Big Show! (co-produced with Nickelodeon Animation Studio), and to create new characters like Bebefinn and Sealook. Bebefinn is now a larger content revenue generator than Baby Shark, Bloomberg reported citing Pinkfong CEO Kim Min-seok.
Now Pinkfong – which signed a publishing deal with Sony Music in 2020 covering its entire children’s music catalog – aims to expand into entertainment for older kids and teens as well, Forbes reported. Its IPO prospectus said it aims to create three new IPs by 2028. The company also aims to open pop-up stores worldwide.
Kim co-founded the company in 2010 with Son Dongwoo, now Pinkfong’s Chief Technology Officer. Kim’s father is known as the head of Samsung Publishing, which owned 16.8% of Pinkfong prior to the IPO, per Bloomberg. Kim himself held 18% of Pinkfong prior to the stock market debut.
Whether or not the company’s rising stock price can maintain momentum will depend on future earnings performance, Zian Investment Management CIO Kim Dojoon said.
“The key will be how effectively the company can monetize its existing IPs — Baby Shark, Bebefinn — and how well its new IPs perform.”
“Their top-line growth and profits next year will be driven by licensed and merchandise goods sales of their popular IP products…”
Korea Investment & Securities
Pinkfong clocked an operating profit of KRW 18.8 billion last year, equating to $13.8 million at the average exchange rate for 2024. Its revenues came in at KRW 97.4 billion ($71.4 million).
Analysts at Korea Investment & Securities expect Pinkfong to post stable revenue growth on the back of international expansion and IP diversification.
“Their top-line growth and profits next year will be driven by licensed and merchandise goods sales of their popular IP products even if their profit growth slows this year due to increased expenses,” they wrote, as cited by the Financial Times.Music Business Worldwide
