South Korean IPO plunge deepens AI market jitters as brent tops $111
A Seoul-based neocloud provider saw its shares plummet over 30% following its IPO, signaling growing investor skepticism toward capital-intensive AI infrastructure projects. This market cooling coincided with a broader sell-off in South Korean equities and rising global energy costs as Brent crude prices surpassed $111 per barrel.
Why it matters
The sharp decline in AI-related IPOs suggests that market sentiment is shifting away from speculative growth toward concerns over high debt levels and profitability in the AI sector.
The Seoul-based neocloud provider closed at 60,500 won ($45.57), down over 30% from its 90,500 won offer price. The IPO raised $151 million at a valuation of roughly $755 million, according to Bloomberg . The slump followed a retail offering oversubscribed more than 400 times.
The weak debut accompanied another sell-off in South Korean equities. The KOSPI dropped almost 4% to finish at 5,552, with Samsung Electronics falling around 3% and SK Hynix losing roughly 4%.
Pressure has extended into U.S. pre-market trading, where CoreWeave (CRWV) fell another 3%. The neocloud sector faces scrutiny over borrowing costs, high debt levels and the profitability of capital-intensive expansion plans. Technology shares, bitcoin and gold were also lower on Tuesday morning.
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