Elice shares plunge 32% in debut as AI concerns grow

Shares in South Korean AI infrastructure provider Elice fell as much as 38% before closing at 61,500 won on Tuesday. The decline marked the worst opening-day performance for a major South Korean initial public offering on record.

Elice raised $151 million in an offering priced at the top of its marketed range. Retail investors placed orders for more than 400 times the number of shares available, but the demand did not prevent a selloff when trading began.

The decline came amid investor concerns about the returns data center operators can generate from large capital spending projects. Higher borrowing costs and uncertainty over demand and profitability have increased pressure on companies that provide infrastructure for artificial intelligence.

Albert Yong, managing partner and chief investment officer at Petra Capital Management, said sentiment toward AI infrastructure companies had weakened, particularly in the United States. He said valuations had become more volatile and less connected to underlying financial performance.

Other companies in the sector have also faced pressure. US-listed CoreWeave has lost more than half its value since reaching a peak in May, and its bonds fell sharply last week. Australia’s Firmus Grid abandoned plans for an initial public offering because of valuation concerns. Data center operator AirTrunk delayed a proposed listing, while Nscale has faced investor resistance to its target valuation.

Elice reported strong recent financial results. First-half revenue rose 200% to 34.4 billion won, while operating profit reached 10.3 billion won. Earnings before interest, taxes, depreciation and amortization increased more than elevenfold to 23.2 billion won.

Analysts expect Elice’s revenue to increase 83% in 2026 and estimate an operating margin of about 33%. The forecasts put the focus on whether the company can maintain its growth and profitability while expanding its infrastructure.

Elice is backed by venture capital firms including Vertex Ventures and Altos Ventures. It plans to use the IPO proceeds to expand its AI data center infrastructure in South Korea and overseas.