South Korean IPO flop is the latest in a string of disappointments for the global AI trade

By Jules Rimmer

Cloud services provider Elice plunges over 30% in its debut

Data-center operators are getting a chilly reception from investors.

On Tuesday, Korean cloud services provider Elice made its debut on the Seoul exchange. Despite being 389 times oversubscribed, the 201 billion won ($150 million) IPO ended 32% lower.

Despite being almost 400 times oversubscribed and pricing at the top of the range, Elice shares plummeted instantly on the open.

The Elice (KR:0158S0) flop is the latest in a series of setbacks this month for the artificial-intelligence trade after three other companies in the data-center sector were recently forced to cancel or postpone their plans to float, emphasizing how much momentum the investment theme has lost.

In Singapore, data-center operator Air Trunk, backed by Blackstone Inc (BX), shelved its $1.5 billion flotation, as did Australia's Firmus, backed by Nvidia (NVDA) which was hoping to raise $30 billion. SoftBank (JP:9984)-backed SB Energy, another data-center play, delayed its $50 billion Nasdaq listing.

"You can always tell a weak group when some company in its cohort you never heard of, Elice, flops in its Korean IPO and it brings down the stocks of other companies simply because it was a terrible deal," said Jim Cramer, the CNBC host and fund manager, in a message on the X social-media service.

Meanwhile, investors are still waiting for the initial public offerings of frontier model makers Anthropic and OpenAI.

Investors are increasingly questioning the sustainability of the capex cycle and whether sufficient returns can be derived from the initial investment, given the huge sums involved. Consensus for AI capex in 2026 is around $800 billion while numbers double that are regularly thrown around for 2027.

The Kospi KR:180721 benchmark index is now down about 40% from its all-time high set in June. Its two index heavyweights and AI hardware plays, SK Hynix (KR:000660) and Samsung (KR:005930), have suffered similar declines, and sentiment among domestic investors has been hurt by a painful deleveraging process amid equity market weakness.

An eight-day losing streak for the Philadelphia Semiconductor Index exchange-traded fund SOX that only ended on Monday, was also illustrative of the dismal trading conditions for the stocks regarded as the picks and shovels of the AI build-out boom.

Plummeting by nearly a third, the Elice debut is the worst ever in Korean stock-market history, according to Bloomberg.

The company buys Nvidia chips, puts them in data centers and rents that computing power by the hour. It recorded an operating profit of 10.3 billion won in the first half of 2026 and revenue of 34.4 billion won.

When priced at the top of the range, its valuation of just over 1 trillion won implied a price-to-sales multiple of around 15 times, a significant premium to the Korean market and emerging markets overall.

-Jules Rimmer

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10-20-26 0531ET