Japan’s Youngest Billionaire Considers Gree Overseas Listing Amid IPO Boom
Yoshikazu Tanaka, Japan’s youngest billionaire, is considering an overseas listing of the Gree Inc. (3632) social-networking company he founded amid the busiest year for U.S. Internet-related initial public offerings since 2000.
“Numerous Japanese companies have listed overseas after doing so on the Tokyo Stock Exchange,” 34-year-old President Tanaka, owner of the nation’s second-largest networking service, said in an interview in Tokyo yesterday. “We would like to consider such an option as well.”
Such a move would allow Gree to join LinkedIn Corp. and China’s Renren Inc. among companies capitalizing on the growing investor appetite for social-media stocks. The number of Internet-related filings for IPOs in the U.S. has climbed to the highest in 11 years, according to data compiled by Bloomberg, including Zynga Inc. and Groupon Inc.
“Before Gree considers an international expansion, they should strengthen their business structure,” Yusuke Tsunoda, an analyst at Tokai Tokyo Securities Co., said by phone today. “They should also focus on the domestic smartphone market before an international expansion.”
More than 50 Internet-related companies have filed for IPOs in the U.S. this year, the most since 164 companies in the industry announced plans for initial offerings in the U.S. during all of 2000, data compiled by Bloomberg show.
An overseas listing would help Gree raise its profile outside Japan, and the social-networking site operator isn’t in need of funding, Tanaka said. The Tokyo-based company, which in April agreed to buy California-based OpenFeint Inc. for $104 million, may continue to pursue acquisitions as it seeks to expand beyond Japan, he said.
Gree slid 0.6 percent to 1,728 yen at the 11 a.m. break on the Tokyo Stock Exchange, valuing the company at $4.9 billion. The shares have gained 67 percent this year, compared with a 2.7 percent decline in the benchmark Nikkei 225 Stock Average.
Tanaka set up Gree in 2004 as a social networking service. Two years later, KDDI Corp. (9433), Japan’s second-largest mobile-phone operator, decided to invest in Gree to expand its game business. KDDI owns 7 percent of Gree shares, while Tanaka controls 48.9 percent, according to Bloomberg data.
Gree now has 25 million user accounts. It posted a profit of 4.7 billion yen ($58 million) in the year ended in March on revenue of 16.37 billion yen, according to Bloomberg data.
Zynga, LinkedIn, Pandora
“If the Japanese market shrinks, we would need to be a global company, or our business would shrink,” said Tanaka, whose wealth was estimated at $2.2 billion according to Forbes magazine’s latest list of billionaires.
Tanaka aims to boost the number of users to 1 billion. That goal “wouldn’t be unrealistic” given the number of subscribers is currently about 100 million now when combined with OpenFeint, he said.
Earlier this month, Zynga, the maker of social games including “FarmVille” and “Texas HoldEm Poker,” filed to raise $1 billion in an initial public offering, the biggest for a U.S. Internet company since Google Inc. (GOOG) in 2004.
Zynga, which leads the market for games played on Facebook Inc.’s site and other social networks, is joining the biggest wave of Internet IPOs since the dot-com heyday in 2000. LinkedIn Corp., Pandora Media Inc. and Yandex NV all went public in the past two months, and other Internet companies such as Groupon Inc. aim to benefit from the rebound with their own IPOs.
Tanaka became interested in the digital world after reading American author Alvin Toffler, particularly “Powershift,” as a junior high school student, according to Forbes.
He first browsed the Internet in 1996 while visiting the U.S. Three years later, he graduated from Nihon University with a bachelor’s degree in law, according to the company’s website. Before founding Gree, he worked at a unit of Sony Corp. and at Rakuten Inc.
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