SoftBank’s PayPay is likely to price its initial public offering (IPO) at the lower end of its projected range, as volatility stemming from the conflict in the Middle East impacts investor sentiment, according to two individuals with knowledge of the matter.
The Japanese payment app operator, offering 55 million American depositary shares priced between $17 and $20 each, had been targeting a valuation of up to $13.4 billion, according to a filing earlier this month. The order book for the IPO was reportedly oversubscribed by more than five times, and has now closed, with final pricing expected after U.S. Market hours on Wednesday.
PayPay’s planned listing on the Nasdaq, under the symbol “PAYP,” represents a significant step for the company, which has been instrumental in shifting Japanese consumer behavior away from a traditional preference for cash payments through its rebate-based app. The company currently boasts over 70 million registered users.
However, the path to IPO has been fraught with challenges. The initial roadshow was postponed following the outbreak of conflict in the Middle East, according to Reuters reporting last week. This followed a previous delay in 2023, coinciding with a U.S. Government shutdown that disrupted regulatory processes and delayed the filing of necessary documentation.
Tencent, Ant Group’s Alipay, and Alphabet’s Google have reportedly committed to invest in the IPO, though the companies have not responded to requests for comment. PayPay itself declined to comment on the pricing expectations.
The pricing adjustment reflects broader market anxieties, as investors assess the potential economic fallout from the ongoing instability in the Middle East. The situation has created turbulence for IPOs generally, with companies weighing the risks of proceeding in a volatile environment.
