TOKYO -- Shares in online flea market operator Mercari soared in the company's debut on Tuesday, shrugging off a broader decline in Japanese stocks and underscoring strong demand for one of the country's hottest unicorns.
The Tokyo-based company's stock opened at 5,000 yen, 67% higher than the offering price of 3,000 yen, before climbing further and closing the day at 5,300 yen.
At one point during trade, Mercari's market cap hit 811.9 billion yen ($7.44bn), eclipsing McDonald's Holdings Japan to become the highest-valued company in the small- and mid-cap Jasdaq and Mothers markets. It ended the day at 717.2 billion yen.
“Mercari has been extremely popular among retail investors, who are familiar with the brand and like its growth strategy,” said Tomoichiro Kubota, senior market analyst at Matsui Securities. “Its large market cap also means institutional investors are adding the stock to their portfolios.”
Meanwhile, the benchmark Nikkei 225 index fell 1.8% on Tuesday amid concerns over rising trade tensions between the U.S. and China, while the yen rallied against the dollar.
The Mercari app connects sellers and buyers of secondhand goods, including seemingly useless ones like toilet paper cores and nearly depleted bottles of perfume. Since its 2013 debut, the app has racked up 71 million downloads domestically as of March 2018, thanks to its ease of use and ability to let users conduct transactions anonymously.
The company raised 54.4 billion yen from the IPO, the largest in Japan this year. The debut was also the biggest in the technology sector since messaging app operator Line floated its shares in July 2016.
Tokyo-based United, an early investor in Mercari, recently said it will book a 12.6 billion yen operating profit by selling part of its stake.