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LG Energy Solution made its much anticipated public market debut in Korea overnight, as the global battery leader reached a ~$100b valuation. With an IPO price of 300k krw, shares reached as high as 560k krw before closing at ~500k krw on the day. It's a curious case of corporate finance, as the ~$100b LG Energy Solution remains 82% owned by LG Chemical (OTCPK:LGCLF), a company with a market capitalization of ~$36b.
With customers like General Motors (NYSE:GM), Tesla (NASDAQ:TSLA), Volkswagen (OTCPK:VWAGY) and others accounting for ~20% of global EV market share, the newly traded business is primed for growth. Just last week, the Company announced plans to build a $3.5b plant in the US, alongside JV partner Honda (NYSE:HMC). However, the IPO has not been without drama.
LG Energy was the sole supplier of GM's Chevy Bolt battery, a product that has led to one of the industry's largest recalls. As a result, the Bolt has been out of production for months and led commentators to speculate that production of the budget-conscious EV may never return. For its part, LG Energy Solution will pay GM $1.1b in compensation for the defective batteries.
With the Korean Kospi index (KOSPI) in a bear market, LG Energy Solution has been a uniquely positive story. It remains to be seen whether LG Energy Solution will benefit from fervent investor attitudes towards EVs, or the more cautious investor attitudes surrounding Korean equities.