Shares of South Korean entertainment firm Pinkfong Co tumbled to as low as 33,150 won on Friday, a 13% decline from its initial public offering price of 38,000 won. The stock had initially surged as much as 62% on its Tuesday debut before losing steam as a global downturn engulfed equity markets.

“Slipping below the IPO price sends a bad signal, no doubt,” said Choi Jong-kyung, an analyst at Heungkuk Securities in Seoul. “But we’re just four days in, and the debut came on a soft market day. It’s too early to pin this on the company alone.”

Pinkfong’s IPO had raised a modest 76 billion won (US$53 million), though the debut drew intense interest as investor orders exceeded available shares more than 600 times. Pricing also landed at the high end of its marketed range.

Riding on the success of “Baby Shark,” which has been viewed more than 16 billion times, the company went public to grow its reach beyond toddlers’ screens and position itself as a full-fledged media studio capable of producing big hits.

Investors had bet the IPO proceeds and a public listing would turn Pinkfong into the next big trade amid global interest in Korean entertainment fuelled by K-pop giants like BTS and Blackpink.

But some have started questioning the company’s valuation and ability to replicate prior success, saying further gains in the stock depend on its ability to create more characters and monetise them effectively.

Despite the setback for Pinkfong, Choi said this event is unlikely to cast a shadow over future listings. “Plenty of stocks have soared well above their offer price. And for next year, when AI will steal the spotlight, there is a flood of related companies lining up to go public.”