The year 2021 has already been witness to many IPOs including some big names from the gaming industry. Notable names among the gaming industry include Playtika, Applovin, and Roblox. The gaming industry is booming with new investors and market strategists who want to be a part of the gaming revolution. Particularly the onset of the COVID 19 pandemic has opened a doorway of possibilities for the gaming industries.
While many sectors of employment have suffered heavily during the pandemic, gaming has thrived and evolved for the better. There are only a few things one can engage in amidst a lockdown, and gaming is certainly top of those things. Thanks to robust internet connectivity and networking, people have engaged in sincere gaming and paved the way for a big boom in the gaming industry.
The increasing boom of mobile gaming, thanks to the pandemic and lots of idle time, has heavily affected the gaming industry. Almost more than 50 percent of people are playing on their smartphones. Most of these gamers are actually of much older age groups. Irrespective of the nature of the games, mobile gaming has thrived heavily in the last few years. This has contributed to a great deal of market realization of many gaming companies. With bigger predictions in mind, the gaming companies look forward to expanding their business and customer base throughout the world. The best way to achieve such goals is to accept funding from market investors. With this idea, many big and small gaming companies have started listing for IPOs.
What is an IPO?
An IPO is an abbreviation for Initial Public Offering. Initial Public Offering means a private company is going public or offering its share for sale. It actually refers to the process of going public for a private company by selling some portions of their share to the market. Thus post IPO, a private company will be known as a public company hereon.
Mostly the institutional investors or retail investors buy the stocks of these companies and aim to make some profit out of the expansion. The detail of an IPO can be accessed by the investors from the prospectus released by the company after the first sale. After the IPO is concluded the shares of the company are listed for open trading. The gaming industry has seen some very promising IPOs over the years. With the gradual expansion of the market, more numbers of IPO listings can be found.
Why do private gaming companies want to go public?
The main purpose of an IPO is to help the company expand and earn more from the market. By going public, the gaming companies acquire more capital from the market which they use for their expansion and also for developing newer and more engaging content. With increased sales and revenues, more investors will be eyeing up the shares of the company. In this way, the gaming industry will be booming with investors and expansions. This will also help the gaming company to gain significant value in the market and compete with bigger brands and publishers.
IPO of Playtika
| Trading starting date | JANUARY 15 2021 |
| IPO price | $27 |
| IPO valuation | $11 billion |
Playtika is an Israeli mobile gaming company known mostly for its famous casino titles. The popular games under this brand include Pirate kings, Solitaire Grand harvest, Bingo Blitz, and Poker Heat. In 2010, Robert Antokol and Uri Shahak founded the company. The very next year the company was bought by Caesars Entertainment Corporation. The company filed for IPO at the start of this year. The market cap of Playtika was evaluated at $11 billion. The initial few months after the IPO was mostly positive for Playtika.
Playtika was always known for its gaming expansions and acquisitions of other companies. It was acquired by a Chinese company back in 2016 which had Investments from Alibaba founder Jack Ma as well. After that Playtika went on to acquire quite a few gaming titles over the next few years. It adopted a more diversified approach in its expansion and took over Berlin-based company Wooga. Playtika also acquired Supertreat and Seriously. Thanks to these acquisitions, Playtika featured multiple titles in both Iphone’s and Android’s top 100 games list.
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In the first three quarters, Playtika had a rise in their revenue by 28 percent. The revenue climbed to around $1.8billion thanks to contributions from Apple, Google, and Facebook. Playtika announced the pricing of its IPO on January 14 and Opened the IPO on the next day (January 15). The stocks were valued at $27.00 per share for the public. The IPO consisted of around 69,500,000 stocks of Playtika as common stock. Out of these, around 18,518,500 were Playtika’s common stock. The rest was offered by various stakeholders who will receive the direct profit of their share of stock. The shares were traded on the Nasdaq Global Market as PLTK. The lead book-runners of the offering were Morgan Stanley and Credit Suisse. The stock price remained mostly at high but dipped down a bit lately. It closed on $24.40 on 25 June.
IPO of Roblox
| Trading starting date | MARCH 10 2021 |
| Reference price | $45 |
| Valuation | $30 billion |
Roblox is another big name in the gaming fraternity that went public in 2021. Like Playtika, Roblox also announced its IPO at the beginning of the year. Roblox is an online gaming platform created by Roblox Corporation. It serves as an app that holds multiple gaming titles from various publishers. The gaming platform is very famous and used by multiple kids across the world especially in the US. The platform also facilitates in-game purchases in the form of virtual currency Robux. Owing to the COVID 19 pandemic, app usage of Roblox has shot up by more than double. This has led to a promising start to its direct listing on March 2021.
Roblox reported around 91 percent market growth in the third quarter of last year. Naturally, when it announced going public, there was a lot of enthusiasm among the investors. The company is literally booming in terms of revenue courtesy of multifold app usage in the pandemic. Roblox started the listing with a market valuation cap of $30 billion. The price of each stock was kept at $45 at the start of the direct listing. Given the amount of profit the company cashed in last year, Roblox’s public appearance was more than anticipated by many. After the start of the listing, the stock price surged up more than 43 percent. When the market closed on 25 June, the stock price of Roblox stayed at $87.00.
IPO of Applovin
| Trading starting date | APRIL 15 2021 |
| IPO price | $80 |
| IPO valuation | $28.6 billion |
Applovin is a Silicon Valley mobile game maker who started as mobile advertisers and app discoverers. The Applovin Corporation is headquartered in California. The company is also known to have large investments In various mobile game publishers. Applovin acquired Machine Zone and invested in mobile game studios Geewa in 2020. They targeted raising over $100 million by filing an IPO in March 2021. Like Playtika, Applovin also hired Morgan Stanley to lead the book-runners in the IPO.
Applovin’s IPO started on April 15, 2021. Initially, its price per share was kept at $80 for the public. Applovin filed the IPO with a valuation of $28.6 billion. Unlike Playtika and Roblox, the initial response to Applovin’s IPO was mostly negative. On the first day of trading only, Applovin’s stock opened much below its IPO price. The stock price eventually went up in May and June when it reached the $80 mark. Applovin’s stock price was $84.86 during the time of its close on June 25.
Upcoming Possible IPOs of 2021
Following the footsteps of Playtika, Roblox, and Applovin, many companies have expressed the desire to go public in the upcoming months. Popular gaming studio Krafton made one of the biggest announcements, they are looking to raise $5 billion by IPO. Other popular game makers like Scopely, Niantic, and Jam City are expected to go public later this year. With the booming gaming market following the COVID 19 pandemic, more companies are expected to go public looking for expansions.
