If you or your friends own a smartphone, the chances of it possessing the Angry Birds application seem pretty high. Creators of the popular mobile application, Rovio (founded in 2003), have found even greater success through their recent addition Angry Birds Space, becoming the fastest growing mobile game downloaded surpassing 50 million downloads. With this in account, it is not surprising to find out that Rovio has plans for a possible IPO in 2013.
According to International Business Times, CEO Mikael Hed told his shareholders the company has increased its 2012 revenues 10-fold to $100 million with 800 million downloads including 200 million users as of December. The company reported 2011 profits of $48 million before tax with a 64% margin that was up from $10 million in 2010.
It seems the company is off to a bright future – analysts are valuing it for as much as $9 billion. Rovio also raised $42 million from venture capitalists including firms such as Accel Partners and Atomico Ventures.
Although an IPO is set for the future, a question to be raised is if Rovio will find success where Zynga did not. Zynga’s stock, posted at $10 for its initial offering, has experienced a 52-week high of $15.91 and low of $7.95. Though it raised $1 billion in its IPO, concerns about the mobile games longevity come into play for investors. If there is any sign of a lull in the gaming industry, Rovio and Zygna’s stock will take a significant hit.
Business Section: Investing Ideas
Rovio is highly valued by analysts and has experienced significant increases in the profits with their Angry Birds game in comparison to other mobile game competitors.
Does Rovio possess the sustainable value needed to continue their success in games?
Use Kapitall tools to analyze companies’ creating mobile games. Will investors be hesitant to buy Rovio stock based on their observations with Zygna or will the company beat expectations?
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1. Electronic Arts Inc. (EA, Earnings, Analysts, Financials): Develops, markets, publishes, and distributes game software and content for video game consoles, personal computers, mobile phones, tablets and electronic readers, hand held game players, and the Internet. Market cap at $5.01B, most recent closing price at $13.96.
2. Glu Mobile, Inc. (GLUU, Earnings, Analysts, Financials): Engages in the design, marketing, and sale of casual and traditional mobile games worldwide. Market cap at $265.1M, most recent closing price at $3.99.
3. Zynga, Inc. (ZNGA, Earnings, Analysts, Financials): Develops, markets, and operates online social games as a live service played over the Internet, through social networking sites and on mobile platforms. Market cap at $6.14B, most recent closing price at $8.08.
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- Electronic Arts Inc. (EA, Chart, Download SEC Filings)
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