Doesn't look like it's been mentioned yet, but King has announced that their IPO will be valued at 7.6 billion dollars.
Mobile games, everybody!
Forgive my gross ignorance with regards to the stock market, but how does IPO valuation work, exactly? Can they just make up any deranged, wholly unjustifiable number they feel like with no limitation other than their ability to find 7.6 billion dollars' worth of investors stupid enough to believe them?
For an IPO, you pick two things: 1) your initial list price, and 2) the number of shares to sell.
The total number of shares outstanding times the share price equals your market capitalization, which is the market's opinion on the value of your company.
So, King is saying that they are going to list whatever shares at whatever starting price, which together come up to $7.6 Billion, with a B, dollahs.
If all the shares sell, and there's positive price pressure on the shares, their end-of-day-1 market cap could well exceed $7.6B.
If they don't all sell, then there'll be negative price pressure on the shares, and their end-of-day-1 market cap could fall below $7.6B.
The problem with PS4 sales in Japan is that there's very few games that actually appeal to your average Japanese gamer. You've got Killzone which is aimed at Western audiences, a bunch of multiplatform games that are aimed at Western audiences (Assassin's Creed, CoD, Battlefield, Need for Speed, Madden, etc.), and Knack which isn't really aimed at anyone (I like it for what it is, but I also got it for free). If I'm not mistaken, the only distinctly Japanese titles for the PS4 launch were a couple of PS3 up-ports.
From what I understand, gaming as a hobby has been in decline in Japan over the past few years as well. With Japanese market share shrinking significantly, there aren't as many games being made in Japan and Western games don't really sell well in Japan... whereas Eastern games do sell well in the West. It's almost xenophobic to a degree.
I wish I could find the relevant article with statistics that I read though. It was awhile back and a cursory Google search isn't finding it.
Doesn't look like it's been mentioned yet, but King has announced that their IPO will be valued at 7.6 billion dollars.
Mobile games, everybody!
Forgive my gross ignorance with regards to the stock market, but how does IPO valuation work, exactly? Can they just make up any deranged, wholly unjustifiable number they feel like with no limitation other than their ability to find 7.6 billion dollars' worth of investors stupid enough to believe them?
They set an opening number of shares and a range of prices that they expect the stock to trade at. The maximum price that they expect (they are listing at $21 to $24) times the total number of shares held (22.2M shares will be available publicly, and there are additional shares that are not going to be offered for sale) is the number that gets thrown around as the IPO valuation.
The stock valuation numbers are set by the investment banks that are underwriting the deal, and are supposed to be assessed based on the value of the company/the industry that they are in/the expected growth of the company. Obviously, it'll be configured in such a way that the underwriting bank expects to make as much money as possible on the deal. If the IPO goes as expected, King can probably expect to make upwards of $500M.
Where does the other 7.1 billion dollars go? To the investment bank? If all 7.6 billion dollars' worth of shares miraculously sell, and then six months later it becomes incredibly apparent that King has no future and is barely worth a tenth of what they claimed, does King end up seven billion dollars in debt to the bank, or does nobody lose anything except the investors whose stock is now practically worthless?
Doesn't look like it's been mentioned yet, but King has announced that their IPO will be valued at 7.6 billion dollars.
Mobile games, everybody!
Forgive my gross ignorance with regards to the stock market, but how does IPO valuation work, exactly? Can they just make up any deranged, wholly unjustifiable number they feel like with no limitation other than their ability to find 7.6 billion dollars' worth of investors stupid enough to believe them?
They set an opening number of shares and a range of prices that they expect the stock to trade at. The maximum price that they expect (they are listing at $21 to $24) times the total number of shares held (22.2M shares will be available publicly, and there are additional shares that are not going to be offered for sale) is the number that gets thrown around as the IPO valuation.
The stock valuation numbers are set by the investment banks that are underwriting the deal, and are supposed to be assessed based on the value of the company/the industry that they are in/the expected growth of the company. Obviously, it'll be configured in such a way that the underwriting bank expects to make as much money as possible on the deal. If the IPO goes as expected, King can probably expect to make upwards of $500M.
Where does the other 7.1 billion dollars go? To the investment bank? If all 7.6 billion dollars' worth of shares miraculously sell, and then six months later it becomes incredibly apparent that King has no future and is barely worth a tenth of what they claimed, does King end up seven billion dollars in debt to the bank, or does nobody lose anything except the investors whose stock is now practically worthless?
The 7.6B number is the assessed value of shares multiplied by the amount of shares that exist. So, when it's apparent that King is just another Zynga or whatever, the stock drops in price and the market cap shrinks. People who sold at lower values make money, people who bought at high values lose money. The banks underwriting the deal will certainly have leveraged it such that they make money either way.
Doesn't look like it's been mentioned yet, but King has announced that their IPO will be valued at 7.6 billion dollars.
Mobile games, everybody!
Forgive my gross ignorance with regards to the stock market, but how does IPO valuation work, exactly? Can they just make up any deranged, wholly unjustifiable number they feel like with no limitation other than their ability to find 7.6 billion dollars' worth of investors stupid enough to believe them?
They set an opening number of shares and a range of prices that they expect the stock to trade at. The maximum price that they expect (they are listing at $21 to $24) times the total number of shares held (22.2M shares will be available publicly, and there are additional shares that are not going to be offered for sale) is the number that gets thrown around as the IPO valuation.
The stock valuation numbers are set by the investment banks that are underwriting the deal, and are supposed to be assessed based on the value of the company/the industry that they are in/the expected growth of the company. Obviously, it'll be configured in such a way that the underwriting bank expects to make as much money as possible on the deal. If the IPO goes as expected, King can probably expect to make upwards of $500M.
Where does the other 7.1 billion dollars go? To the investment bank? If all 7.6 billion dollars' worth of shares miraculously sell, and then six months later it becomes incredibly apparent that King has no future and is barely worth a tenth of what they claimed, does King end up seven billion dollars in debt to the bank, or does nobody lose anything except the investors whose stock is now practically worthless?
The 7.6B number is the assessed value of shares multiplied by the amount of shares that exist. So, when it's apparent that King is just another Zynga or whatever, the stock drops in price and the market cap shrinks. People who sold at lower values make money, people who bought at high values lose money. The banks underwriting the deal will certainly have leveraged it such that they make money either way.
If the shares have a cumulative value of 7.6 billion dollars, and all the available shares have found buyers by the end of the first day, then didn't 7.6 billion dollars change hands from the investors to...somebody? Or is the value of a share independent from how much you have to pay to buy a share?
I just don't know how this universe works anymore.
it's simple. the german government reimburses movie producers when their movie does not make a profit. so uwe boll basically has a blank check to make crappy movies signed by the german people.
It's actually worse than that. The tax breaks and incentives they offer means that movies on shoestring budgets like Boll's actually end up making him millions of dollars.
Doesn't look like it's been mentioned yet, but King has announced that their IPO will be valued at 7.6 billion dollars.
Mobile games, everybody!
Forgive my gross ignorance with regards to the stock market, but how does IPO valuation work, exactly? Can they just make up any deranged, wholly unjustifiable number they feel like with no limitation other than their ability to find 7.6 billion dollars' worth of investors stupid enough to believe them?
They set an opening number of shares and a range of prices that they expect the stock to trade at. The maximum price that they expect (they are listing at $21 to $24) times the total number of shares held (22.2M shares will be available publicly, and there are additional shares that are not going to be offered for sale) is the number that gets thrown around as the IPO valuation.
The stock valuation numbers are set by the investment banks that are underwriting the deal, and are supposed to be assessed based on the value of the company/the industry that they are in/the expected growth of the company. Obviously, it'll be configured in such a way that the underwriting bank expects to make as much money as possible on the deal. If the IPO goes as expected, King can probably expect to make upwards of $500M.
Where does the other 7.1 billion dollars go? To the investment bank? If all 7.6 billion dollars' worth of shares miraculously sell, and then six months later it becomes incredibly apparent that King has no future and is barely worth a tenth of what they claimed, does King end up seven billion dollars in debt to the bank, or does nobody lose anything except the investors whose stock is now practically worthless?
The 7.6B number is the assessed value of shares multiplied by the amount of shares that exist. So, when it's apparent that King is just another Zynga or whatever, the stock drops in price and the market cap shrinks. People who sold at lower values make money, people who bought at high values lose money. The banks underwriting the deal will certainly have leveraged it such that they make money either way.
If the shares have a cumulative value of 7.6 billion dollars, and all the available shares have found buyers by the end of the first day, then didn't 7.6 billion dollars change hands from the investors to...somebody? Or is the value of a share independent from how much you have to pay to buy a share?
The money ends up in King's / King's banks' pockets, yes - assuming they all get bought. I'm not sure where @Dehumanized is getting the $500M from; it should be quite a bit more than that (though the banks underwriting the IPO will take a lot of the money, since they're on the hook if the IPO doesn't go as planned).
Afterwards, money to buy the shares changes hands between investors, and King doesn't make any money on it.
King's IPO is scheduled to be priced on March 25, two underwriters told Reuters. The stock will start trading on the New York Stock Exchange under the symbol "KING" on March 26.
Of the 22.2 million shares on sale in the offering, the company will sell 15.5 million, while stockholders, including Apax Ventures, will sell 6.7 million shares, King said.
Unlike most other tech companies that have gone public recently, King is profitable, has no debt and generated positive cash flow from operations for each of the last nine years. It posted profit before tax of $714.3 million in 2013.
In February, an average of 144 million daily active users played the company's games more than 1.4 billion times per day.
At the top-end of the planned range, the IPO will raise as much as $532.8 million, slightly more than the $500 million placeholder figure it disclosed in its first public filing in February.
Entities related to Apax will own 44.2 percent of the company following the offering, according to the IPO filing.
JP Morgan, Credit Suisse and BofA Merrill Lynch are lead underwriters for the offering.
Doesn't look like it's been mentioned yet, but King has announced that their IPO will be valued at 7.6 billion dollars.
Mobile games, everybody!
Forgive my gross ignorance with regards to the stock market, but how does IPO valuation work, exactly? Can they just make up any deranged, wholly unjustifiable number they feel like with no limitation other than their ability to find 7.6 billion dollars' worth of investors stupid enough to believe them?
They set an opening number of shares and a range of prices that they expect the stock to trade at. The maximum price that they expect (they are listing at $21 to $24) times the total number of shares held (22.2M shares will be available publicly, and there are additional shares that are not going to be offered for sale) is the number that gets thrown around as the IPO valuation.
The stock valuation numbers are set by the investment banks that are underwriting the deal, and are supposed to be assessed based on the value of the company/the industry that they are in/the expected growth of the company. Obviously, it'll be configured in such a way that the underwriting bank expects to make as much money as possible on the deal. If the IPO goes as expected, King can probably expect to make upwards of $500M.
Where does the other 7.1 billion dollars go? To the investment bank? If all 7.6 billion dollars' worth of shares miraculously sell, and then six months later it becomes incredibly apparent that King has no future and is barely worth a tenth of what they claimed, does King end up seven billion dollars in debt to the bank, or does nobody lose anything except the investors whose stock is now practically worthless?
The 7.6B number is the assessed value of shares multiplied by the amount of shares that exist. So, when it's apparent that King is just another Zynga or whatever, the stock drops in price and the market cap shrinks. People who sold at lower values make money, people who bought at high values lose money. The banks underwriting the deal will certainly have leveraged it such that they make money either way.
If the shares have a cumulative value of 7.6 billion dollars, and all the available shares have found buyers by the end of the first day, then didn't 7.6 billion dollars change hands from the investors to...somebody? Or is the value of a share independent from how much you have to pay to buy a share?
The money ends up in King's / King's banks' pockets, yes - assuming they all get bought. I'm not sure where @Dehumanized is getting the $500M from; it should be quite a bit more than that (though the banks underwriting the IPO will take a lot of the money, since they're on the hook if the IPO doesn't go as planned).
Afterwards, money to buy the shares changes hands between investors, and King doesn't make any money on it.
Who is the bank on the hook to? If King headquarters is struck by a meteorite and the company ceases to exist, it's not like the bank is obligated to pay back the investors or anything, are they? What keeps them from just pocketing the original investors' money and moving on when King turns out to be a dud?
~$500M is the 22.2M shares that they plan to sell times ~$24 per share, the money from which will go to the underwriting banks and King.
Now I'm not sure where the $7.6B is coming from; are they actually expecting the stock price to jump that much?
The article mentions Apex group (which is selling ~6M of the 22M shares) will own 44% of the company after the IPO; let's assume that that represent all of the shares outstanding (IPO + Apex = 100% of the shares). So, there'd be a total of ~50M shares of King existing. If the stock price hits ~$150 per share, that gets them to a $7.7B valuation, I guess.
I'm torn between my desire for money and my desire for mora -- who am I kidding, I am going to short that stock so hard.
Be careful, I know people thought Facebook would be an easy short and lost that bet. The question is whether the insanity of the stock lasts longer than your ability or willingness to pay dividends.
The company will have 315 million shares outstanding after the IPO, which doesn't include some potential share grants to employees. At $24 a share, that would put the company's stock-market capitalization at $7.6 billion.
315M shares * $24 is the 7.6B number. With only 22M shares offered at IPO, that represents around 7% of the company.
Doesn't look like it's been mentioned yet, but King has announced that their IPO will be valued at 7.6 billion dollars.
Mobile games, everybody!
Forgive my gross ignorance with regards to the stock market, but how does IPO valuation work, exactly? Can they just make up any deranged, wholly unjustifiable number they feel like with no limitation other than their ability to find 7.6 billion dollars' worth of investors stupid enough to believe them?
They set an opening number of shares and a range of prices that they expect the stock to trade at. The maximum price that they expect (they are listing at $21 to $24) times the total number of shares held (22.2M shares will be available publicly, and there are additional shares that are not going to be offered for sale) is the number that gets thrown around as the IPO valuation.
The stock valuation numbers are set by the investment banks that are underwriting the deal, and are supposed to be assessed based on the value of the company/the industry that they are in/the expected growth of the company. Obviously, it'll be configured in such a way that the underwriting bank expects to make as much money as possible on the deal. If the IPO goes as expected, King can probably expect to make upwards of $500M.
Where does the other 7.1 billion dollars go? To the investment bank? If all 7.6 billion dollars' worth of shares miraculously sell, and then six months later it becomes incredibly apparent that King has no future and is barely worth a tenth of what they claimed, does King end up seven billion dollars in debt to the bank, or does nobody lose anything except the investors whose stock is now practically worthless?
The 7.6B number is the assessed value of shares multiplied by the amount of shares that exist. So, when it's apparent that King is just another Zynga or whatever, the stock drops in price and the market cap shrinks. People who sold at lower values make money, people who bought at high values lose money. The banks underwriting the deal will certainly have leveraged it such that they make money either way.
If the shares have a cumulative value of 7.6 billion dollars, and all the available shares have found buyers by the end of the first day, then didn't 7.6 billion dollars change hands from the investors to...somebody? Or is the value of a share independent from how much you have to pay to buy a share?
The money ends up in King's / King's banks' pockets, yes - assuming they all get bought. I'm not sure where @Dehumanized is getting the $500M from; it should be quite a bit more than that (though the banks underwriting the IPO will take a lot of the money, since they're on the hook if the IPO doesn't go as planned).
Afterwards, money to buy the shares changes hands between investors, and King doesn't make any money on it.
Who is the bank on the hook to? If King headquarters is struck by a meteorite and the company ceases to exist, it's not like the bank is obligated to pay back the investors or anything, are they? What keeps them from just pocketing the original investors' money and moving on when King turns out to be a dud?
The bank is (more probably, banks are) on the hook to the company making the IPO. The bank makes their money based on the difference between the price the company is offering to the bank and the price the bank can get on the market for the stocks. If the stocks aren't selling, then the bank still owes the company making the IPO the price for the shares the bank is holding, so the banks can lose a lot of money if King turns out to be a dud.
Therefore, it's usually in the banks' best interest to keep the IPO price low (so that the shares sell) but not too low (to maximize any %age based fees), while it's in the company's best interest to keep the IPO price high (to maximize the money they raise) but not too high (so that the shares sell).
The company will have 315 million shares outstanding after the IPO, which doesn't include some potential share grants to employees. At $24 a share, that would put the company's stock-market capitalization at $7.6 billion.
315M shares * $24 is the 7.6B number. With only 22M shares offered at IPO, that represents around 7% of the company.
Thanks! Didn't realize they were selling such a small piece of the company.
HenroidMexican kicked from Immigration ThreadCentrism is Racism :3Registered Userregular
Angry Birds' penetration as a product in the mobile space is in the same category as WoW - freak accidents, whose success is not replicable. But people try and are willing to lose.
The company will have 315 million shares outstanding after the IPO, which doesn't include some potential share grants to employees. At $24 a share, that would put the company's stock-market capitalization at $7.6 billion.
315M shares * $24 is the 7.6B number. With only 22M shares offered at IPO, that represents around 7% of the company.
Thanks! Didn't realize they were selling such a small piece of the company.
Likely the rest were already promised to various people, who will get their payout after the IPO.
0
GnomeTankWhat the what?Portland, OregonRegistered Userregular
The company will have 315 million shares outstanding after the IPO, which doesn't include some potential share grants to employees. At $24 a share, that would put the company's stock-market capitalization at $7.6 billion.
315M shares * $24 is the 7.6B number. With only 22M shares offered at IPO, that represents around 7% of the company.
Thanks! Didn't realize they were selling such a small piece of the company.
This is actually very normal for an IPO. If you decided to sell 50% of the companies shares off, you could very easily be taken over by a hostile investor or group of investors. It only takes 10-12% shares to force your way on to the board of most companies. I've seen investors in very large corporations get board seats with only 3-5% of the shares owned.
The company will have 315 million shares outstanding after the IPO, which doesn't include some potential share grants to employees. At $24 a share, that would put the company's stock-market capitalization at $7.6 billion.
315M shares * $24 is the 7.6B number. With only 22M shares offered at IPO, that represents around 7% of the company.
Thanks! Didn't realize they were selling such a small piece of the company.
Yeah, the numbers weren't adding up for me either. Had to sift through a lot of copies of the Reuters report to find one that had the total number of shares.
After the IPO, King's ownership will be something like 44% Apax, 9% CEO, 7% publicly owned shares, and the remaining 40% belonging to King/employees/private investors.
I'm torn between my desire for money and my desire for mora -- who am I kidding, I am going to short that stock so hard.
Be careful, I know people thought Facebook would be an easy short and lost that bet. The question is whether the insanity of the stock lasts longer than your ability or willingness to pay dividends.
Yeah I watched people burn money on that (I didn't touch Facebook at all. There wasn't enough financial information available to make an informed decision), but this is going to spike hard, crash crazily, and if you time your shorting correctly, you'll be shorting right as the King insiders dump their stock and then you will need actual moneybags to go with your monocle.
By the way, Activision decided to start pushing advertising for Call of Duty: Ghosts on satellite radio. How's it doing in sales?
Not sure what it's sales numbers are, but it has been on sale for the PS4 on PSN for $40 for the past week or 2 (unless that's the new price).
I think they are trying to get people to buy Ghosts rather than Titanfall. Lots of people on this forum it seems are willing to weight for price drops, so offering Ghosts cheaper than the competition seems to be a way to keep driving sales and convince people to wait for a Titanfall price drop.
Angry Birds' penetration as a product in the mobile space is in the same category as WoW - freak accidents, whose success is not replicable. But people try and are willing to lose.
This, and the game just seems like a fad. Farmville was all the rage, now its Candy Crush Sage.
Rovio seems to be doing a good job pumping out sequels and keeping Angry Birds relevant, but most other mobile/Facebook games seem to experience a boom and then fad to obscurity as people move on to the next popular game.
+1
GnomeTankWhat the what?Portland, OregonRegistered Userregular
edited March 2014
Well Rovio did a very smart thing. They took their titular "Angry Birds" and gave them personalities and identifying features. They're not just video game birds you shoot at pigs, they are characters now. This allows them to branch Angry Birds in to whatever medium they want.
As an anecdotal example: My daughter's never played Angry Birds in her life, but she knows what Angry Birds are, and has two Angry Bird plushes (the red bird and the pig).
Well Rovio did a very smart thing. They took their titular "Angry Birds" and gave them personalities and identifying features. They're not just video game birds you shoot at pigs, they are characters now.
Well Rovio did a very smart thing. They took their titular "Angry Birds" and gave them personalities and identifying features. They're not just video game birds you shoot at pigs, they are characters now.
So is the red one the angry one?
He is the angriest one, yes, but they are all angry.
Green Throttle Games was late to the Android gaming platform party, and paid the price for it -- the company effectively wound down at the end of 2013. However, its efforts may not have been in vain. Google has confirmed to PandoDaily that it has acquired key portions of Green Throttle's business, including its parts, labor and two co-founders. The crew in Mountain View hasn't said what it will do with its new resources, but PandoDaily sources claim that Google wants to refine the Bluetooth controller for its long-fabled (and possibly gaming-focused) TV set-top box. Whether or not that's true, the move suggests that Google's interest in games is extending beyond software.
Google's got a mixed track record in hardware... Chromecast is doing well, but Google TV crashed and burned. If Google really is making a set-top box they'd better make it awesome.
Especially considering that MW3, a three year old game, still has a base price of $40.
And the entire series is practically allergic to Steam sales.
Silly as they can be, I do kind of enjoy the Single Player campaigns for the Modern Warfare games (have played through 1 and 2), however given that I generally knock them out in about 4 hours or so, my willingness to pay $30-40+ is essentially negligible, and they're generally lucky to get even 10-25% off, at least in my experience.
But apparently even the older games still sell and have some measure of a multiplayer community, so I guess they just don't see the need to cut prices if people are still buying.
Edit: well holy shit, apparently they've decided to prove me wrong. A few titles are actually on sale right now.
Modern Warfare 3 is 1/2 off ($20), Black Ops 2 is 1/2 off ($30) and Black Ops 1 is full price ($40).
... Blops 2 is cheaper than Blops 1? What?
Edit 2: furthermore, Blops is even older than MW3 and still has a base price of $40?
Whelp, maybe next year I'll catch up on a part or two of the franchise, but not at $60 for 2 games.
Forar on
First they came for the Muslims, and we said NOT TODAY, MOTHERFUCKER!
Ugh. EA just has had no fucking clue what to do with PopCap. Their game releases have slowed to a trickle of sequels, and Plants vs. Zombies 2 was such a microtransactioned mess they had to overhaul it. Though I've heard good things about PvZ: Garden Warfare. But on the other hand, PopCap's making shooters now.
Switch: 3947-4890-9293
+3
Ov3rchargeR.I.P. Mass EffectYou were dead to me for yearsRegistered Userregular
Ugh. EA just has had no fucking clue what to do with PopCap. Their game releases have slowed to a trickle of sequels, and Plants vs. Zombies 2 was such a microtransactioned mess they had to overhaul it. Though I've heard good things about PvZ: Garden Warfare. But on the other hand, PopCap's making shooters now.
I can't help but think this is the ultimate fate of every company that is bought out by EA. Suddenly I don't feel so bad about them getting the Golden Poo.
Green Throttle Games was late to the Android gaming platform party, and paid the price for it -- the company effectively wound down at the end of 2013. However, its efforts may not have been in vain. Google has confirmed to PandoDaily that it has acquired key portions of Green Throttle's business, including its parts, labor and two co-founders. The crew in Mountain View hasn't said what it will do with its new resources, but PandoDaily sources claim that Google wants to refine the Bluetooth controller for its long-fabled (and possibly gaming-focused) TV set-top box. Whether or not that's true, the move suggests that Google's interest in games is extending beyond software.
Google's got a mixed track record in hardware... Chromecast is doing well, but Google TV crashed and burned. If Google really is making a set-top box they'd better make it awesome.
If they are smart, they will farm the actual hardware out to another company. They've had great success with Asus in particular building hardware for them (see the Nexus 7).
Posts
For an IPO, you pick two things: 1) your initial list price, and 2) the number of shares to sell.
The total number of shares outstanding times the share price equals your market capitalization, which is the market's opinion on the value of your company.
So, King is saying that they are going to list whatever shares at whatever starting price, which together come up to $7.6 Billion, with a B, dollahs.
If all the shares sell, and there's positive price pressure on the shares, their end-of-day-1 market cap could well exceed $7.6B.
If they don't all sell, then there'll be negative price pressure on the shares, and their end-of-day-1 market cap could fall below $7.6B.
Steam: Elvenshae // PSN: Elvenshae // WotC: Elvenshae
Wilds of Aladrion: [https://forums.penny-arcade.com/discussion/comment/43159014/#Comment_43159014]Ellandryn[/url]
From what I understand, gaming as a hobby has been in decline in Japan over the past few years as well. With Japanese market share shrinking significantly, there aren't as many games being made in Japan and Western games don't really sell well in Japan... whereas Eastern games do sell well in the West. It's almost xenophobic to a degree.
I wish I could find the relevant article with statistics that I read though. It was awhile back and a cursory Google search isn't finding it.
Where does the other 7.1 billion dollars go? To the investment bank? If all 7.6 billion dollars' worth of shares miraculously sell, and then six months later it becomes incredibly apparent that King has no future and is barely worth a tenth of what they claimed, does King end up seven billion dollars in debt to the bank, or does nobody lose anything except the investors whose stock is now practically worthless?
The 7.6B number is the assessed value of shares multiplied by the amount of shares that exist. So, when it's apparent that King is just another Zynga or whatever, the stock drops in price and the market cap shrinks. People who sold at lower values make money, people who bought at high values lose money. The banks underwriting the deal will certainly have leveraged it such that they make money either way.
If the shares have a cumulative value of 7.6 billion dollars, and all the available shares have found buyers by the end of the first day, then didn't 7.6 billion dollars change hands from the investors to...somebody? Or is the value of a share independent from how much you have to pay to buy a share?
The money ends up in King's / King's banks' pockets, yes - assuming they all get bought. I'm not sure where @Dehumanized is getting the $500M from; it should be quite a bit more than that (though the banks underwriting the IPO will take a lot of the money, since they're on the hook if the IPO doesn't go as planned).
Afterwards, money to buy the shares changes hands between investors, and King doesn't make any money on it.
Steam: Elvenshae // PSN: Elvenshae // WotC: Elvenshae
Wilds of Aladrion: [https://forums.penny-arcade.com/discussion/comment/43159014/#Comment_43159014]Ellandryn[/url]
http://www.reuters.com/article/2014/03/12/us-king-ipo-idUSBREA2B0KP20140312
That's why I'm cheering King on. Milk this madness for all it's worth, cash out and enjoy life.
~$500M is the 22.2M shares that they plan to sell times ~$24 per share, the money from which will go to the underwriting banks and King.
Now I'm not sure where the $7.6B is coming from; are they actually expecting the stock price to jump that much?
The article mentions Apex group (which is selling ~6M of the 22M shares) will own 44% of the company after the IPO; let's assume that that represent all of the shares outstanding (IPO + Apex = 100% of the shares). So, there'd be a total of ~50M shares of King existing. If the stock price hits ~$150 per share, that gets them to a $7.7B valuation, I guess.
Steam: Elvenshae // PSN: Elvenshae // WotC: Elvenshae
Wilds of Aladrion: [https://forums.penny-arcade.com/discussion/comment/43159014/#Comment_43159014]Ellandryn[/url]
Be careful, I know people thought Facebook would be an easy short and lost that bet. The question is whether the insanity of the stock lasts longer than your ability or willingness to pay dividends.
315M shares * $24 is the 7.6B number. With only 22M shares offered at IPO, that represents around 7% of the company.
The bank is (more probably, banks are) on the hook to the company making the IPO. The bank makes their money based on the difference between the price the company is offering to the bank and the price the bank can get on the market for the stocks. If the stocks aren't selling, then the bank still owes the company making the IPO the price for the shares the bank is holding, so the banks can lose a lot of money if King turns out to be a dud.
Therefore, it's usually in the banks' best interest to keep the IPO price low (so that the shares sell) but not too low (to maximize any %age based fees), while it's in the company's best interest to keep the IPO price high (to maximize the money they raise) but not too high (so that the shares sell).
Steam: Elvenshae // PSN: Elvenshae // WotC: Elvenshae
Wilds of Aladrion: [https://forums.penny-arcade.com/discussion/comment/43159014/#Comment_43159014]Ellandryn[/url]
Thanks! Didn't realize they were selling such a small piece of the company.
Steam: Elvenshae // PSN: Elvenshae // WotC: Elvenshae
Wilds of Aladrion: [https://forums.penny-arcade.com/discussion/comment/43159014/#Comment_43159014]Ellandryn[/url]
Likely the rest were already promised to various people, who will get their payout after the IPO.
This is actually very normal for an IPO. If you decided to sell 50% of the companies shares off, you could very easily be taken over by a hostile investor or group of investors. It only takes 10-12% shares to force your way on to the board of most companies. I've seen investors in very large corporations get board seats with only 3-5% of the shares owned.
Yeah, the numbers weren't adding up for me either. Had to sift through a lot of copies of the Reuters report to find one that had the total number of shares.
After the IPO, King's ownership will be something like 44% Apax, 9% CEO, 7% publicly owned shares, and the remaining 40% belonging to King/employees/private investors.
Not sure what it's sales numbers are, but it has been on sale for the PS4 on PSN for $40 for the past week or 2 (unless that's the new price).
A week or two ago it was $30 on Amazon Digital, which is completely unheard of for a COD game (on PC) less than 6 months after launch.
Especially considering that MW3, a three year old game, still has a base price of $40.
I think they are trying to get people to buy Ghosts rather than Titanfall. Lots of people on this forum it seems are willing to weight for price drops, so offering Ghosts cheaper than the competition seems to be a way to keep driving sales and convince people to wait for a Titanfall price drop.
This, and the game just seems like a fad. Farmville was all the rage, now its Candy Crush Sage.
Rovio seems to be doing a good job pumping out sequels and keeping Angry Birds relevant, but most other mobile/Facebook games seem to experience a boom and then fad to obscurity as people move on to the next popular game.
As an anecdotal example: My daughter's never played Angry Birds in her life, but she knows what Angry Birds are, and has two Angry Bird plushes (the red bird and the pig).
So is the red one the angry one?
He is the angriest one, yes, but they are all angry.
http://www.engadget.com/2014/03/12/google-buys-green-throttle-games-assets/
Google's got a mixed track record in hardware... Chromecast is doing well, but Google TV crashed and burned. If Google really is making a set-top box they'd better make it awesome.
And the entire series is practically allergic to Steam sales.
Silly as they can be, I do kind of enjoy the Single Player campaigns for the Modern Warfare games (have played through 1 and 2), however given that I generally knock them out in about 4 hours or so, my willingness to pay $30-40+ is essentially negligible, and they're generally lucky to get even 10-25% off, at least in my experience.
But apparently even the older games still sell and have some measure of a multiplayer community, so I guess they just don't see the need to cut prices if people are still buying.
Edit: well holy shit, apparently they've decided to prove me wrong. A few titles are actually on sale right now.
Modern Warfare 3 is 1/2 off ($20), Black Ops 2 is 1/2 off ($30) and Black Ops 1 is full price ($40).
... Blops 2 is cheaper than Blops 1? What?
Edit 2: furthermore, Blops is even older than MW3 and still has a base price of $40?
Whelp, maybe next year I'll catch up on a part or two of the franchise, but not at $60 for 2 games.
I can't help but think this is the ultimate fate of every company that is bought out by EA. Suddenly I don't feel so bad about them getting the Golden Poo.
If they are smart, they will farm the actual hardware out to another company. They've had great success with Asus in particular building hardware for them (see the Nexus 7).
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