There seems to be no stopping the Angry Birds phenomenon.
Angry Birds and its many spinoffs now boast more than 800 million downloads. Its creator, Rovio, saw its revenues skyrocket 1,000% last year to $100 million and achieved an EBITDA of $48 million. In fact, the company now appears so confident in its financials that an initial public offering could be on the horizon — either on the NYSE, or even on the Hong Kong exchange.
As seen with Facebook’s recent $1 billion deal for Instagram, the mobile space is fetching outsized valuations. Angry Birds is one of the world’s top mobile franchises, and the buzz is that it could be worth as much as $9 billion.
This might be a bit optimistic. Keep in mind that Zynga (NASDAQ:ZNGA) has a market cap of $6 billion, and that’s with sales of $1.1 billion last year. Not to mention, Zynga has a more diversified portfolio of games including CityVille, Zynga Poker, FarmVille, CastleVille, Mafia Wars, Words with Friends and Hidden Chronicles.
Angry Birds is a double-edged sword. Rovio has done a standout job with building the series’ brand, but if the company wants to continue its growth rate, it needs to find a way to lessen its dependence on Angry Birds. Consumers can be extremely fickle, especially in the gaming world, and even long-successful brands can fall off the map.
If Rovio does go public, as soon as the money raised hits the bank, it should be on the acquisition hunt to broaden its horizons.
Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “The Complete M&A Handbook”, “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli or reach him via email. As of this writing, he did not own a position in any of the aforementioned securities.
A long-time follower of the IPO scene, back in 1999 Tom started one of the first sites in the space called WebIPO. It was a place where investors got research as well as access to deals for the dot-com boom. Tom also wrote the top-selling book, Investing in IPOs. In it, he covers all the aspects of analyzing an IPO, such as reading the prospectus, detecting the risk factors and understanding some of the arcane regulations. But don’t worry — if that process is too intimidating for you, thankfully Tom will do the legwork for you right here in the IPO Playbook blog.
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