Playtika Premiers on the Nasdaq With an $11 Billion Valuation

Playtika Holding Corp, a world-renown Israeli mobile gaming company went public on the Nasdaq Global Select Market under the ticker symbol “PLTK” on Friday, the 15th of January, after an IPO (initial public offering) at $27 per share. This IPO effectively placed the value of Playtika at a cool $11 billion upon its debut as a publicly-traded company, making it the largest Israeli gaming company listed on the Nasdaq. Morgan Stanley, Bank of America Corp, and Credit Suisse Group AG led the offering alongside Goldman Sachs Group Inc., Citigroup Inc., and UBS Group AG.

The mobile gaming company was founded by Robert Antokol and Uri Shahak back in 2010, with the duo launching operations in offices sitting above a laundromat with only 10 employees. A decade later, the Herzliya-based company is now a multi-billion-dollar brand with more than 3,700 employees and operations cutting across 19 locations in different parts of the globe. As a now, Playtika’s catalogue boasts of having a total of 35 million monthly active users thanks to its string of chart-topping social casino games such as Slotomania, Bingo Blitz, Poker Heat, and Caesars Slots.

Based on the most recent company filings with the United States Securities and Exchange Commission, Playtika’s revenue for the first three quarters of 2020 stood at $1.8 billion and the net income was $16 million over the said period. For 2019 on the other hand, the company revenue for the same period (Q1, Q2, and Q3 combined) was at $1.4 billion, generating a net income of $259 million. . Roughly 95% of this revenue comes from in-app purchases from its games. Additionally, recent reports also indicate that the company’s balance sheet has roughly $400 million, plus another $499 million that it raised on Friday and $550 million more in its line of credit.  

Striking While the Iron is Hot

In the summer of 2016, Playtika was acquired by Alpha Frontier from Caesars Entertainment Corp for $4.4 billion. Alpha Frontier is a Chinese consortium under the Giant Investment Co, an even bigger China-based conglomerate that was keen on taking the mobile gaming company to greater heights in the gaming world. In fact, this push to become a public company was slingshot by Alpha Frontier which put 18.5 million shares valued at $1.88 billion up for sale.

Per the current company filings with the U.S. SEC, billionaire Yuzhu Shi is the founder and controlling stakeholder of Giant Investment Company, and the owner of Alpha Frontier, subsequently making him the owner of Playtika as well. Mr. Shi will continue being at the helm of the group after the IPO. 

As detrimental as the Coronavirus pandemic was for a lot of global businesses, it further fast-tracked the growth of the mobile gaming market, a market that was already being augmented by the implosion of more powerful mobile devices and faster networks. According to research and analytics company SensorTower, in 2020, the mobile gaming market grew by 26% to nearly $80 billion after pandemic induced lockdowns that forced people to stay confined in their homes. On the same note, numbers from SuperData, another research group, indicates that last year, digital game revenue grew by 12% to about $127 million.

Up to 18 gaming companies including Kakao Games, Skillz Inc, and Unity Software, sized the luscious opportunity and went public after successful IPOs. On Playtika’s part, things were even more lucrative for them with their IPO venture as it was initiated at a $27 price per share, much higher than their initially projected $22 to $24 ante. Upon the Nasdaq inauguration, Robert Antokol, who is also the Chief Executive Officer of Playtika said in a statement;

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“This is the right time to go public because we want to make the next jump for our growth. The gaming space showed that it’s a very strong sector, it’s a very growing sector. Investors are already looking at the sector differently than they were a few years ago.”

The company shares recorded tremendous growth on its first day on Nasdaq, getting to highs of 34%, before settling at $31.62 apiece up 17% by end of the trading day, putting the market value of Playtika at $14.5 billion on market closure after public listing. Playtika’s IPO is now earmarked as the largest in Israeli history and the company’s value is now bigger than that of Zynga, an Ameican mobile game – whichever figure you pick on its first trading day as Zynga is worth $10.7 billion.