Indignant Birds, offended traders: Rovio shares fall 20%


The maker of Indignant Birds has upset traders with its first earnings report as a public firm.

Rovio shares fell over 20% on Thursday to commerce at €9.45 ($11.20) on the Nasdaq Helsinki. That is effectively under their IPO price of €11.50 ($13.60) from October.

The Finnish gaming agency mentioned in its outcomes that gross sales have been up 40% within the third quarter.

However prices additionally elevated dramatically, with €22.2 million ($26.three million) being spent on a drive to draw new customers.

The splurge — which was 4 instances greater than the identical interval in 2016 — reduce into the agency’s earnings.

Rovio posted a €500,000 ($600,000) loss earlier than tax within the quarter, in comparison with earnings of €four.6 million ($5.four million) final 12 months.

Buyers weren’t happy. However Jack Kent, principal cell analyst at IHS, mentioned Rovio was proper to put money into securing new customers.

“Such a transfer is important for Rovio’s long run technique to enhance the general monetization of its video games, [an] space by which it had lagged behind its rivals regardless of robust obtain success,” he mentioned.

Related: Angry Birds IPO fails to take off

Indignant Birds has been downloaded over three.7 billion instances. However traders are anxious about Rovio’s skill to churn out new hit video games.

Different gaming firms function cautionary tales.

King Digital Leisure, the corporate behind Sweet Crush, was bought final 12 months by Activision for $18 a share — 20% bellow its IPO worth.

The 2011 IPO of Zynga, the maker of video games like Phrases with Buddies and FarmVille, has additionally turned out to be a disappointment. The corporate didn’t ship fashionable new video games and misplaced hundreds of thousands of customers. Its share worth has fallen from $10 to roughly $four.

CNNMoney (London) First revealed November 23, 2017: eight:19 AM ET





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Indignant Birds, indignant buyers: Rovio shares fall 20%