As we all know, this year's U.S. stocks are affected by all kinds of macroeconomic indicators, there has not been a long time to make the stockholders' heartbeat offer.
The number of IPOs is pitifully low and the quality is a cause for concern. I have also a wait-and-see attitude, however, today I found a game company that is about to go public.
SNAIL GAMES maybe this year's U.S. IPO dark horse, a comprehensive judgment down to feel a great chance of winning.
Why Snail, Inc.?
First of all, the company's products are performing brightly.
Snail Games, an independent game developer and publisher, released its flagship game Ark: Survival Evolved with Studio Wildcard to great acclaim in 2015.
Many readers should have played this famous sandbox game, ranking in the top 25 of all game genres on the Steam platform, with total installations already exceeding 76.5 million units. In the first half of 2022, the DAU on Steam and Epic platforms alone reached 395,000, with an all-time DAU peak of over 755,000.
Of course, the company has more than 20 games in addition to this, Last Oasis, ATLAS and so on are his family, both scale and diversity, the business layout is very stable.
Secondly, the company has the technology and imagination.
The company is developing a proprietary engine, Flexi, which will allow it to integrate all its games into this engine and provide content creators with a support platform that includes many templates.
For example, those desert maps that appear in the game, are familiar to you? Yes, this is the metaverse concept. Players will be able to move to a desert planet, set up their own unique gameplay there, and create their own game assets.
Although many companies say they are meta-universe concept, if you think back, sandbox games should be the closest to the meta-universe concept that exists, right? And this company has been working on it for 8 years, and the concept and space are solid.
The third aspect is revenue diversification and substantial cash flow.
The company has a compound annual growth rate of 11.2 % from 2019 to 2021. Revenues are also evenly split between console and PC, with multiple platforms already commercialized. Geographically, 88% of revenue comes from the US, avoiding China's version restrictions, and the market space is also very large.
Then talk about my ideal company valuation. The game industry listed has been quite a few, $NetEase(NTES)$, $TENCENT(00700)$, $Sony(SONY)$, $Activision Blizzard(ATVI)$, $Take-Two(TTWO)$ and last year on a $Roblox Corporation(RBLX)$.
Simply look at their price-to-sales ratio valuation multiples basically in 3.5 times to 7 times ranging, the average can reach 4.5 times. So look at the valuation of the snail game is also very reasonable.
Finally, and most critically, the certainty is high.
The current market conditions, the success of the issue has been very difficult, those issuing F-1 (foreign issuer) of many Chinese stocks are stuck in communication with the SEC and the exchange stalled.
The company is a U.S.-based company, with 88% of its business revenue coming from the U.S., and the form is also an S-1 (prospectus for a U.S.-based company). The probability of being affected because of all the regulatory issues is greatly reduced, and breaking out of the fence shows that the company is of high quality.
In addition, I went through their first version of the prospectus, the underwriters are the big-name Bank of America Securities and Citibank. Their quality control of the project is at least the size and quality of a medium to large IPO, and the preliminary work done is certainly sufficient, which is also considered a backing.
If you are interested in this company, click here for S-1.
What's your opinion on this IPO?
Will you buy the new company?
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