Content supplier Games Global Limited has canceled its planned initial public offering and will wait for a better moment to begin trading publicly on US markets. The Board of Directors says it believes it’s in the best interests of existing stakeholders to delay the IPO despite sensing interest from public investors. That may be due to the overall economic climate at the moment. It says the company does not need immediate cash and can afford to wait.
Games Global announced its plans to go public in April, making 14.5 million shares available. It planned to sell six million new shares; the remainder would represent private investors’ existing stake in the company. The IPO price would have been between $16 and $19 per share. Walter Bugno, CEO of Games Global, says the company remains committed to delivering innovative games. He added that the company would monitor the market and consider an IPO again when the time was right.
While we are disappointed not to be entering the public markets in the near term, meeting with investors during this IPO process has further cemented our confidence in our strategy and that what we are building at Games Global is unique. With a strong balance sheet, healthy margins, and meaningful growth, an IPO at this point in time was an accelerator, not an absolute necessity, for our business strategy.
The company says a registration statement regarding the IPO has been submitted to the US Securities and Exchange Commission (SEC) but has yet to become effective.
IPO Would Buck Industry Trend
Games Global’s plan to go public stood out against the overall trend in the gambling industry, which has recently been in the opposite direction. Between 2019 and 2022, gambling companies were racing to go public, but many are now seeking to go private and escape shareholder pressure. Many gambling companies have experienced a boom-and-bust cycle in their share prices due to the stalling of the previously rapid expansion of legal gambling options across the US.
Few states have authorized new forms of gambling recently, and existing markets have started to slow as they mature. Investors had high expectations for continued growth and pushed gambling stocks to highs that later proved unsustainable. With share prices down, the time is right for acquisitions, and several companies have leaped at the relative safety of private ownership.
Most recently, that includes PlayAGS, which just announced that it had accepted a $1.1 billion offer from Brightstar Capital. Others, such as Bragg Gaming and Rush Street Interactive, are also exploring their options and seeking potential buyers.
Bally’s recent financial struggles have triggered a second buyout offer by minority stakeholder Standard General. However, it won’t likely go through. That’s because another of Bally’s minority stakeholders slammed the company’s board and asked it to reject the $15-a-share offer. In an open letter, K&F Growth Capital said Bally’s accepting the proposal goes against shareholders’ interests.
As a private company, Games Global hasn’t tasted that kind of investor pressure yet. However, it’s no secret that market sentiment is pessimistic at the moment. It makes sense that it has changed its mind about wanting to enter the market at this time, especially if it’s under no immediate pressure to do so. In its F-1 Form filing with the SEC, Games Global showed €306.9 million ($332.1 million) in revenue for the year ending March 2023. That was over an 82% increase from the previous year ending March 2022.
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