Ever wonder how public companies become publicly owned? Well, with an IPO (initial public offering) a company can use their stock to attract investors and become publicly held. Do you know one of the most highly anticipated stock IPOs of 2023?
Epic Games, the makers of the phenomenally popular video game Fortnite, have been turning heads for the past few years due to its record breaking successes, but recently it has targeted something even bigger–an initial public offering (IPO).
Epic Games Stock: When Will the IPO Come Out and Play?
Epic Games has been making headlines lately with its ambitious plans to create the metaverse. On April 13th, the company announced it had raised an additional $1 billion in funding at a valuation of $28.7 billion, with Sony adding on to prior strategic investments in Epic and providing $200 million in funding in this round.
This large funding round means Epic Games remains privately owned for the time being, but it is a clear signal of Epic’s long-term ambition.
The question now is when will Epic Games go public? The company has been spending aggressively to reach its goal of creating the metaverse, so it is likely that they will have to tap public markets in the years to come.
It is unclear when exactly this could happen, but investors should keep an eye out for any news or announcements from Epic Games regarding their IPO plans. With such a high valuation and ambitious goals, an Epic Games IPO could be one of the most exciting events on Wall Street in 2023
Here’s Why Investors Want to See Epic Games IPO
The Epic Games IPO is one of the most highly anticipated offerings in the gaming industry. With a combination of powerful software that helps companies build graphically intense games (Unreal Engine) and a development studio that’s riding high on the success of Fortnite, there are plenty of reasons to be excited about an Epic Games IPO.
The game engine, creator Unity having IPO’d in 2020 and Roblox recently hitting public markets, Epic is one of the — if not the — largest privately traded gaming companies.
Epic Games has become a major player in the gaming industry with its Unreal Engine technology and popular titles like Fortnite. The company has seen tremendous growth over the past few years, making it an attractive option for investors looking to get into the gaming space.
An Epic Games IPO would provide investors with access to a company that has already established itself as a leader in the industry and could potentially offer significant returns. Furthermore, an Epic Games IPO would also provide liquidity for existing shareholders who have been waiting for an opportunity to cash out their investments. With all these factors considered, it’s no wonder why investors are eagerly awaiting an Epic Games IPO.
Bear Case: Why pass on Epic Games’ stock at IPO?
The bear case against investing in Epic Games’ stock at its initial public offering is rooted in the company’s ongoing battle with Apple and Google. App developers have long been frustrated by the high transaction fees charged by these tech giants, but Epic Games has taken a particularly aggressive stance in pushing back against them.
In August, Epic Games created a payment system that cut Apple out of this fee in its Fortnite app, leading to the game being removed from the App Store. This was followed up by an anti-trust lawsuit alleging Apple was violating antitrust law.
This conflict poses a significant risk to investors as mobile revenue is a major driver of growth for Epic Games and helps introduce new players to their stock of video games.
However, it does not appear that Apple’s bans have had any noticeable impact on demand for Fortnite so far. Investors should be aware of this potential risk before deciding whether or not to invest in Epic Games’ stock at IPO.
When Can I Buy Epic Games’ Stock?
Epic Games’ stock remains private and, as such, non-accredited investors will have to wait until the company files for an IPO or does a reverse merger with an existing “blank check” special purpose acquisition company, or SPAC.
Unfortunately, Epic Games’ stock market debut doesn’t appear to be in the cards for 2021. Tim Sweeney has not outlined his timeline for filing for going public but Epic Games doesn’t need to take public money as private investors have stepped up to take ownership.
Tim Sweeney has been outspoken against revenue-enhancing practices he considers harmful to consumers like loot boxes and user manipulation to increase monetization. These practices are common in games owned by publicly traded companies.
Even after 30 years, Tim Sweeney holds a majority stake, pointing to the fact he likes to maintain control of his company and its operations. This could be one of the reasons why Epic Games is yet to go public and why it may not do so anytime soon.