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Wondering what everyone's thoughts are regarding Playstudios merging with ACAC. Seems to have oddly dropped below even where it was when it was in the rumour stages. Here are some of the investment notes I've gleaned from my research. submitted by GullibleInvestor to SPACs [link] [comments] Please help provide more bear (or bull) cases if possible! Summary ⦁ Online gaming company with major backing and investments from MGM Group, Blackrock, Activision Blizzard, and Neuberger Berman ⦁ Playstudios' game profiles include: myVEGAS Slots, POP! Slots, myKONAMI Slots, myVEGAS Blackjack, and Kingdom Boss + myVEGAS Bingo coming soon ⦁ >100M lifetime app downloads ⦁ 4.2M monthly active users From PlayStudios investor deck ⦁ 56 minutes playtime/day (more than TikTok, YouTube, etc. as per Skillz' research), fairly comparable to Skillz as well (their data below) Skillz data on minutes per user per day - Playstudios is 56 minutes/day ⦁ Unique loyalty rewards program that engages sticky user base by providing free rooms, meals, drinks, at many Las Vegas resorts such as Bellagio, Aria, MGM, Luxor, Mandalay Bay, etc., as well as exclusive gambling room access in select casinos ⦁ Valued at $1B enterprise value at NAV ⦁ Using capital injection to develop new apps, M&A with other gaming companies Bull Cases ⦁ SPAC Management group is quite stacked and very heavy on online gaming, and gambling sectors ⦁ Co-CEO Edward King has experience at Morgan Stanley as Managing Director and Global Head of Gaming Investment Banking ⦁ Co-CEO Dan Fetters also has experience at Morgan Stanley as Managing Director of M&A ⦁ EVP of Acquisitions Chris Grove is a partner at Eilers & Krejcik Gaming ⦁ Chairman Jim Murren former CFO, Chairman, and CEO of MGM for over 20 years (12 years as Chairman, CEO) and led the recovery of MGM post-financial crisis. Currently also Chairman of COVID 19 Response in Neveda ⦁ Other Board members include the President and CEO of the Boston Red Sox and Chief Exec. of Fenway Sports Management, Senior VP of Monumental Sports and Entertainment, former CEO of ShooWin, and FoundeCEO of Sydell Group (lifestyle hotel chain) ⦁ Playstudios exec. team also all have long history of gaming, and gambling sectors ⦁ TAM of mobile gaming only set to continue to grow YOY ⦁ Loyalty program appears to be very sticky for Vegas visitors, as well as offering a clear value add for even non-gamers to participate (free drinks, hotel stays, etc.), and causing a virtous cycle from user app engagement -> real-life reward redemption -> resort app offers -> and back Virtuous Cycle - from PlayStudios investor deck ⦁ Undervalued in terms of PS ratios comp. to other mobile gaming companies (Zynga, Playtika, etc.), and EBITDA basis ⦁ History of strong app development and revenue growth without major capital injection ⦁ History of profitable business model, stronger revenues than a Skillz ($270M for Playstudios v. $255M for Skillz) Revenue Growth and DAU Chart - from PlayStudios investor deck ⦁ All apps have strong user experience and reviews are exceptional ⦁ Very large amount of shares set to exit lock-up 12 months after de-SPAC ⦁ During the lockdowns, the global market for social casino games grew 24%, indicating a strong hedge play against another locked down economy ⦁ Massive list of partners Partners List - from PlayStudios investor deck ⦁ Very valuable subset of audience From PlayStudios investor deck Bear Cases ⦁ Perhaps one of many entrants into an industry of very high competition ⦁ EBITDA near-term is not super strong ⦁ Some SPAC cash usage not ideal ($150M going into founder's pockets) ⦁ Not in a very hype sector like EV, Space, etc. TLDR: I think Playstudios is under-the-radar, competitively differentiated, and undervalued comp. to other mobile gaming companies right now at ~$11.20/share, and see near-term upside as a long-hold given the major partners and big names behind it (MGM primarily, Activision Blizzard secondarily). Disclosure: 5000 shares of ACAC Disclaimer: I am not a financial advisor... do your own due diligence. |
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