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Valuation for $TCEHY 40% stake it #EpicGames
Tencent acquired a 40% stake in Epic Games back in 2012. Well before #Fortnite became one of the most popular games of all-time
Valuation for $TCEHY 40% stake it #EpicGames
Tencent acquired a 40% stake in Epic Games back in 2012. Well before #Fortnite became one of the most popular games of all-time
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Epic Games is still a private company so it is difficult to assign a valuation.
A group of Australian investors acquired a small stake at a US$42 Billion valuation in November 2021.
Epic Games is still a private company so it is difficult to assign a valuation.
A group of Australian investors acquired a small stake at a US$42 Billion valuation in November 2021.
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The investors told reporters they had paid 8.3x TTM revenues.
They also said that according to material shown to them, they paid 6-8x NTM sales. This gives us an insight into revenue and expected growth for Epic Games.
The investors told reporters they had paid 8.3x TTM revenues.
They also said that according to material shown to them, they paid 6-8x NTM sales. This gives us an insight into revenue and expected growth for Epic Games.
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A 8.3 EV/S multiple might seem fair for a typical game developer. Although, Fortnite is losing popularity but they still have 350 million registered users.
But… Epic Games is far from just a game developer.
A 8.3 EV/S multiple might seem fair for a typical game developer. Although, Fortnite is losing popularity but they still have 350 million registered users.
But… Epic Games is far from just a game developer.
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Epic Games is the creator of the unreal gaming engine which is used by some of the most popular games and movies in the world for graphics and visual effects.
In my opinion the Unreal Engine is more valuable than the Fortnite brand.
Epic Games is the creator of the unreal gaming engine which is used by some of the most popular games and movies in the world for graphics and visual effects.
In my opinion the Unreal Engine is more valuable than the Fortnite brand.
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Other public engine technology companies like Roblox or Unity, trade at 25x and 30x sales respectively. Whilst gaming publishers such as Activision, Take Two or Electronic Arts trade at around 6-10x sales.
Other public engine technology companies like Roblox or Unity, trade at 25x and 30x sales respectively. Whilst gaming publishers such as Activision, Take Two or Electronic Arts trade at around 6-10x sales.
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Since Epic Games is a combination of both, we could assume that a fair multiple in today’s public markets might be ~15x sales, remembering it is a US company.
However we don’t know the revenue/profitability split of the game publishing vs. Unreal Engine.
Since Epic Games is a combination of both, we could assume that a fair multiple in today’s public markets might be ~15x sales, remembering it is a US company.
However we don’t know the revenue/profitability split of the game publishing vs. Unreal Engine.
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If Epic games went public and achieved a 15x sales multiple they would be a $70 billion company, which values Tencent’s stake at $30 billion. (~5% of Tencent’s market cap)
The Epic Games stake is a very interesting part of the $TCEHY investment portfolio.
If Epic games went public and achieved a 15x sales multiple they would be a $70 billion company, which values Tencent’s stake at $30 billion. (~5% of Tencent’s market cap)
The Epic Games stake is a very interesting part of the $TCEHY investment portfolio.
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This thread is based on a segment from my ~5000 word write-up on $TCEHY that we be released on February the 1st.
Sign up to the newsletter for free to get the Tencent write-up straight to your inbox.
Seekingvalue.substack.com
This thread is based on a segment from my ~5000 word write-up on $TCEHY that we be released on February the 1st.
Sign up to the newsletter for free to get the Tencent write-up straight to your inbox.
Seekingvalue.substack.com
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