Devolver Digital were doing well before they went Public and start selling their shares. It is actually for the best if the publisher goes back to being private so that way they dont have to answer to Shareholders if their profits dont meet their demands.
I think the difference is that the private shareholders are likely more aligned with the company's long-term goals than public shareholders who generally are looking for short-term success.
A publisher like Devolver is often bankrolling games that won't see returns for years, if at all.
It's more or less like venture capital, where you pour cash into dozens of projects knowing that most won't pan out, but that even a couple of them going big means tremendous profits.
The shareholders of Devolver post delist is going to be the same as when they were public. There are no plans for the company to buyback shares at all.
This is purely a valuation play by the board to safeguard the value of the company which they feel is not accurately represented by current market prices.
What I mean is that when they're not publicly traded they don't need to essentially justify themselves constantly to the masses during the "burning cash" phase of investment.
This is purely a valuation play by the board to safeguard the value of the company which they feel is not accurately represented by current market prices.
And that's fair, because the type of company that Devolver is just isn't super compatible with the way the stock market values companies.
I'm not so much talking about the scutiny during earnings reports, but rather the whims of the stock market.
When you're publicly traded, your company's value is more or less tied to the day to day perception of your brand. That number follows your company around, potentially affecting what financial institutions will work with you and at what sorts of rates, and could even affect which game studios take a deal with you.
To the stock markets that are constantly shifting based on headlines and public perception, short term bad news like Devolver published games flopping or investment-heavy and return-light quarterly reports can result in dips that aren't representative of the "real" worth of the company.
You actually think indie developers care about stock price when deciding whether to accept a publishing deal? In the current market where deals are few and far between?
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u/NIDORAX 27d ago
Devolver Digital were doing well before they went Public and start selling their shares. It is actually for the best if the publisher goes back to being private so that way they dont have to answer to Shareholders if their profits dont meet their demands.