Playtika Eyes $1 Billion US IPO Four Years After Caesars Sale

Posted on: June 3, 2020, 08:39h. 

Last updated on: June 3, 2020, 10:06h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Playtika,the mobile gaming company controlled by Chinese investors, is reportedly considering a $1 billion initial public offering (IPO) in the US, which would value the firm at $10 billion.

Playtika Eyes US IPO
Playtika founders Elad Kushnir (left) and Robert Antokol seen here in 2016. The Chinese investors behind the mobile gaming firm are mulling a US IPO. (Image: VentureBeat)

Playtika is based in Israel and was founded in 2010. A year later, Caesars Interactive, the online unit of the US gaming giant, acquired the company. Because of its relationship with Caesars, Playtika acquired the World Series of Poker (WSOP) Social platform in 2013. Caesars filed for Chapter 11 bankruptcy protection in 2015 and sold the mobile gaming company in 2016 for $4.4 billion as part of the operator’s cash-raising efforts.

Playtika has hired Morgan Stanley and other banks to underwrite the IPO and is aiming to go public either later this year or early in 2021,” Reuters reports, citing unidentified sources.

Although the company is based in Israel, it’s owned by Chinese investors Giant Network Group Co Ltd. and Yunfeng Capital. The latter is a private equity company started by Alibaba founder Jack Ma, who’s one of the richest men in Asia.

Interesting Timing

News of Playtika mulling a US listing arrives as Chinese companies trading on US exchanges are facing more scrutiny, with speculation swirling that some large firms are even considering pulling their New York listings.

In a rare act of bipartisanship last week, the Senate passed legislation that would make Chinese companies trading in the US eligible to be inspected by the Public Company Accounting Oversight Board (PCAOB). The bill’s lead sponsors — Sen. John Kennedy (R-LA) and Sen. Chris Van Hollen (D-MD) — assert they’re not looking for a rift with China. But they do want Chinese companies trading in the US to be held to the same accounting and regulatory standards as American firms.

“If the Bill passes in the House of Representatives, there will first be a period to work out the details, followed by a three-year window for US-listed Chinese companies to submit their audited financials to the PCAOB,” said KraneShares, a fund manager specializing in China and developing economies. “This structure allows for ample time to resolve differences and put policies in place between the PCAOB and China’s regulators.”

The proposal comes at a time when tensions between the White House and Beijing are again running high, and after the Luckin Coffee fiasco. Luckin, the Starbucks of China, was recently delisted from the Nasdaq after it was discovered the company falsified revenue.

Maybe Good Timing

While there’s an element of geopolitics at play, Playtika’s IPO could ultimately prove well-timed, because investors are increasingly enthusiastic about online and mobile gaming and the asset-light business models offered by companies in the space.

Two of the most recent gaming IPOs – DraftKings (NASDAQ:DKNG) and GAN Ltd. (NASDAQ:GAN) – are direct plays on online betting and iGaming, and those stocks are soaring.

Playtika, which has 27 million monthly users, offers games such as Bingo Blitz, Caesars Slots, and Poker Heat, in addition to WSOP social.