Angry Birds no longer so popular with angry shareholders
Written by David Adams
Shares in Rovio Entertainment, the Finnish company behind the delightful, moderately violent timewaster Angry Birds, have plunged following a profit warning, just five months after the company’s floatation. Shares fell by almost 50 per cent to €4.90 on February 22.
Rovio said it now anticipated sales to have reached €260 million and €300 million over the current year, with an operating margin of between nine and 11 per cent. This was well below forecasts of €336 million sales and a 14.5 per cent margin. Rovio CEO Kati Levoranta said a long term aim of a 30 per cent profit margin was still achievable, but the company has endured a difficult few months, with another 20 per cent fall in its share price having taken place in November. When the company floated in September shares were being sold for €11.50.
Analysts suggest the current strategy is failing: having a movie made about your product is all very well, but the Angry Birds moment has passed and Rovio can’t make its other products popular through marketing efforts alone. The bottom line is that the company needs to find another hit game that all of us will spend too much time playing. If they fail, their shareholders will be the ones who end up throwing things around.