The company behind the Angry Birds game is struggling to stop investors walking out.
Rovio Entertainment Corp interrupted a “silent period” on Thursday to tell shareholders that this year is expected to be far worse for the Finnish company than initially thought. After issuing a short statement, it then went quiet again, promising more information in connection with its annual results on Friday next week.
However, as the profit warning wiped off half its market value, leaving it worth about US$500 million, management decided to break its silent period again and convene an ad hoc conference call.
Chief executive officer Kati Levoranta, who led Rovio through its initial public offering in September last year, said it was the intense sell-off that forced her into dialogue with the market.
“Having seen how strongly the stock market had reacted to our preliminary information and especially, as we assume, the outlook for 2018, it was prudent to change the original approach and have a dialogue with investors and analysts already today,” she said.
Her decision followed investor criticism over the company deliberately leaving the market in the dark on some key pieces of information.
Swedbank Robur Fonder AB portfolio manager Carl Armfelt said Rovio has “been bad at communicating since its IPO,” according to Dagens Industri.
Investors are also desperate for proof that Rovio is not a one-product wonder and that it can repeat its Angry Birds success. So far, the company is burning through its cash to bring more users on board, but revenue from its main products is tumbling.
“They’ve had to own up to the fact that they’re having to buy revenue with expensive marketing spend,” said Aaron Kaartinen, an analyst asset manager at FIM. “The games have to have genuine pull and at the moment, they just don’t really have such games.”
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