So you may or may not have read/heard a few months ago that video game maker Activision (ticker ATVI) is paying almost $6 billion-with-a-B to aquire King Digital. You know… the company that makes that Candy Crush game. Yeah, that one your wife is always playing on the train with her down time:
Anyway. Let’s talk about that briefly. $6 billion. For a phone app game. Are you kidding me?
When the news broke I couldn’t believe it. And after seeing the new Star Wars film1 I still can’t believe it and wanted to rant about it briefly. To put that $6B in perspective, Disney paid around $4 billion for LucasFilm which includes the StarWars franchise. All of it.
So. I am pretty sure that in 10 or 20 years we are going to look back at that $5.9 billion deal for King Digital and say 1) that it was really really 2 stupid and 2) that we were clearly in the middle of some new type of silicon valley internet-social-media-gaming-whatever related bubble. You know. How these little startups with 8 employees that wear hoodies to work, sit on bouncy balls, and have a ping pong break whenever they want are valued at more than good old fashioned ‘Murica companies like Coca-Cola, Walmart, Ford, etc.
So just for fun, here’s a few other entire companies that you could buy for $5.9 billion (market cap in parenthesis). So tell me in 20 years which you’d rather own. King Digital i.e. Candy Crush or:
Domino’s Pizza ($5.7B)
AMC Network ($5.6B)
Dick’s Sporting Goods ($5.3B)
Pilgrim’s Pride ($5.1B)
Six Flags Entertainment ($4.8B)
Chesapeake Energy ($4.7B)
Panera Bread ($4.4B)
Avis/Budget Group ($4.2B) <<– the ticker is CAR. How cool is that?
Dunkin Brands Group ($3.9B)
Columbia Sportswear Company ($3.8B)
Buffalo Wild Wings ($2.9B)
Kate Spade & Co ($2.7B)
IMAX Corporation ($2.7B)
Sears Holding Co ($2.6B) <<– ok… I’d probably rather buy Candy Crush
Wendy’s Co ($2.6B)
Papa John’s Intl. ($2.2B) <<- just the garlic sauce should be worth more than Candy Crush!
The New York Times Co. ($2.1B)
Tootsie Roll Industries Inc. ($1.9B)
US Steel ($1.6B)
Right?
Ok, enough of my little rant. Just had to get that off my chest. I guess the moral of the story is that for $6B… Star Wars > Candy Crush. Obviously:
Thanks for reading,
Christopher
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