4 ms·

Unity is currently valued around 15B. 17.5B is an embarrassingly small premium, especially considering how down the tech broader tech market is. You have to thi

Unity is currently valued around 15B. 17.5B is an embarrassingly small premium, especially considering how down the tech broader tech market is. You have to think Unity will shortly be worth more than 17.5B.

throwaway1777 4y ago
That’s bull market thinking. The stock could just as easily continue sliding down.
- hesdeadjim 4y ago
  Yea, they've spent a lot of money over the last few years on questionable acquisitions (Weta for multiple billions, seriously?). They are making a big push into their game services division, which is more than ads now: matchmaking, lobbies, dedicated servers (Multiplay acquisition), etc. They also aren't trying to only target Unity for some of these. Multiplay in particular runs a lot of Unreal games, or at least they did (such as Apex Legends). Unfortunately I don't see a world where these services move the needle at all for a giant behemoth of a company like Unity.
  - 2600 4y ago
    Apex Legends on PC and consoles is using a modified version of Source engine, although the mobile version is using Unreal.
    - xSxY3fj5gVCmvWE 4y ago
      The game's engine is irrelevant to the multiplayer backend in this case. https://unity.com/case-study/apex https://unity.com/case-study/apex
- atwood22 4y ago
  They’re like 27% down from their IPO price two years ago. I don’t think their business has deteriorated so drastically that 17.5B would be attractive. I could be wrong though.
helsinkiandrew 4y ago
Unity shareholders would get 49% of the combined company, if they don't screw up the merger a game tech + ad tech combination might be worth than either alone
- danpalmer 4y ago
  > if they don't screw up the merger This is a really crap deal for shareholders. They'll go from owning a $15bn company, to owning half of a ~$30bn company, but with all the risk of the merger failing or failing to live up to promises, which, surprise surprise, is the norm.
  - ipaddr 4y ago
    Or going up in value plus they can cashout at any point.
solarkraft 4y ago
Huh, how would the market being down enable Unity to command a higher premium?
- atwood22 4y ago
  Unity’s value decrease is mostly (solely?) due to market conditions. That means that their underlying business is the same as it was before the broader market downturn, which means their value should increase as market conditions improve. Unless they need to sell now, their value should increase in the future.
  - BbzzbB 4y ago
    Counter: Unity's prior price (as opposed to value) increase was mostly (solely?) due to market conditions. They barely get more than a billion/year in revenue while burning over half that amount. Paying nearly $20B for that is a huge leap of faith with regards to their future potential and hardly a sure thing. The stock market valuing them at that price during a period of zero interest rate with blinders on for risk is not really a valid stamp of proper value. The fact they agreed to sell at that price to a malware company might indicate as such too.
pavlov 4y ago
Unity is announcing their Q2 results today after market close. If it's a disappointment, the company could easily be worth a couple billion less tomorrow morning. And then AppLovin's deal might sound more interesting to Unity's shareholders. That's probably why AppLovin timed this announcement like this.

throwaway1777 4y ago

That’s bull market thinking. The stock could just as easily continue sliding down.

hesdeadjim 4y ago
Yea, they've spent a lot of money over the last few years on questionable acquisitions (Weta for multiple billions, seriously?). They are making a big push into their game services division, which is more than ads now: matchmaking, lobbies, dedicated servers (Multiplay acquisition), etc. They also aren't trying to only target Unity for some of these. Multiplay in particular runs a lot of Unreal games, or at least they did (such as Apex Legends). Unfortunately I don't see a world where these services move the needle at all for a giant behemoth of a company like Unity.
- 2600 4y ago
  Apex Legends on PC and consoles is using a modified version of Source engine, although the mobile version is using Unreal.
  - xSxY3fj5gVCmvWE 4y ago
    The game's engine is irrelevant to the multiplayer backend in this case. https://unity.com/case-study/apex https://unity.com/case-study/apex
atwood22 4y ago
They’re like 27% down from their IPO price two years ago. I don’t think their business has deteriorated so drastically that 17.5B would be attractive. I could be wrong though.

helsinkiandrew 4y ago

Unity shareholders would get 49% of the combined company, if they don't screw up the merger a game tech + ad tech combination might be worth than either alone

danpalmer 4y ago
> if they don't screw up the merger This is a really crap deal for shareholders. They'll go from owning a $15bn company, to owning half of a ~$30bn company, but with all the risk of the merger failing or failing to live up to promises, which, surprise surprise, is the norm.
- ipaddr 4y ago
  Or going up in value plus they can cashout at any point.

solarkraft 4y ago

Huh, how would the market being down enable Unity to command a higher premium?

atwood22 4y ago
Unity’s value decrease is mostly (solely?) due to market conditions. That means that their underlying business is the same as it was before the broader market downturn, which means their value should increase as market conditions improve. Unless they need to sell now, their value should increase in the future.
- BbzzbB 4y ago
  Counter: Unity's prior price (as opposed to value) increase was mostly (solely?) due to market conditions. They barely get more than a billion/year in revenue while burning over half that amount. Paying nearly $20B for that is a huge leap of faith with regards to their future potential and hardly a sure thing. The stock market valuing them at that price during a period of zero interest rate with blinders on for risk is not really a valid stamp of proper value. The fact they agreed to sell at that price to a malware company might indicate as such too.

pavlov 4y ago

Unity is announcing their Q2 results today after market close. If it's a disappointment, the company could easily be worth a couple billion less tomorrow morning. And then AppLovin's deal might sound more interesting to Unity's shareholders. That's probably why AppLovin timed this announcement like this.