Witcher Dev CD Projekt Merges with Polish Company, Plans to Go Public
"Since Optimus is a stock market company, CD Projekt will in fact go public and have access to all stock instruments," said a CD Projekt spokesperson to Kotaku. "Ultimately, this means money for future development of the whole company."
-
azshack
replyI'm silly and stupid, but doesn't most of the money you get from being on the stock market come from your IPO, which in this case would have already happened? In a case like this, where does CD Projekt get money from the stock market?
-
-
I'm not stock market expert, so this is purely speculation on my part, but I would figure that a company's Initial Public Offering only brings in the big bucks if they are already well established or have some crazy patent / invention that's sure to make money (artificial heart, cure for aids). The rest of a company's stock market success would be built on productivity and reputation.
However, that doesn't really explain this situation either because why would CD Projekt buy a nearly out business company (Optimus) just so they can get on the stock market. You would have to assume that Optimus isn't really trading really high and I am not sure what CD Projekt gains from that except possibly some debt.
It almost sounds as if they are trying (questionably) to get around some legal red tape to go public.. possibly to avoid some tax issues as well. Strange deal any way you want to look at it.
Hopefully the company doesn't tank after this - in quality or financially - because The Witcher was a great game and I was looking forward to anything else this company might have on the plate.-
CD Projekt isn't buying out Optimus, Optimus is buying out CD Projekt in a pure stock sale. Presumably CDP is betting on a stock spike when it effectively becomes the new company, since it's clearly in stronger financial shape than Optimus.
-
From this story: the move will actually allow the owners of CD Projekt to become the owners of the new public company . Which effectively means CDP is buying Optimus and again the benefit question is raised.
But I should have just read the Kotaku article in the first place, which states exactly what I speculated:
From the sound of Polygamia's story, it sounds like this buyout is to enable CD Projekt, a private company, to enter the stock market as a publicly traded company without the necessary formalities.
-
-
-
-
For a company, the rationale for going to the stock market is not only the cash from the IPO itself, but for later access to cash. As time goes on, you will likely need more money to fund your growth. When this happens, you do a new share issue and get new cash in. Non-public companies do this as well but it's A LOT tougher to fund these since you have less of a streamlined way of doing things (and the odds of not successfully finding guys to chip in cash is a lot harder - see 3drealms). When doing share issues in private companies that really need the cash, you easily get fucked over by your new investor because he knows that you need him. In the stock market, you have 100x as many potential investors and the bargaining power of each is a lot less.
And these days are typically of the kind where cash is extra important since your 2008 budgets are probably a mile away.-
-
However, this move should still be considered within the 'financial trickery' category. I've never heard of such a deal before and it would be kinda odd to suddenly change the entire business of the previous one (don't know what it did, though). How do you market such a thing to investors?
-
-
-
