Why MZ Ignores Us
MZ I had plenty of time to think about why you constantly disregard the input from gamers; you have been mesmerized by the Bloomberg reports that if Machine Zone where to have an initial public offering you could be valued as high as $8 billion. That’s not too shabby for a one hit wonder.
However, I guess you overlooked the article’s point that most game companies with only one major revenue generating platform experience drastic drops in revenue once the newness factor wears off, and can’t justify the bloated stock price that was originally projected. Zygna Inc’s stock price dropped roughly 70% from its initial public offering, and King Digital saw an 11% dip in the stock price by the end of its first quarter post initial public offering.
I’d like to thank Bloomberg for providing those details so that we could continue to talk about your future MZ. You know I heard from a lot of people that you intended to possibly pursue an initial public offering. I thought there was no way you were already going public. Then when those people told me the projected value I nearly broke my Kindle when I fell out of my chair.
Everyone I spoke to about the possibility of an initial public offering was so impressed with everything they were reading. I actually had to sit a few of them down and explain why you might be considering going public. The first reason was that you needed additional capital to grow the company. Well considering the $13 million initial investment from Menlo Ventures, the $250 million you pursued in a private placement with JP Morgan and the $619,197 estimated daily revenue I don’t see any way on earth that you could have been under capitalized unless someone was embezzling. That leaves us with option two. The second reason to take a company public is because the investors are looking to recuperate their investment and turn a profit as quickly as possible. Making money is the name of the game after all.
Normally investors wait till they believe they can get the highest offering possible. If you go to soon you leave cash on the table from the company’s appreciation and if you wait too long you miss the price apex and the buyer takes some of the money back. So in this case it’s more likely that your investors knew that Machine Zone was teetering towards it’s apex and were looking to bail out of the investment. After all why walk away from something if you thought it still had the potential to continue growing.
So when we contact you with our problems MZ you might want to tell Suzi to do a little better job making us feel appreciated. You may want listen to what we have to say, and follow through on some of the stuff we are asking you to do because we aren’t too far from the point where all the polish from being new has worn off. When that happens revenue streams dry up, and people like Mark Pincus, the CEO and founder of Zygna Inc, are gradually pushed further and further out the C-suite door. That’s just some food for thought MZ for when you conveniently choose not to recognize the input from your customers #PowerToThePlayers.
