Our first ranking check for G5 Entertainment in Q4 does not show any meaningful change in recent trends, i.e. a sideward movement for the portfolio as a whole. While we continue to see it positive that Secret Society is the star performer, the recent Q3 preliminary numbers served as a reminder that it is not enough if G5 wants to return to the growth rates seen since 2009. New quality F2P games have been promised for quite some time now and we really need to see them soon. G5 is most likely planning a strategic launch into the all-important holiday season. That said, F2P games usually need some time to build a large user base and then turn into paying customers after some weeks of playing. So launching the games sometime during October would seem suitable, we believe.
Last week’s share price reaction was once again a sign of how desperately needed a change of listing is. Trading in Aktietorget-listed companies is dominated by private individuals that make unsophisticated and emotional decisions, usually exaggerating any share price movement. At current levels, the G5 share appears to be extremely oversold and with the relisting to Nasdaq OMX around the corner, it seems foolish to not be long G5 Entertainment at this point. The IPO of Candy Crush maker King.com should also contribute to renewed buzz around mobile gaming and there are really not that many 100% plays on mobile gaming out there. G5 stands out as extremely undervalued compared with peers.
Number of G5 Entertainment games among the top grossing charts for iOS:
(We are screening the app markets of Australia, Brazil, Canada, China, France, Germany, Italy, Japan, Netherlands, Russia, South Korea, Spain, Sweden, UK and USA)