It was July 4th 2011, when mobile gaming company G5 Entertainment for the first time publicly announced its intentions to relist its shares from niche-market Aktietorget to the Nasdaq OMX. These plans become more concrete when G5 hired Swedish investment bank Carnegie in early 2013 as advisor for the relisting process with the goal to be done by the second half of 2013.
Having just entered the month of November, we are approaching the end of 2o13 with big steps and no further news have been announced by G5 regarding the relisting. We have long been an advocate for the relisting, as it would finally allow international investor to invest in the company. Also, bigger domestic fund could finally take a stake (many funds are not allowed to invest in Aktietorget-companies for internal policy reasons). All this should then in turn finally make an end with the significant discount valuation compared with international gaming companies such as Electronic Arts, Gameloft, Glu Mobile, Zynga mm.
So what is left in the process? Nasdaq OMX is quite clear with its listing requirements (http://www.nasdaqomx.com/listing/europe/primarylisting/listingrequirements):
“NASDAQ OMX has harmonized listing requirements across its exchanges in Europe. This helps to simplify the listing process, provide transparency and comparability, and to broaden exposure for companies. “
|Three years of operation and accounting records for those years|
|Documented capacity for profitability|
|Criteria regarding management, composition of the board, financial controls, supplying information to the market|
|At least 500 shareholders|
|At least 25% of the shares in the company must be owned by the general public|
|Total market value of at least 1 million euros|
Let’s check whether G5 ticks the boxes:
“Three year of operation…” – YES
“Documented capacity of profitabilty” – YES
“Criteria regarind management…” – Here is probably the only question mark. G5 hired a new CFO early 2013 with previous experience from a Nasdaq OMX listed company. The company also appointed Petter Nylander as its new Chairman of the Board. So from the personnel side there should not be any issue. It is hard to determine from the outside whether Nasdaq OMX still has issues with G5’s financial controls. The company’s way of supplying information to the market should fulfill the requirements in our view
“At least 500 shareholders” – YES
“At least 25% of the shares must be owned by the general public” – YES
“Total market value of at least EUR 1m” – YES
“Listing prospectus” – Should not be a problem and Carnegie most likely gets far too much money to do just that right now.
It is our assessment that an announcement of the relisting is around the corner. G5 fulfills most of Nasdaq OMX criteria. What could be left are certain internal financial reporting/control routines. G5’s quarterly reports are already on a high standard and detail level.