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Back in April, Changyou.com (NASDAQ: CYOU) launched its IPO and since then the stock price is up an impressive 138%. The online gaming company is based in China.
Well, now investors will get another chance at a similar offering as Shanghai-based Shanda Games Limited has filed to go public.
Founded in 2001 -- as a division of Shanda Interactive Entertainment (NYSE: SNDA) -- Shanda Games is a big player in the fast-growing space of massively multi-player online role-playing games, or MMORPGs. In fact, the company has 18 such titles in its portfolio (as well as 11 advanced casual games).
Shanda has roughly 9.73 million active paying accounts. The revenue model consists of two parts. First, players can pay for items (like weapons, clothing and so on). The pricing generally ranges from one cent to $1.47, although in some cases, an item can fetch more than $100.
Next, Shanda can charge on a time basis, but this is becoming less common.
Last year, Shanda's revenues spiked 45% to $494.3 million and net income was up 58% to $136.9 million. No doubt, the growth should continue. According to a study from IDC, the Chinese online gaming market is expected to reach revenues of $5.8 billion by 2013, which represents 16.7% annual growth rate.
The underwriters on the IPO include Goldman Sachs (NYSE: GS) and JPMorgan Chase (NYSE: JPM). The proposed ticker symbol is "GAME."
Tom Taulli is the author of various books, including The IPO Primer and The Complete M&A Handbook
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