Top of the Great Era

Chapter 3011 Social + Games

Just when Zhou Buqi and Chen Dong were discussing Jingtao's next capital operation, a Wall Street tycoon came over, Mr. Peake, the president of Morgan Stanley.

First they clinked glasses, drank, and exchanged greetings.

Mr. Peake asked a very pointed question right away: "Changyou will not be delisted, right?"

Zhou Buqi smiled and said, "Of course not. The board of directors has already made multiple statements."

"Why are so many Chinese concept-listed gaming companies choosing to delist?"

"Well... maybe he wants to make more money!"

“Why does the A-share market give gaming companies such a high price-to-earnings ratio?”

This is Pique's biggest concern.

Over the past year or so, there has been a trend among Chinese gaming companies to delist from the U.S. and then return to China to go public on the A-share market through a backdoor listing. Between going in and out, they can multiply or even increase their wealth by several times or even dozens of times.

Because in the US stock market, the price-to-earnings ratio of Chinese gaming companies is generally only 5-15 times, while the price-to-earnings ratio of A-shares is very exaggerated. For example, the price-to-earnings ratio of Shanda Games is 132 times, and the price-to-earnings ratio of Zhongqingbao is 126 times.

This is mainly due to the lack of A-share technology companies.

Due to the scarcity of high-quality technology companies and the recent thawing of domestic financial policies, hot money has increased, driving up the share prices of a series of gaming companies, which are then treated as highly promising Internet companies for investment.

In fact, game companies should not be valued that high.

Game companies face huge risks. A popular game may lose its popularity after three to five years. Game companies need to constantly look for new concepts and develop new games. This lack of long-term performance carries huge risks, just like a movie company. If a movie becomes popular, it will make a lot of money. If a blockbuster fails, it will lose money. It is full of uncertainty.

In the US stock market, even game companies like Changyou, Blizzard, and EA have a price-to-earnings ratio of only a few dozen times. For some game companies in Europe, South Korea, and Japan, the price-to-earnings ratio is generally around 20 times.

Zhou Buqi smiled and said, "There may be some differences in the understanding of the game between the two sides."

Mr. Peak nodded, hesitated for a moment, and then slowly said: "Mr. Zhou has a lot of Momo shares?"

"Ok?"

Zhou Buqi raised his eyebrows.

Pique quickly explained, smiling, "We are in contact with Momo and are discussing Momo's listing in the United States."

Zhou Buqi asked, "Momo wants you to be the underwriter?"

Pique nodded and said, "Yes, both parties are indeed interested in promoting this project. However, I still don't understand some of the details. I hope Mr. Zhou can help me analyze it."

Zhou Buqi did hold some shares in Momo, which he actually distributed to the secretary in his office.

Because Guan Nanqing, Yao Yao, Liang Lexin, Zhuo Wensi, and Li Shuruo had all left one after another, the Momo shares originally allocated to them were all repurchased and are temporarily in Zhou Buqi's hands. He plans to distribute them to other new female secretaries next.

It can be said to be extremely generous.

Working as a female secretary beside Boss Zhou, not only will you have the opportunity to be favored by the world's richest man, but you will also have the opportunity to achieve financial freedom within a few years, which many people cannot achieve in their lifetime. Now, Momo is finally going public, and the stocks held by Mai Feixue, Gu Zanli, Yan Qiqi, and Zhang Zetian can finally be exchanged for shining golden numbers.

“In which month will Momo go public?”

Zhou Buqi holds very few shares in Momo and is not a member of the board of directors, so Momo did not inform him of the relevant situation. Mr. Peake said: "It may be in the second half of the year, or even the end of the year, to avoid Ziweixing International and Alibaba. However, there are some obstacles now, and our positioning of Momo as a company is still a little vague."

Zhou Buqi could only give a rough idea at best. "I may not know the specific situation. But isn't Momo's positioning as a social network?"

Pico said: "It is indeed social, but the vast majority of Momo's revenue comes from games."

"what?"

Zhou Buqi was slightly stunned. He really didn't know.

Pique is very worried about this. "Momo's main business revenue is very small. In order to impact the IPO, they have made a lot of commercial designs, including games. They developed a game called "Momo Battle", and the revenue of this game accounts for more than half of the company's total revenue."

"Uh……"

Zhou Buqi was not quite clear about this situation.

Making money through games is indeed not in line with Momo’s social attributes.

If it is a social networking company, the price-earnings ratio can reach 100 times if it is listed in the United States, but if it is a gaming company, it may only be 10 times. The concept of the IPO will lead to different financing scales.

Zhou Buqi pondered and said, "I don't know the specific situation. I'm not even a director of Momo. However, based on my experience, Momo may want to follow the path of Penguin. You should know Penguin, right? It's one of the best Internet companies in our country."

Mr. Peake smiled and said, "Of course, it is an excellent company."

Zhou Buqi said: "Maybe Momo wants to imitate the model of Penguin. In the past few years, Penguin has achieved great success. One of its important business plans is the 'QQ + QQ game' model. It relies on social products to attract traffic and relies on game products to monetize traffic. This 'social + game' structure has great potential and market competitiveness."

Mr. Peake nodded. "I hope so."

Zhou Buqi also had an idea in his mind.

No wonder Momo’s stock price was half dead later.

This is because the business model doesn’t work!

It is not easy to copy the "social + game" architecture model of Penguin. Social networking is social networking, and games are games. There are huge differences between the two, and even two different product concepts are needed.

Large companies can diversify, and small companies can do the same, which can easily lead to internal divisions.

This means that Momo is destined to have difficulty becoming a high-quality investment project.

The dinner party ended that day.

After returning home, Zhou Buqi sent a text message to Zhao Limuge, who was currently in China, telling her that Momo would be listed soon, but he still had a batch of Momo's original shares left.

These stocks made no sense to him.

It would be best to distribute them all before Momo goes public to help more people.

It was still daytime in China, so Zhao Limuge quickly replied to the text message: "Huo Hua's visa has been approved. I will arrange it right away and take her to the United States to see you! Do you want to bring Wang Langli with you? Just say... just say that you are taking her parents to the United States for medical treatment."

Zhou Buqi thought it made sense and replied, "Indeed, curing diseases and saving lives is the most important thing."