Videogame Stock Roundup: SINA To Distribute Weibo Stock, Pokemon Go Generates $440M In Revenues

Among the major developments last week, SINA Corp (NASDAQ:SINA) announced that it will distribute its Weibo (NASDAQ:WB) stock to its shareholders on pro rata basis and media reports revealed a staggering $440 million in revenues earned by Nintendo’s (OTC:NTDOY) Pokémon Go in less than two months.

A Recap of the Developments

1. Chinese online media company, SINA Corp announced that it will be distributing its Weibo stock to its shareholders on a pro rata basis. SINA has a majority stake (54% or 78% by voting power) in Weibo, which is a microblogging service available in China. Share distribution will reduce SINA’s stake in Weibo to 51% or 75% by voting power. SINA will be giving away one Weibo Class A ordinary share to shareholders holding 10 shares of SINA. The shares are distributable on Oct 12, 2016 to shareholders as of record Sep 12. As per media reports, the move is aimed at tackling overvaluation of Weibo shares and closing the valuation gap for SINA shareholders.

2. Nintendo’s Pokémon Go continues to scale new heights. As per media reports, the game has raked in $440 million in revenues in less than two months. Though the game has started to witness a fall in active daily players, it still generates $4 million in revenues, globally, per day. The game has been downloaded over 180 million times and is yet to release in some major markets like China and India. Reportedly, as of Aug 30, the average time that players in the U.S. spent on the game was 32 minutes, unchanged from the time Pokémon Go was first released. Pokémon Go was developed by Niantic in association with The Pokémon Company, owned by Nintendo. Niantic has benefited hugely from the success of Pokémon Go, which has netted over $308 million in revenues so far. However, Nintendo had earlier noted that the success of Pokémon Go will have a “limited impact” on its financials as it “does not make the game.”

3. Take Two Interactive (NASDAQ:TTWO) has again heaved a sigh of relief after a New York State Appeals court dismissed actress Lindsay Lohan’s lawsuit. As per media reports, the actress filed a lawsuit against Take Two for violating her right to privacy. Lohan claimed that the character of Lacey Jonas from Grand Auto Theft V was modelled on her “with a similar look, voice, clothing and hair.” However, the Court ruled that Grand Theft is protected as a "work of fiction and satire." Last month, Take Two Interactive was also relieved of a lawsuit, which accused it of copying tattoos belonging to baseball stars in its NBA 2K16 games. As per Investopedia report, the tattoo company wanted compensation of $150,000 per infringement that could have resulted in billions of dollars in damages but the court ruled that since the tattoo company “didn’t file a lawsuit when the tattoos showed up in the earlier game, it couldn’t be awarded statutory damages this time around.”

Performance

The following table shows the price movement of the major video game companies over both the past five trading days as well as the last six months:

Over the last five trading sessions, Take Two was up 6.78% while Microsoft (NASDAQ:MSFT) was down 0.05%.

Over the last six-month period, NetEase Inc. (NASDAQ:NTES) surged the most — nearly 55.59%. NetEase recently reported strong second-quarter 2016 results. The increasing popularity of mobile-based games and the strength of PC games (licensed & self-developed) continue to keep investors interested in the stock. Moreover, growing mobile advertising revenues is an added incentive.

Glu Mobile (NASDAQ:GLUU) was down 30.72% over the same time frame due to underperformance of most of its releases. Also, the company downgraded its guidance for 2016. But its significant share repurchase authorization and the much anticipated Taylor Swift game keep hopes alive.

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