A company that wants to grow needs money, a lot of money sometimes. The very lucky ones are trading a product or service that is so unique and wanted that the money flows in like rainwater in a downhill street during a thunderstorm. But normally a company can grow in two ways: organic, which means that the growth is steady, but undeniable, or by acquisitions, meaning that they buy other companies that fits the business plans of the buying company. Or just because it’s a one-time opportunity. Raising extra money can be done by private investors, like the owners themselves, by loans from a bank or by entering the stock market. In this case anybody can acquire a piece of ownership of the company, by means of buying some shares, which are for sale on the stock market every day. That’s a great idea, being co-owner of one of the most successful companies in gaming development.
There are a lot of stock markets worldwide. We all know the name Wall Street, the biggest stock exchange in the world in New York. Fluctuations in the Down Jones index (the average value of all shares together) can have a great impact on the world’s economy. NetEnt is listed however at a smaller stock exchange, based in the Swedish capital Stockholm, confirming their Swedish roots. NetEnt’s class B shares are traded on NASDAQ Stockholm, Large Cap.
Since the IPO (Initial Public Offering) in 2007 the price of the shares displayed a healthy grow, which can be seen as a confirmation that the company is in good health by fruitful operations, a good business product, and prosperous sales (read: enough profit). Well, that’s NetEnt indeed and facing the worldwide growth of the gaming industry, where NetEnt sells their products, the sky may not be the limit but climbing up steadily is very likely.
Was it a fairy tale all the way long? Of course not and there is no reason at all for the over 200 employees and the managing directors to lean backward, knowing that this ever growing software provider is working nonstop to create an even better, more innovative quality product. Even though they have to face a tough competition from other service providers, like Microgaming, that are also fighting for a bigger share of the cake. Research and development is one of the key departments in gaming companies like NetEnt, just because the players expects a constant flow of new games. The NetEnt Casinos are demanding the same of course and on top of that they are working all on better service systems at the back office, resulting in 100% safe transfer systems and protection of the players data, which nobody wants to see exposed through the efforts of smart hackers or sloppy employees. All these threats are as many challenges to constantly put energy in development and better service systems. One bad move in the business and the rate of the shares can fall down drastically, meaning that the company can lose a big part of its listed value in just one day!
A few years ago the poker site of Full Tilt Poker went down, leaving a number of players in stress because their money was gone, not in a players reserve fund, though, but in the company itself and in the pockets of a few owners. The day Full Tilt Poker sites went down, still known as Black Friday, was a warning to all online casinos to improve their protection system because it’s very painful to leave customers behind with the bad news that their players accounts are empty. Okay, nice, I hear some readers mumbling but NetEnt is not an online casino. That’s correct but NetEnt has a number of games with huge jackpots, like Mega Fortune is one, responsible for a record payout of €17,8 million in 2013. These progressive jackpots are controlled and managed by NetEnt. There must be guarantees that that kind of money, brought up and in fact owned by all players of those games together, is always available when somebody hear the bells ringing telling him or her that they join the forces of the fortunate that won big prizes too. So far so good, as dozens of these NetEnt Jackpots have been paid out already. These same pooled jackpots grow higher and higher, resulting in a growth of players at the many NetEnt Casinos, more customers dying to offer these games to their players, which is all having a positive influence on the shares of the company. A winning formula if you ask me.
Solid position stock exchange
It is just to explain that not only shareholders have a special interest in the day to day results of the company where they own shares from, but also the normal clients of such a company. Imagine what would happen if a company like Microsoft would come down suddenly in a free fall on Wall Street. The present position of NetEnt is however very solid and satisfies the shareholders, giving them a good dividend (that is the yearly profit on a share, and it expresses the matter of success of a company that is stock listed). The past few years the gross profit of NetEnt mounted to over 10% on the revenues and that was enough to give a nice dividend and to invest in new developments like live casino games and mobile casino games, well-known as Touch games, two “trending topics” in the gaming business over the past few years. As NetEnt is one of the most transparent companies in iGaming, all figures, and company information, including NetEnt’s Series B shares, can be found on Netent.com.