Rovio stock suddenly becomes hot commodity

Will Rovio sell out or look to go it alone and IPO? Possible suitors aren’t difficult to imagine from Google, Inc. (NASDAQ:GOOG) to The Walt Disney Company (NYSE:DIS). If I were them, I’d be booking a flight to Rovio’s headquarters as soon as possible.

With the news that Angry Birds-maker Rovio Mobile has secured $42 million in Series A funding, Rovio stock has suddenly become another hot stock that investors can’t buy. The funding round was led in part by venture capital firm Accel Partners, which got in early on Facebook, Groupon and AdMob.

Accel’s not quite got the cache of Digital Sky, but the venture capital firm is well on its way. Accel was founded by Niklas Zennstrom – the same Zennstrom who co-founded the file-sharing site Kazaa and the soon-to-IPO Skype.

Zennstrom has a knack for sniffing out up-and-coming tech trends, and he’s apparently pouring a lot of heart into Rovio Mobile. He’ll sit on the company’s board of directors as Rovio looks to transform Angry Birds from a mobile game to a multi-platform global phenomenon.

Already some 40 million users play Angry Birds every month and Rovio boasts that the game is the No. 1 paid app on the iPhone in 67 countries from the U.S. to Kazakhstan and Macau. Talk about a success story. It’s hard to wrap your mind around just how explosive the growth in Angry Birds has been.

Rovio was on the cusp of bankruptcy before starting work on Angry Birds in 2009. The company had made 51 mobile games for other companies, and the time had come – they decided – to start marking their own games. Rovio’s founders thought they’d have to make 10 or 12 games, Wired reports, before coming up with a blockbuster. It only took one.

Now, on the strength of Angry Birds downloads, stuffed toy sales and licensing deals, Rovio’s revenue is estimated at $50-70 million. With just 50 employees, the company’s already profitable, and the fun is just getting started. Angry Birds is available on all of the major mobile platforms (outside of the Blackberry), and it will be available on major game consoles including the PS3, XBox 360, and Wii next year.

A broadcast cartoon is in the works. Rumors of a movie deal are floating in the ether, and a Facebook App should launch in May. Rovio, it seems, is doing what Zynga hasn’t been able to do. It’s turning itself into more than a mobile game developer. The latest funding round is proof of that, and I’m a believer. Now, I just wish I could buy some shares off a disgruntled employee.

Since that probably won’t happen, the question becomes whether or not Rovio will sell out or look to go it alone and IPO. Possible suitors aren’t difficult to imagine. How about Google, Inc. (NASDAQ:GOOG) or The Walt Disney Company (NYSE:DIS)? If I were them, I’d be booking a flight to Rovio’s headquarters as soon as possible. Accel’s cash infusion may have shut the door on acquisition talks in the short-term, though. Why look for a buyer when the birds are just taking flight?



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