Video Game Software Maker Unity To Let Investor Bids Dictate IPO Offer Price

Two weeks after Unity Software Inc initially announced its plans to go public, the company filed an amended securities registration form with the details of the offering.

The update filed on Sept. 9 disclosed that the company would issue 25 million shares with an initial public offering offer price between $34 and $42 for an estimated $1 billion in proceeds.

Unity is a game engine that allows developers to create 2D and 3D experiences for interactive games.

What Happened: Unity has filed for listing its common stock on the New York Stock Exchange under the symbol “U”, and has engaged a consortium of underwriters led by Goldman Sachs & Co LLC and Credit Suisse Group AG CS.

The Financial Times reported that the IPO offering will use an online bidding system managed by Goldman Sachs Group Inc. GS. Interested institutional investors can place multiple bids through the online portal at different prices.

Share allocation will commence after Unity selects an offer price for the issue, according to FT. For all bids equal to or above the decided offer price, the company may choose to allocate either on a pro-rated basis or based on an auction process.

Why Does It Matter: In the updated SEC filing, Unity claimed to have over 1.5 million active creators as of June 30. Over 50% of mobile games, PC games, and console games combined were made using Unity, based on the top 1000 mobile games of 2019 in Alphabet Inc. GOOGL GOOGL and Apple Inc's APPL app stores.

Reported revenues for the first six months this year were $351.3 million at a 39% growth rate year over year. Whereas net loss for H1 2020 declined to $54.1 million, compared to a loss of $67.1 million for the same period in 2019.