AppLovin proposes to buy Unity Software for $17.5 billion
Yahoo Finance Live anchors discuss AppLovin's proposition to acquire Unity Software.
Video Transcript
BRAD SMITH: Also here, let's checking in-- check in on some of these software stocks. That's gaming software company AppLovin. They made an offer to buy Unity Software for $17 and 1/2 billion. This is creating some problems as Unity had previously announced a plan to buy ironSource. So any deal that would unite the two mobile game developers would likely have some impacts on the deal with ironSource.
JULIE HYMAN: Yeah, it's a condition of AppLovin buying Unity that they call off the deal with ironSource, which is a competitor to AppLovin.
BRIAN SOZZI: It's a complicated business. We talked to AppLovin CEO and we came away with, well, OK, it sounds like an interesting business. Whatever you're doing, just keep on doing it. But the ultimate-- the ultimate winner here is Jon Riccitiello He's the former longtime CEO of Electronic Arts. He is now the CEO of Unity. Under either situation, he's still being seen as the CEO of this combined company so he can continue to collect his big checks.
JULIE HYMAN: Right. That's one of the things that was part of this AppLovin deal is that Unity would still run the combined company. Unity, by the way, also came on with its earnings after the close yesterday, and came out with a forecast that missed estimates for sales. But the shares are trading higher as people are trying to figure out how this deal is going to go here.
A lot of analysts here talking about that there is uncertainty around the deal, that there is skepticism around it getting done as it is. So, you know, the skepticism is not necessarily being reflected in the shares and what we're seeing this morning, although the fact that ironSource is higher suggests that investors and traders still think that there's a chance that deal still gets done.
BRAD SMITH: Yeah, in terms of customers, who are actually generating more than $100,000 of revenue in their trailing 12-month metric there, they saw 1,085 of those customers. That's compared to 888 in the previous year. And so that's one bright spot.
However, the other kind of down area was the loss from operations. That was 67% of revenue compared to this time last year 55% of revenue. So some of the growing losses there, even though you do have some of the spenders, the core customers, within the business for Unity that are now spending more than that $100,000 TTM metric as well that they mentioned.
BRIAN SOZZI: I'm Wendy's loving, guys. I'm excited for my spicy chicken sandwich for lunch today.
BRAD SMITH: And French toast?
BRIAN SOZZI: I can't wait. I can't wait.
