Valve Corporation is an American video game developer founded in 1996 by two former Microsoft employees, Gabe Newell and Mike Harrington. They created the viral, award-winning video game, Half-Life in (1998). If you know anything about Valve corporation, you know that it is ever-expanding and developing to create the best products for their customers. It is definitely enticing to want to be a part of it and invest in the company. But the question here is can you buy stock in the company?
This article will take you through what Valve corporation is, why you might want to buy their stock if you can or not, and what the future holds for Valve Corporation in terms of investment from the public.
Can I buy Valve Corporation stock?
Valve corporation says they are “only just getting started” – so they are many exciting projects in the pipeline for the future, and they continue to have rapid growth and sales, year on year. It would be a very consistent company to invest in. However, to answer your question simply, no you cannot buy valve corporation stock. This is because it is a privately held company, so bonds or stocks are not sold on the public market, and Gabe Newell, Valve’s CEO, wants to keep it that way.
If you want to learn a little more on the subject, continue through this article where any other questions you may have will hopefully be answered.
What is Valve Corporation?
Valve Corporation is an American video game developer founded in 1996 by two former Microsoft employees, Newell and Harrington. With a headquarters in Bellevue, Washington, it is the creator of the Half-Life video game (1998) and the Steam gaming software platform. Half-life won more than 50 game of the year awards, and Valve has continued to release many titles. To this day, millions of people continue to play their games every day. Valve Corporation’s interesting aspect is that the partners engage with the players when creating their content as they want to make it the best it could be for their customers. They say they’re “just getting started”. This is exciting because they are always working towards what they can create for the future, and I can see why you would want to be a part of it.
Why would you want to buy their stock?
One reason would be their commercial success. In 2003, Valve launched Steam. It is an aspect of Valve Corporation that is a set of tools that help developers and publishers build their games and distribute on Steam. More simply, it is a video game digital distribution service that provides automatic updates for games and allows for expansion to include games by third parties. It accounted for around half of digital PC game sales by 2011. By 2012, Valve Corporation was the most profitable company per employee in the US. It has 94 million monthly active users and 1 trillion daily impressions. Now those are some impressive statistics. In 2011, an article in Forbes stated that Valve experienced a 200% year-over-year growth in 2010; whilst saying it had grown more than 100% year-over-year for the past six years. This demonstrates the company’s continued and constant growth, and it does not seem to be slowing down anytime soon. Newell also comments that the PC game market is healthy and so Valve will benefit from this.
Are there any gaps in Valve Corporation and its products?
Newell has recognised gaps in the company; these include mobile and motion-gaming. He comments that mobile systems are getting extremely strong and have a lot more content. Valve has also not had the time to invest in motion gaming such as PlayStation Move. Another potential downside to Valve is their restricted demographic of mainly male gamers downloading PC games. Therefore, if Valve Corporation wanted to continue to grow, they may need to target other audiences.
Why can’t you buy stock in Valve Corporation?
You cannot buy Valve Corporation stock. This is because it is a private company and Gabe Newell, CEO, wants to keep it that way. A privately held company means that its founders or a private investor own it. In Gabe’s case, he and Harrington put their own money into starting Valve and then continued to grow through their initial games’ success. It also means that stocks or bonds are not sold on the public market, as there is no need to raise money to fund the company’s growth in this way. Whereas a public company is one that has sold all or a portion of itself to the public, meaning shareholders have a claim to a part of the company’s profits and assets. Why is Valve continuing to be a privately held company, when many companies are publicly traded? The answer is that Newell does not want to have the products of Valve Corporation influenced by the people who fund them. Some people comment on the fact that Valve Corporation has the freedom not to need change. Due to them having a large share of digital distribution in the gaming world, they earn enough money to contain themselves. Newell doesn’t discuss the company’s finances. Still, Forbes estimates, through consulting with video game industry insiders, investment bankers and technology analysts, that the enterprise value of Valve is more than $3 billion. Newell owns more than 50% of the company.
Will Valve Corporation stock ever be available in the future?
Research suggests that there are three main reasons why a company would go public. One is that investors want to exit, and therefore people need other means to create money to fund the company’s growth. However, this does not apply to Valve corporation because it has no private equity investor, as Gabe Newell, with his partner Harrington, created the company from their own personal savings. A second reason would be that the founders want to become richer through gaining more money from investments. However, Gabe is already worth an estimated $2.9 billion (2020). Thirdly, the owner wants to retire, but some people suggest that Valve would be sold to Microsoft rather than going public. These three reasons are clearly not relevant to Valve Corporation, and therefore I cannot see why buying stock will be available in the future.
What are some other similar companies you could buy stocks in?
You can buy stock in Valve Corporations competitor, Rockstar Games. It competes in the gaming industry with Valve; however, the difference is that Rockstar Games is a publicly-traded company. This means that you can buy Common Stock (TTWO), and the net worth of the company is over $3.5 billion. Why would you want to invest in them? Well, they have created some big titles such as Grand Theft Auto and are likely to do many more in the future – so it is a question of if you want to be a part of this.
To summarise, you cannot buy stock in Valve Corporation at this moment. They are keeping things private and are therefore not allowing the public to buy stocks in the company. It is wise not to factor this into any future investment plan as it doesn’t appear to have plans to go public anytime soon. We hope you have found this article informative and now understand a bit more about the company and its decision to avoid becoming a publicly-traded company.