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‘Angry Birds’ Hatches Angry Investors

Rovio’s IPO was set to soar, but the company is too dependent on its flagship game.
Angry Birds’ Red joined Rovio’s listing ceremony in September.

Angry Birds’ Red joined Rovio’s listing ceremony in September.

Photographer: Outi-Kaisa Ollikainen/Nasdaq

When Rovio Entertainment Oyj went public in September, investors eager to grab a piece of the producer of Angry Birds flocked to the stock, making it Finland’s hottest share offering in a decade. These days, Rovio looks about as airworthy as a clay pigeon.

After a promotional campaign that included neon billboards, full-page newspaper spreads, and bus ads featuring the company’s trademark scowling fowl, thousands of Finns submitted buy orders with their brokers. Although the initial public offering gave Rovio a market value of €900 million ($1.1 billion)—half what the company had first aimed for—the stock got a small bounce when a bank backing the IPO started purchasing shares to “stabilize” the price. That effort ended in October, and after Rovio on Nov. 23 disclosed that its marketing costs had soared, the shares dove 22 percent, spurring many buyers to think they’d gotten a turkey. “I’m disappointed in what they had led the market to believe,” says Tomi Lahti, a Helsinki investor who bought stock in the offering.