Atari acquires 7.5% stake in tinyBuild for $2 million, sending company's stock up 70%

In the wake of financial challenges, tinyBuild has announced a strategic partnership with Atari. As a result, the French holding company will own a 7.5% stake in the studio.

• As tinyBuild announced in a note to investors, Atari SA entered into the private placement agreement to acquire 31.4 million shares worth $2 million.
• Overall, tinyBuild palns to raise $14 million through the issue of new common shares. The move should be approved by shareholders during a special meeting on January 18, 2024.
• “Atari is excited to participate in the current capital transaction as tinyBuild’s approach to the indie games market is in line with Atari’s long-term approach,” CEO Wade Rosen said in a statement.
• Proceeds from this emergency funding should help tinyBuild “strengthen its balance sheet” following the many headwinds it has faced in 2023.

Since the beginning of the year, tinyBuild shares have plunged 96.5% (see the image below). However, the announcment of the $14 million fundraising caused the stock rise. At the moment of writing, it is trading at £4 per share, up 71% compared to the past five years.

However, the price is still well below tinyBuild’s all-time high of £293 per share reached in April 2021.

tinyBuild share price from January 1 to December 21, 2023

The Hello Neighbor publisher reported an operating loss of $31.9 million for the first half of 2023, which was a huge decline compared to an operating profit $6.8 million in the samer period last year. CEO Alex Nichiporchik said he was disappointed with the company’s performance.

After that, tinyBuild started considering a “targeted reorganization” and decided to move away from third-party publishing. Earlier this month, it laid off dozens of employees across its in-house studios, with Nichiporchik saying that the “only reason to justify this decision is that the company has entered a pivotal stage and I am committed to do everything I can to ensure we get through this tough period.”