Study On Performance Evaluation Of Series Mergers And Acquisitions Of Online Game Enterprises

With the strategy of "Internet+" rising to the national strategy,the Internet industry has grown into an important field to drive the economic development of our country.The rapid development of the Internet has led to the rise of online games enterprises.Online games enterprises have gradually developed from emerging industries to mainstream industries.The number of players and scale of online games enterprises have greatly expanded.In the intense market competition,online game enterprises rely on endogenous development can't meet the needs of the market because of game products are updated quickly and game players have different preferences.Therefore,the internal integration of online games enterprises is gradually rising.Online games enterprises expect to enhance their own strength,acquire high-quality assets and seize market share through frequent mergers and acquisitions activities.Accelerate the strategic transformation of the company's development,improve the diversified layout of game products,constantly consolidate the main business of the game and improve the company's operating performance.This paper chooses Beijing Palm Fun Technology Co.,Ltd.(Abbreviated as "Palm Fun Technology")a typical representative of a series of M&A in the online games industry in recent years,to study the series of mergers and acquisitions launched by the company between 2013 and 2015 after its listing.Firstly,on the basis of literature review,this paper expounds the motivation of M&A series and the theoretical basis of M&A performance research methods.At the same time,combined with the development trend of M&A in online games enterprises,the characteristics of online games industry and the strategic layout of the company's own extension development,this paper analyses the motivation of "Palm Fun Technology" to initiate a series of M&A.Secondly,the event study method is used to analyze and evaluate the stock price changes after each merger and acquisition according to the time sequence of the merger and acquisition bill announcement.This paper uses financial index method and non-financial index method to analyze the financial data of one year and three years before and after the series mergers and acquisitions,and comprehensively evaluates the company's performance before and after the series mergers and acquisitions.Finally,the author makes an analysis of the specific problems found in the performance evaluation of M&A series,and draws the conclusion and Enlightenment of this paper.Through the analysis,it can be concluded that at the market level,the publication of a series of M&A announcements has been recognized by the market,and has increased wealth effect of the company's shareholders.At the company level,the company's operating performance has been improved because of a series of M&A dominated by the extension development strategy.At the same time,the injection of high-quality assets has increased the market share of the company's game products,and the addition of core R&D team has greatly increased the company's R&D strength."Palm Fun Technology" has gradually formed a diversified product matrix,and the synergistic effect of the company has been fully demonstrated.However,the problems in frequent M&A of "Palm Fun Technology" can't be ignored.Firstly,the high premium caused by M&A has greatly increased the total assets of the company.The huge goodwill brought by high premium has the risk of impairment at any time,which makes the profitability and operating efficiency of the total assets in a low level.Secondly,"Palm Fun Technology" excessive relies on the performance commitment of the target company to achieve its own profit growth goal.The profit growth of "Palm Fun Technology" lacking in strength.Finally,because the game products have the characteristics of fast updating,it is urgent to improve the sustainable delivery ability of the products.This paper hopes to provide some useful suggestions for the future M&A activities initiated by online games enterprises in China by analyzing the changes in the M&A performance of"Palm Fun Technology".