“Shares in King Digital Entertainment Plc fell as much as 15 percent in their Wednesday debut, underscoring investor concern about the company’s reliance on ‘Candy Crush Saga’ and dampening hopes that its coming-out party could revive investor interest in the mobile gaming industry,” Malathi Nayak reports for Reuters. “Mobile game industry executives had looked to London-based King’s IPO, the largest by a gaming company since Zynga Inc went public in 2011, to help sweep aside skepticism over a notoriously fickle, volatile market. But King’s shares fell to a low of $19.08 in morning trade from their IPO price of $22.50, which valued the company at about $6 billion.”
“The company offers over 180 games but its two-year-old “Candy Crush Saga” game, in which users move candies to line up at least three of the same color, accounted for over three-quarters of King’s revenue for the last three months of 2013,” Nayak reports. “King’s dismal debut dragged down other gaming stocks on Wednesday. Zynga shares fell 4.5 percent, while smaller player Glu Mobile slipped 2.3 percent. When Zynga debuted in 2011 with about the same valuation as King, its stock ended down 5 percent on opening day. ‘Farmville’ maker Zynga’s market value has since shrunk to just over $4 billion, falling victim to concerns about the danger of investing in companies that rely heavily on a hit game.”
“There are some signs new titles from King’s portfolio may be gaining traction. Analysts have pointed out that ‘Farm Heroes Saga’ has seen momentum since its January mobile launch. The title has since landed on the list of top 10 highest-grossing apps on Apple’s iOS platform, but whether the game will prove to be a money-making title in coming months remains to be seen,” Nayak reports. “King sold 15.5 million shares of the 22.2 million offered, with the rest coming from stakeholders including private equity firm Apax Partners, which remains the biggest shareholder. King raised about $500 million in its IPO.”
Read more in the full article here.
Related article:
‘Candy Crush Saga’ maker King files for $500 million IPO – February 18, 2014
Buy this if you don’t need your $$…
Shocker. I should have shorted these parasitic boneheads this morning.
Whut!? A $6 billion dollar value for a company that makes mobile games?
WTF is wrong with the market?
Just give me more levels. Currently waiting for an update on level 530.
FYI – I have not purchased anything to get this far. Zero. Zip. It’s unbelievable what they want to charge for stuff.
What?! I thought this NYSE thing had in-app purchases!! How are we going to make money?!
As unbelievable as it may be, the valuation Wall Street has placed on this company makes the price Google paid for Nest seem like a bargain.
King is so bogus – they just copy other games and have no originality. It’s not like they have a VR engine or any valuable technology. I don’t get this IPO – apparently the public does not either.
It might be worthwhile to study human motivation for perceived short term gain and encouragement strategies with respect to gaming. You would find that King has done an excellent job in creating Candy Crush Saga. Although I don’t play games, I help my son to analyze games for his budding game programming career. My wife who has a doctorate in neuroemotional science helps find the scientific studies to back up the analysis.
Neuroemotional. That explains a lot.
So, you don’t know what it is?
My oppinion the market is right, just adapted to people needs or addiction, nothing to be surprised. Look at the people they target with that kind of games, all categories; but more than that look at the current generation of young people, they are the next investors 🙂
Anyway for single player games like Candy Crush Saga sometimes I use cheats or tricks to spend less money 🙂