Candy Crush Reintroduces IPO Market Back to Earth
Candy Crush Saga may be one of the most popular games to exist at the moment in thank to King Digital Entertainment, but the same cannot be said about the social gaming company’s current stock, which had a highly disappointing IPO this week.
King Digital Entertainment had an unfortunate lost of 15.6 percent, going from its original $22.50, down to $19 on its opening day. News reports have gone on to say that “made it the worst trading debut this year, according to data from Renaissance Capital.”
When Wednesday came around for its IPO day, many investors had simple dropped the stock, Market Watch reported, with senior managing partner Scott Sweet at IPO Boutique commenting “traders immediately pulled the trigger… It’s getting pounded.”
The King IPO ended up in the same situation as Zynga’s back in 2011. Zynga had been down to about 54 percent from the price found within its initial public offerings, news reports said.
Furthermore, there were some speculations about King only having one popular game tiding them by, with no other depth to the company. The New York Times had reported that Kings receives a 78 percent gross bookings from Candy Crush Saga.
Comparing King’s experience to that of Renaissance Capital reporting that the average IPO on its initial during the initial trading day saw over 22 percent for start 2014, “far above the 13 percent to 15 percent norm.”
“Seeing the strong first-day pop, many of the pros put in for this IPO, but the interest in buying in post-IPO trading was not there,” Renaissance Capital added in the statement. “King has an amazing business but it cannot be extrapolated from current levels and the IPO price needed a greater discount.”
An estimated amount of 93 people play Candy Crush for more than one billion times a day, according to sources. But that what also causes concern about the social games future, Candy Crush’s gross bookngs, which the New York Times explains on the amount of “players pay for items in the game,” have begun to decline since Q4 of 2014.
The chief of King Digital Entertainment, Riccardo Zacconi, had responded on the highly disappointing, had commented to the Times on Wednesday, “We’re not focused on the short term. If you want to achieve shareholder value, you have to look at the long term.”