Candy Crush maker King in US$500 mil. debut
By Glenn Chapman, AFP
March 27, 2014, 12:01 am TWN
AN FRANCISCO--King Digital Entertainment raised a sweet half-billion dollars on Wall Street, and now it is time for the market to show its taste for the makers of mobile game Candy Crush.
The British game developer priced its initial public offering at US$22.50 per share on the eve of the start of public trading Wednesday on the New York Stock Exchange.
King will trade under the ticker “KING” with an opening market valuation of US$7.1 billion.
The money raised in the issue could reach US$574 million depending on demand for an additional 3.33 million that could be issued underwriters, the company said.
King's arrival on the stock market comes as investors are keen to buy into the next Internet rising industry star but wary of young companies being overvalued, especially in the world of games where popularity can be fleeting.
Established in 2002, King's business has soared in the last two years thanks to the spectacular popularity of Candy Crush Saga, which boasts some 97 million players worldwide.
The Tetris-like format requires players to line up sweets and bon bons through 500 increasingly difficult levels.
But the addictive qualities of Candy Crush, and the company's ability to monetize that by users on computers, tablets and cellphones paying extra to help them advance through levels, underpin the sky-high valuation.
The company says its games, which also include Farm Heroes and Pet Rescue, are installed on 600 million mobile devices, and played over 1.4 billion times a day — more than one billion alone for Candy Crush.
Profits in the fourth quarter reached US$159 million.
However, analysts have cautioned that King's long-term earnings viability remains questionable owing to its business heavily reliant on a single product.
Research firm PrivCo notes that King itself estimates the average lifespan of a paying player on a particular game at two to nine months.