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King IPO falters on the New York Stock Exchange
King IPO falters on the New York Stock Exchange
March 26, 2014 | By Mike Rose

March 26, 2014 | By Mike Rose
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    6 comments
More: Console/PC, Smartphone/Tablet, Business/Marketing



Social games giant King today launched its initial public offering on the New York Stock Exchange, with the Candy Crush Saga company pricing its shares at $22.50 a pop.

With its offering of 22.2 million shares in total, that means that the London-based company is looking to raise around $500 million at this price.

Notably, King had originally set an initial range of $21 to $24, meaning this initial pricing has fallen directly in the middle of the estimated range -- which, according to analysts, may not be the greatest of signs.

Sterne Agee analyst Arvind Bhatia told Reuters, "It's fair to say that if it was a very high-demand IPO, we would've seen the price at the upper end of the range. At the mid-point, it's a successful IPO but perhaps not a runaway success."

King has already listed the potential risks behind its IPO, including the fact that the vast majority of its revenue comes from a single game, Candy Crush Saga.

UPDATE: King's stock price slumped throughout the day, dropping 15 percent from its initial pricing to hit $19.03 per share by the time the market closed on King's first day of public trading.


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Comments


Jason Bentley
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A) If it had been overpriced, sales would have been slow and the end result would have been investors unhappy with their early purchases.

B) If it had been underpriced, sales would have been fast and investors happy, but King would have left money on the table.

Can someone explain to me why being accurately priced is seen as a negative in this situation or is it just complaining so that they have something to say about the situation?

Samuel Carrier
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It's negative (for King) because they're not the red-hot company they thought they were when they initially announced their IPO.

It just serves to show that King is probably not worth what they're asking and that the investors are not that willing to bet on what's looking more and more like a one-trick poney.

stephan maich
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i think Zynga gave me a prejudiced viewpoint, but i'm of the opinion that when a web service or casual gaming venture IPOs, it just means the founders are getting prepped to cash out and go do something else.

Ron Dippold
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CEO Zacconi is of course out there working hard on positive spin:

http://recode.net/2014/03/26/ceo-riccardo-zacconi-on-why-kings-ip
o-isnt-sour-candy/

Who doesn't enjoy a nice game of Damage Control Saga?

Andrew Syfret
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An IPOs 'success' is really the success of the IB to price/pitch the offering. Whether the actual price falls into the predicted arbitrary range has no reflection on the business fundamentals.

In fact the purpose of an IPO is basically to slightly rip off ( read price above actual worth ) investors as the company is supposed to use this cash to grow and return a higher rate than lower risk securities.

Tl;dr

Ignore IPO price predictions as they are fundamentally not important.

Luis Blondet
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http://piq.codeus.net/static/media/forum_pictures/grumpy-cat-good
-1_1512.jpg

I hope now investors and big game devs alike learn the lesson that quick profit, bullying and unethical practices do not translate to higher profits.


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