From today’s New York Times DealBook blog:
The maker of Candy Crush Saga, the hugely popular puzzle game, said on Wednesday that it hoped to raise as much as $532.8 million in its initial public offering, valuing the company at nearly $7.6 billion.
In a revised prospectus, the company, King Digital Entertainment, said it planned to price its shares at $21 to $24 apiece. At the midpoint of that range, the company would raise $499.5 million and be valued at roughly $7.1 billion.
Should demand prove higher than unexpected, the game developer’s underwriters can sell additional shares in what is known as a greenshoe option, pushing the maximum size of the offering up to $612 million.
The mind reels. Analysts are troubled by Apple’s current stock price, proclaiming doom and gloom. But Candy Crush? They can’t wait to get their hands on this stock. I just don’t get it.
“Analysts are troubled by Apple’s current stock price, proclaiming doom and gloom. But Candy Crush? They can’t wait to get their hands on this stock. I just don’t get it.”
I don’t see that in the article at all. In fact, the analysts specifically mentioned seem skeptical about their ability to maintain their success.
“But King’s disclosures have led many analysts to question whether the game maker can continue to thrive as a public company once its biggest hit begins to fade in popularity.”
One hit wonder. Consumers are fickle and don’t associate the next trendy game with any one company. If King (or investors) thinks it can bottle lightning twice then I don’t know what to say. Seems extremely high risk at that valuation, or any valuation. They could done overnight if people decide the next Flappy Bird is what should command their attention.
Yes. Analysts aren’t quite that stupid.
King’s desires for its IPO are not the result of analyst expectations.