King Set To Release IPO Price Tuesday
Today is the day that King is set to release their price to investors for their IPO. The makers of Candy Crush are trying to raise $533 million with their initial public offering.
The shares are expected to be priced between $21 and $24 per share. Not only is this a big risk for King but for the tech community as a whole. This will show whether or not people are interested in investing in tech companies, especially mobile gaming companies.
If they price their shares at the higher end of the spectrum ($24) and offer 15.5 million shares, the company could be valued at $7.6 billion. In 2013, the company generated over $1.8 billion in revenue. Their competitors, Zynga, revenue was only $873 million. Although, this is a substantial amount for a gaming company, they have many more employees than King. Since Zynga debuted their IPO in 2011, their hit game “FarmVille” became a one hit wonder and fell down the charts. However, King features many other games including “Farm Heroes Saga”, “Pet Rescue Saga” and “Bubble Witch Saga”.
With King’s revenue dropping 3% between the third and fourth quarter, could this mean a bad investment and another Zynga? Investing into this company will definitely be taking a chance. The gaming environment is volatile, with new hits coming every other week. Many games become ‘one-hit wonders’ and lose popularity when a better game is released.
Candy Crush Saga attracts over 97 million users, but Kings other games only account for 20 million active users. If Candy Crush were to lose popularity, a huge chunk of their users would be lost. However, people believe that King will continue to create popular games that have longevity in the mobile gaming community. Although this IPO is a risk, if they continue to produce hit games, then the investment would have a nice return.
Featured Image Via: aol.com
