King shares plummet as it goes on stock market, but what will the IPO mean for the tech scene?

By Ishbel Macleod | PR and social media consultant

Carat

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Candy Crush article

March 26, 2014 | 2 min read

King Digital Entertainment made its debut on the New York Stock Exchange today, opening at $20.50 a share – down from the $22.50 it announced that the IPO would be set at.

Trading under the symbol ‘King’, shares in the maker of Candy Crush Saga is currently selling at $20.15 a share.

King is offering 15,533,334 shares and certain selling shareholders are offering 6,666,666 shares.

The problem which may be facing potential investors is that 78 per cent of revenue for King comes from ‘freemium’ app Candy Crush.

Worldwide, Candy Crush Saga is estimated to make £610,000 ($1,000,000) per day from its users, according to Appdata.

“All eyes will now be on them to see if they can reach the same amount of success with a second major stand-out title. Too often we see one hit success stories from tech start-ups who find it difficult to replicate this level. King has yet to demonstrate an ability to replicate the scale of success they’ve seen with Candy Crush,” Tanya Laird, mobile strategy director at Carat said.

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“Along with most mobile game developers, King uses data-driven digital advertising to drive its performance. If King is able to utilise this smart data approach to drive the success of its other titles is the real question that it has yet to answer. It will be very interesting to see if King is able to demonstrate that it deserves the sizeable valuation it’s been given."

It was predicted that King would raise $500m on the stock exchange.

“The decision to IPO on the New York Stock Exchange will no doubt open up a wider range of opportunities given the less well supported mobile and tech community in New York. It will certainly provide additional credibility and kudos for the talent of London’s tech start-up scene,” Laird added.

This comes as AppAnnie and IDS predicts revenue from in-app advertising will to outgrow mobile display advertising and mobile search advertising.

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