Candy Crush Going to Wall Street

Posted by on Mar 23rd, 2014

Investors have become hungry over initial public offerings and something sweet is in the pipeline for them.

The makers of the hugely popular Candy Crush Saga, King Digital Entertainment, is one of more than a dozen companies ready to have their IPO’s this week.

The company, based in the UK will list in the NYSE under KING, their ticker symbol and is planning to sell as many as 22 million shares priced at between $21 and $24 a share.

Based upon a midpoint of that price range, King could have a market capitalization of more than $7 billion. Annual revenue at King was $1.9 billion with a profit of close to $568 million for 2013.

Compared to some rivals like Activision and Zynga, King’s stock could be fairly valued an analyst said. The analyst specializes in making investments that are pre-IPO, but own no stake in King. Zynga has a worth of more than $4 billion while its rival Activision is worth close to $15 billion.

The analysts said some investors might be concerned that the profits for King are tied too closely with the success of just one game. However, the analysts said the profit margins for King were strong and the revenue growth over the last year was an incredible 1000%.

Even though the stock market has been volatile of late because of geopolitical worries, the Nasdaq, which is tech heavy, is up over 2% thus far in 2014. That has helped to fuel the big demand for new IPOs.

In the U.S., thus far in 2014, 53 IPOs have been offered. For the same period in 2013, there were only 30 companies that offered initial public offerings.

At the current rate, IPOs in 2014 would rival the 222 total of last year, which was the highest amount of IPOs since 2000.

The majority of stocks making their debut this year have been able to outperform the rest of the market. This year’s average IPO has been 35% higher from its initial offering prices thus far.

Castlight Health a software company specializing in healthcare, which debuted in early March, has doubled its original offering price.

Biotech Dicerna Pharmaceuticals went public in January and has increased in value by over 180%.

On Friday, Versartis a biotech company surged more than 50% from its original IPO price.