Wednesday March 26 2014
The popular video game maker King Digital, makers of Candy Crush, came public today. HEre is the
F 1 or SEC Registration Statement. Please take a look at what the SEC requires under the Act of 1933.
Stocks first come public via an IPO or Initial Public Offering. King Digital came public today at $22.50 per share. So how is it doing?
King Digital
Each bar represents five minutes of trading. Which is to say it never really traded at 22.50 and sold off rom the get go, just like FB when it came public. But King is a game maker and FB well gee, we are told has much more potential, as everyone is on it. So we are told, perhaps the idea is that with that many players, surely there is a way to make money from it, sort of like the idea of selling to China with one billion customers.
I have never played Candy Crush but I did just read about it and it strikes me like Farmville, so what, but let's take a look at ZYNGA.
As you can see, expectations were a bit on the high side for that one as well. The drop from 16 to 2 was a drop of 87%. That is a pretty poor estimate on the part of the underwriter.
Ideally the underwriter prices the stock such that it goes out at the IPO price and then rises a bit the next week. Then the buyer and seller can be happy.
More to follow, hope this finds an appreciative audience.
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