King files updated IPO offering, hopes to raise $532.8 million

TAGs: candy crush, gambling, IPO, king, king digital entertainment

photo-candy-crushKing Digital Entertainment’s muscle-flexing from high above its tech throne could result in an even heftier financial windfall for the company if its anticipateed IPO offering proves to have as much success as its incredibly addictive game, Candy Crush Saga.

The Dublin-based company has been floating around the idea of an IPO filing for the better part of a few months now, and after a whole lot of discussions within the company, the green light was finally turned on with the filing of an updated F-1 with the SEC, pricing 22.2 million shares between $21 and $24 million. The objective, as has been speculated, is to raise as much as $532.8 million and value the company at $7.6 billion.

Those numbers carry a lot of 0’s in them, a meteoric rise to prominence for a company that reported a meager-by-comparison $164.4 million with profits of just $7.8 million in 2012. But a lot of things have changed since that time for King, including a growing number of addicted gamers willing to spend hours on end trying to crush candy. With the incredible success of Candy Crush Saga – it accounted for 78 percent of King’s $1.884 billion in revenue last year – King is taking full advantage of its workhorse game to convince the public market to splurge on highly successful tech iPOs, especially one that features a game centered around a lot of candy-bustin’.

Understating the popularity of Candy Crush seems to be a foolish undertaking at the moment, not when the game still boasts¬† an average of 144 million daily active users who play the game more than 1.4 billion times per day, including yours truly, who has been stuck on Level 425 far longer than my sanity can take. (Damn you, tornadoes!). But some sectors of the business community seem to be of the belief that Candy Crush’s popularity has indeed peaked, pointing to King’s Q4 2013 – sales from in-game purchase fell from $648 million to $632 million with net income also sliding from $290 million to $268 million – as evidence that those chocolate balls are close to expiring.

Should Candy Crush’s sales figures continue to decline, King doesn’t have the advantage of another popular title to fall back on. In fact, the company’s second biggest game, Pet Rescue Saga, only has less than one-sixth of the money maker’s user base.

So while the proverbial iron is hot, share holders of King Digital, which includes Apax Partners and its 48 percent stake in the company, is trying to get what it can with the IPO filing. It’s a solid business decision that ought to provide a springboard for bigger success this year.¬† So when the time comes that King starts trading as KING on the New York Stock Exchange, there’s enough reason to believe that companies are willing to pay up to get a piece of Candy Crush Saga for as long as the game’s popularity continues to rake in the millions.


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