Candy Crush Saga may be great at taking all your money, but it didn't fare so well at making investors money during its IPO this morning. In their first day on the market on Wednesday, King Digital, the company behind the popular mobile game, saw its shares fall 15 percent from their opening sale price of $22.50, down to a low of $19.08.
Although, the company is already drawing comparisons to the poor market fare of Zynga, the day's not quite over yet. The company's IPO valued it at around $7 billion. Even with the dip factored in, the games company is still worth about $6 billion. After its low, the stock rebounded to trade at about $20.08 a share. (As of the writing of this post, it's about $19.60)
As the Guardian explains, the next few hours will see traders and banks duking it out to write the ending of King's day one story. Traders are wondering whether King's Candy Crush is its one-hit wonder, while its underwriters are going to try and fight that idea (and defend their work setting the price.)
When pricing its IPO on Tuesday, King heeded the concerns among investors that it may be unable to produce another game as profitable as Candy Crush by opting for the midpoint in its projected $21 to $24 a share price. The shares began trading firmly below that $21 floor. The seven underwriting banks, JP Morgan, Credit Suisse, BofA Merrill Lynch, Barclays, Deutsche Bank, and RBC Capital Markets were expected to rush to King's defence by buying up shares to prop up the price, in a tussle with speculators that will continue until the closing bell.
King's revenue relies on the two-year-old Candy Crush Saga game, which competes in a flooded market to avoid being overtaken by the next big (game on your phone) thing. Currently, it has just under 100 million users.