King is a huge European company which is the maker of the
hit game called Candy Crush Saga – which has today moved one step closer
to an IPO in the US, finally filing an updated F-1 with the SEC priced
at a great 22.2 million shares ranging between $21 and $24 to raise a
total of $532 million which will value the company around $7.6 billion.
This move came some weeks after King had filed an initial F-1 with a
maximum offering price of around $500 million.
King’s moves show that despite the presence of King social games
competitor, Zyngya’s volatile stock and the argument that says that
gaming companies should stay private since most of their profits is
heavily based on their hit games, King is stepping up to take the
benefits of a public market which has largely rewarded tech IPOs.
Even if Candy Crush Saga or other popular games like Pet
Rescue Saga, Papa Pear Saga and Farm Heroes Saga might go into an
eventual decline – that may not be the case for now at least. In the
December of 2013, King claimed that it had over 128 million daily active
users who were playing its games more than 1.2 billion times per day.
As King updated today’s filing, King noticed that in the month of
February 2014, an average of 144 million daily active users played the
games more than 1.4 billion times a day. This has increased. The company
wrote in the filing: “We believe Candy Crush Saga, our top line
title up to date is one of the largest interactive entertainment
franchises of all time.” This game easily brings in about 97 million
daily active users and more than 1 billion daily gamers plays as well.
King makes its revenues from all the in-game purchases and since the
time it let go of the advertisements in its platform last year, it has
seen increased sales like anything. It was able to pull up a staggering
$1.88 billion in revenue in the year of 2013 up from just $164 million
the previous year of 2012.
The company is no doubt banking a great deal on the mobile for its future growth.
In the fourth quarter of 2013, around 73% of its gross bookings were
from its mobile audience. Reuters made an interesting case for King
trying to play another strategy: “The main reason to go public
however could just be that the IPO market is so frothy right now those
companies have to have the credible threat of an IPO in order to get the
best possible price from a strategic acquirer. Right until the day
before the IPO, King is going to retain the option to simply sell itself
to some company which wants proven expertise at making big profits in
the world of mobile-native apps. By moving towards an IPO, King is
forcing those companies to get serious about making an offer.”
King is definitely going to trade as KING for now no matter what the future beholds for the company. We wish it all the best!
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