Feb 18 (Reuters) - Mobile gamemaker King Digital Entertainment Plc, best known for the hit puzzle game Candy Crush Saga, said it planned to raise up to $500 million in an initial public offering. The Dublin-based company had filed confidentially for an IPO with the the U.S Securities and Exchange Commission in September. JP Morgan, Credit Suisse and BofA Merrill Lynch are among the lead underwriters for the IPO.
I've heard too much about the issues regarding this company and independent developer Albert Ransom to be comfortable investing in this company. So I have to take a moral issue with this one. The two ideas might seem totally contrary to one another to some, but I think holding to a certain sense of morality above the desire for profit will itself turn out to be the best policy for all economies. If you ever glance at my Bio you will see that I start it off tongue-in-cheek by calling myself a Yahweh'ol'ogist. If it's not obvious I won't explain that unless someone asks. But suffice to say I have good reason to try (and fail often enough) to make investments in companies that aren't harming others. If I didn't know about the issue regarding developer Albert Ransom, I wouldnt' have an issue. Oh well, on to the next investment
GottStock, that really depends on how you look at it. Everyone has a different point of view and for some most companies "harm others." Be it having production in countries with lower wage, using materials produced in countries with questionable workforce, or quite simply by being even listed in the stock exchange. So "harming others" is a very broad subject and what is or is not included in that depends on the person and his own morals/ethics. I won't touch this company, not even with a large stick. No one knew who they were and they probably weren't that profitable. Now they managed to make one famous game and gained a lot of publicity and the owners want to turn that into cash. Looks to me like a classic "there is huge hype around our company, we could probably sell our little business and make millions" kind of situation where the only ones profiting are the previous owners.
This could be a profitable investment, since the static costs of the company are probably very low and does not need much investment. And still day make lots of money through their apps with every passing second. On the flip side, the company is not diversified enough to handle a possible balloon pop of the Apple appstore -for a reason we can not foresee now. It might be seen as an opportunity to diversify our own portfolio though...
I haven't looked too much into this, but what other products do they have? Because everyone knows them because of candy crush saga, that's the app bringing profits and all the hype. Take away candy crush saga, and what are you left with? This is worrying especially since candy crush saga might be a bit harder to commercialise than say, angry birds.
Certainly there's a lot of risk in investing in a company that has one big product in a market where each game is kind of a fad that is typically replaced. But the IPO went poorly and at some point it's a good value. Normally I only buy dividend stocks but KING isn't looking bad to me at a P/E of just above 4.
King Digital Entertainment plc (KING), maker of the sweetly addictive game Candy Crush Saga, was priced for an initial public offering (IPO) late Tuesday at $22.5, near the midpoint of a projected range of $21-24. The company has so far raised $500 million by selling 22.2 million shares – which puts its valuation at nearly $7 billion. Of the total shares being sold, around 70% will be sold by King, while the rest will be sold by shareholders. The stock will debut trading today on the New York Stock Exchange under the ticker symbol 'KING.'
It's generally better for most to wait a couple of quarters before investing much or anything in an IPO. Gives you a chance to see how the fundamentals are going, and also for the inevitable insider selloffs that usually occur. As for morals, I can certainly understand some people's need to limit investments to socially responsible offerings. Plaintiff attorneys, environmentalists, and religious folks tend to fall into this category. But not me.
This is such a ridiculous valuation. Of course, it's hard to put a value to this sort of company but this is breaching new heights of ridiculousness. I would strongly wait out the IPO because even if you strongly believe in the company, you'll probably be able to buy-in at a better price once it corrects. This reminds me of the twtr ipo.
