Candy Crush Firm Slumps In Market Debut
The British creator of the popular mobile game Candy Crush Saga has been given the cold shoulder as it made its public trading debut on Wall Street.
The stock price for King Digital Entertainment plc dropped 15.6% on its first day of trading, ending the session at $19 (£11.46).
The slump gives King a market value of $5.98bn (£3.6bn) - well below the estimate of $7.1bn (£4.2bn) that was made hours before its debut on the New York Stock Exchange.
The initial public offering (IPO) valued the shares at $22.50 (£13.60), but they opened at $20.50, down almost 9%.
The company raised $500m (£302m) in its IPO to help fund future development and expansion.
King has become hugely profitable based on the success of three games - Candy Crush Saga, Pet Rescue Saga and Farm Heroes Saga - even though it has 180 titles in total.
The company has more than 324 million monthly unique users and operates a website with 14 languages.
However, many investors have been wary of games firms with a limited range of products.
They cite the demise of Zynga - a one-time market leader on Facebook with its Farmville game - as an example to avoid.
King has offices in Stockholm and London, and games studios in several European cities.
It was founded in London originally as Midasplayer Ltd in 2003 before King Digital was registered in Dublin last July, to assist in inter-country transfer pricing, and "intended to provide us worldwide tax efficiencies".
Midasplayer directors include Swedes Sebastian Knutsson 45, and Lars Markgren, 50, and Italian CEO Riccardo Zacconi, 46.
Its website, through which players can buy "freemium" game tokens, is domiciled in Malta.
In January, it posted a blog explaining its reasons to buy the EU trademark for the word "candy" and application for the US equivalent.
It said the reason was to protect its intellectual property (IP) and thwart competitors trading on its name.
In its February US IPO listing document, King warned potential investors that unauthorised distribution or piracy, particularly in Asia, might harm its revenue and entail costly litigation to protect its IP.