King Digital Entertainment went public this morning on the New York Stock Exchange after raising about $500 million in an IPO that valued the company at about $7.6 billion.
But the Candy Crush maker and litigious patent and trademark holder fell short of its valuation with a tepid response from the market; shares opened at $20.50 well below the expected $22.50, and are – as of this writing – trending downward ($20.29).
Despite the less than expected price per share, today is certainly a milestone for King, but it faces a real challenge because most of its money comes from its marquee hit title Candy Crush Saga. The challenge ahead is keeping the number of people who play Candy Crush Saga steady and in encouraging them to continue spanning money on the game. The long-term challenge is to make money on other properties.
The company is already being compared to the once seemingly unstoppable social games company Zynga, who went public in 2011. The company had a lot more successful properties than King does (one – Candy Crush Saga) when it launched its IPO; now that company is trading at roughly $4.66.
We'll keep an eye on King's stock prices in the days and weeks ahead to see how it fares, but it's not getting a lot of positive press today because it has already dropped 9.78 percent in its first day of trading.