|
 The offering marks the largest United States IPO from a booming
mobile gaming industry that has been keen to emerge from the shadow
of Zynga Inc, the social gaming firm that lost half its value after
a 2011 IPO that valued it just below King at $7 billion.
London-based King priced its IPO at $22.50 per share, with the stock
to debut on the New York Stock Exchange on Wednesday. Its offering
of 22.2 million shares would raise about $500 million at that price.
"It's fair to say that if it was a very high-demand IPO, we would've
seen the price at the upper end of the range," Sterne Agee analyst
Arvind Bhatia said. "At the mid-point, it's a successful IPO but
perhaps not a runaway success."
Even if King, whose other games include "Bubble Witch Saga" and
"Papa Pear Saga", pulls off a strong debut, the real test will be
the stock's staying power in coming weeks and months. King hopes to
avoid Zynga's fate by virtue of a stronger focus on a mobile gaming
market worth an estimated $17 billion.
"What's more important than the price is how it trades tomorrow and
in coming sessions," Bhatia said. "If the investors are in because
they expect a quick profit and it doesn't happen because it doesn't
get a lift, people will exit quickly."
Founded in Sweden in 2003, the company has drawn plaudits for
transforming "Candy Crush Saga" into a household name that was the
most downloaded and top-grossing free app of 2013 on Apple Inc's app
store.
King, formerly known as "King.com", was saved from bankruptcy only
by a last-minute infusion of investor capital on Christmas Eve in
2003 and survived to eventually turn a profit in 2005 and every year
since.
But it relies on its marquee game for over three-quarters of its
revenue — a red flag for investors. They warn of the dangers of an
industry where games like "Draw Something", a one-time hit from
Zynga's OMGPop studio that was shut down a year ago, can top the
charts and then quickly fizzle.
[to top of second column] |
The stock's debut on the Big Board on Wednesday, under the ticker
"KING", will be closely watched by youthful rivals like San
Francisco-based Kabam and Kixeye — known for strategy games like
"Kingdoms of Camelot" and "War Commander" — which are expected to
seek market listings or new financing.
King sold 15.5 million shares in the offering. The rest is being
offered by selling stockholders, including Apax Ventures.
Apax is the company's largest shareholder and will retain a 44.2
percent stake in the company, if underwriters fully exercise their
option to buy shares.
Riccardo Zacconi, who has led King since co-founding the company,
will hold a 9.5 percent stake in King after the IPO.
JP Morgan, Credit Suisse and BofA Merrill Lynch acted as lead
underwriters for the offering.
(Reporting by Avik Das in Bangalore and Malathi Nayak in San
Francisco; editing by Cynthia Osterman and Kenneth Maxwell)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
