Seeking Alpha

King sells off following IPO

  • With fears of Candy Crush Saga dependence and slowing growth weighing heavily on investors, King Digital (KING) opened at $20.50 and has quickly fallen to $19.94, down 11.4% from an IPO price of $22.50.
  • The social/mobile game developer has a market cap of $6.3B, or 3.2x 2013 bookings.
  • Zynga (ZNGA -2.7%) is moderately lower.
  • King's prospectus
Comments (23)
  • Overanalytical
    , contributor
    Comments (816) | Send Message
     
    Cramer gets another one wrong. He predicted a spike today
    26 Mar 2014, 10:09 AM Reply Like
  • dezee
    , contributor
    Comments (2152) | Send Message
     
    Iheard him say high momos arent working from YELP NFLX TSLA PLUG, even recent IPOs
    26 Mar 2014, 10:17 AM Reply Like
  • NUNAY the KING
    , contributor
    Comments (243) | Send Message
     
    Plenty of Cramer haters out there. But you must have taken info out of context. Cramer repeatedly said that there would be something "wrong" with the market if these high flying IPO's continued to shoot to the upside.
    26 Mar 2014, 11:56 AM Reply Like
  • Overanalytical
    , contributor
    Comments (816) | Send Message
     
    It was a specific segment on the KING IPO and how it was completely different from Zynga.

     

    http://cnb.cx/NU3Kkb

     

    I don't "hate" Cramer. I watch him when I can. It's just that it doesn't matter if you like a company. It's if the market likes (or will like) the company that matters. And Zynga is still fresh on Wall Streets mind.
    26 Mar 2014, 12:03 PM Reply Like
  • e92m3
    , contributor
    Comments (147) | Send Message
     
    Cramer...Come now, do you guys play follow the leader or form your own conclusions?

     

    (Not really replying to you specifically Overanalytical, I think we have a similar opinion.)

     

    He's another figurehead repeating outdated information collected by staff members, often drawing illogical conclusions based on nothing more than emotion. Any of you are perfectly capable of figuring out comparable or superior strategies on your own long before he he even mentions the options in question. Sure, watch him to know what the uninformed investor is probably going to do, that's really the only value in his speech.

     

    This is a completely ridiculous IPO and it will steadily fall because the entire basis of value is in foolish children on their smartphones with the attention span of freshly-emerged gnats. They will be on to the next incredibly unoriginal trend before any of you 'investors' (hahaha, right.) have a damned clue what happened.

     

    Do not reply to me with your Cramer apologist nonsense, nor your nonsensical justification of such an idiotic cut-and-run IPO, I really don't have time for your amateur whining. Go long, I dare you.

     

    Those looking to short: well, you know the risks and might get something out of this, we will see. I do wish you luck, because you sniffed out the only real possible value in this IPO. Hopefully, there are enough of Cramer's Children here to dilute the shorts (I'm guessing a large portion of the action is from those looking to short).
    26 Mar 2014, 03:26 PM Reply Like
  • dezee
    , contributor
    Comments (2152) | Send Message
     
    Can you explain King's decline then?
    26 Mar 2014, 06:19 PM Reply Like
  • Nicholas Pardini
    , contributor
    Comments (423) | Send Message
     
    Cramer just says what his audience wants to hear. He lost all his credibility with the Bear Stearns debacle. On the case of KING, it seems like a good short as Candy Crush alone is not a viable business model and it will likely struggle just like Zynga did after its IPO.
    26 Mar 2014, 07:37 PM Reply Like
  • dezee
    , contributor
    Comments (2152) | Send Message
     
    Bear Stearns money in acct not stock was what he meant,obviously taken out of context.
    26 Mar 2014, 08:31 PM Reply Like
  • inkyx
    , contributor
    Comments (482) | Send Message
     
    I've been playing Candy Crush as well as another King game for the past few days, and I predict King will go down further. Long ZNGA.
    26 Mar 2014, 10:10 AM Reply Like
  • AutoRegressive
    , contributor
    Comments (193) | Send Message
     
    I was hoping this thing took off today so I could short it.
    26 Mar 2014, 10:15 AM Reply Like
  • chopchop0
    , contributor
    Comments (3621) | Send Message
     
    I think people finally started realizing what might happen from the IPO after seeing ZNGA post-IPO therefore no spike this time.
    26 Mar 2014, 10:28 AM Reply Like
  • Renmycat!
    , contributor
    Comments (717) | Send Message
     
    it will be awhile before you are actually able to place a short trade. i think the whole float is locked up for a bit
    26 Mar 2014, 11:52 AM Reply Like
  • AutoRegressive
    , contributor
    Comments (193) | Send Message
     
    Looks like I can short it now on interactive. I'm not brave enough after a 10% drop.
    26 Mar 2014, 01:22 PM Reply Like
  • StepUp
    , contributor
    Comments (482) | Send Message
     
    Damn relax - its been trading for an hour
    26 Mar 2014, 10:29 AM Reply Like
  • clietus
    , contributor
    Comment (1) | Send Message
     
    It's going down ,it's going down .
    26 Mar 2014, 10:48 AM Reply Like
  • Floyd410
    , contributor
    Comments (53) | Send Message
     
    Here is the issue with a stock like this. On the face you look at the financials and say. "Hey 1.86 EPS in 2013. If I can get it at $20 bucks thats 10.75x current years earnings. Great deal right"? And how many were shocked to even see $2 billion in revenue and $500m in profits. I was pretty surprised. But its actually a trap. Any company that has 75% of their revenue from 1 game is going to be extremely volatile. Especially considering this industry is so competitive with such easy barriers to entry. If they don't pump out new hits that $2 billion can quickly disappear.
    26 Mar 2014, 11:55 AM Reply Like
  • e92m3
    , contributor
    Comments (147) | Send Message
     
    Yes, exactly.

     

    I don't understand why anyone believes this simple mobile game has some magic formula to sustain a simple fad/trend long term. They didn't even develop the damned base concept for this application, which means they have limited capacity to achieve comparable success again.
    26 Mar 2014, 03:37 PM Reply Like
  • Manitobatex
    , contributor
    Comments (708) | Send Message
     
    Candy Crush is like buying a candy bar that has already had a bite out of it... Yuk.
    26 Mar 2014, 12:06 PM Reply Like
  • RiCk Jr
    , contributor
    Comments (84) | Send Message
     
    dude i cant believe people are buying into 2013 app. its 2014 now and out of maybe 100 people ive been around in the past 10days. ages from 1-75 nobody mentions or plays candy crush anymore. it was a fad. you can download an app that helps you beat all the 100+ levels now. thats no fun! people have moved on to flappy bird, and more. I would short this stock if i had more $ to play with but im currenlty tied into APPL who is providing the platform for these app purchases!
    26 Mar 2014, 12:09 PM Reply Like
  • haleiwahu
    , contributor
    Comments (3594) | Send Message
     
    ZYNGA has yet to show why their stock value has risen above $3. They only have unsubstantiated plans and hype so far.
    26 Mar 2014, 12:44 PM Reply Like
  • jammerculture
    , contributor
    Comments (402) | Send Message
     
    There is something seriously wrong with our culture.
    26 Mar 2014, 02:13 PM Reply Like
  • Seth Walters
    , contributor
    Comments (675) | Send Message
     
    Candy Crush is not worth more than Star Wars, lol. This is an obvious short.
    26 Mar 2014, 02:24 PM Reply Like
  • alkmaar
    , contributor
    Comments (30) | Send Message
     
    Sell, and short.
    26 Mar 2014, 11:13 PM Reply Like
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