Mobile-game maker queen Digital Entertainment PLC command test investors' confidence now its capability to make supplementary hits like its "Candy Crush Saga," bearing in mind pricing its opening shared offering Tuesday by the side of a $7 billion valuation.
The startup assumed it sold shares by the side of $22.50, the midpoint of its likely $21-to-$24 value range. The shares are likely to open trading on the just starting out York accumulation altercation on Wednesday under the ticker "KING."
By the side of $22.50, the deal raised $350 million in favor of queen and an extra $150 million in favor of primitive investors such having the status of private-equity dense Apax Partners LLP. The company and its shareholders sold 22.2 million shares. They arrange granted underwriters the option to push an other 3.3 million shares.
Though "Candy Crush Saga" has happen to a household name—attracting 97 million day after day enthusiastic users survive month—King's IPOdidn't arrange particular of the tattletale cryptogram of investor notice with the aim of surrounded debuts by other consumer-aimed Internet companies like Facebook Inc. FB +1.23% and Twitter Inc. TWTR -1.82% folks companies both motto sufficient investor demand in favor of their offerings to push shares in favor of top prices than they'd originally intended.
Queen bowed a $567.6 million profit survive time having the status of its revenue rose 11-fold to almost $1.9 billion, underlining the winner of "Candy Crush Saga," survive year's top-grossing app authorization now the U.S. On policy using Apple Inc. AAPL +1.08% 's iOS operating structure, according to data bringer App Annie. But particular analysts say with the aim of game's greatest economic days are behind it, raising the question of whether queen can show again its ancient times winner.
Meanwhile, "Farmville" maker Zynga Inc. ZNGA +2.98% 's stock-price slide now the time following its IPO position a uncertain precedent in favor of debuts by online and mobile-phone videogame companies, now the eyes of particular investors. Having the status of of the hottest close, Zynga's shares were down 52% from the company's December 2011 IPO value. The shares arrange recovered somewhat of minute, rising 27% now 2014 through Monday, amid topical purchases by encircle funds such having the status of Millennium Management LLC and Tiger total Management LLC, according to FactSet.
"The standard characterize with the aim of natives apply to illustrate this kind of [business] is hit-driven," assumed Rett Wallace, chief executive of private-company inquiries and data bringer Triton inquiries LLC.
"For all of the claims with the aim of Zynga made—and queen makes the request too—that they arrange a scalable, repeatable process, it a short time ago turns unfashionable with the aim of the alchemy of figuring unfashionable a incident with the aim of billions of natives are free to apply all the instant is really grueling," Mr. Wallace assumed.
However, queen is seeking a relatively modest valuation versus particular of its peers, particular analysts say. Sterne Agee & trickle Inc. Analyst Arvind Bhatia estimates the company's revenue command grow to $2.49 billion this time. By the side of the IPO value, it would be located trading by the side of 3 time his sales estimate. Zynga trades by the side of 5.5 time analysts' usual 2014 sales forecast.
On a price-to-earnings basis, queen would besides be located valued by the side of a reduce to established videogame companies like Activision Blizzard Inc. ATVI +0.48% and Electronic Arts Inc., EA +1.00% according to Mr. Bhatia.
"They're being frank with investors regarding their slowing growth rate, which I think is supportive," assumed strip Romero, portfolio administrator by the side of Connective principal Management LLC, a Palo Alto hedge-fund dense with $120 million under management. He assumed now an interview otherwise the pricing with the aim of he intended to try to good buy shares now the deal.
"They need to be located able to generate just starting out games and successfully develop and marketplace their new-game pipeline to supplant the revenue with the aim of command certainly be located lost as soon as toffee Crush begins to decline," Mr. Romero assumed. "And they arrange such a pipeline."
A queen spokesman declined to comment on analyst and investor view on its topic, saw it was now a understated episode around its IPO.
King's other games include "Bubble Witch Saga" and "Pet Rescue Saga." Like toffee Crush, these arrange besides cracked the top-five lists of day after day enthusiastic users on "primary platforms" such having the status of Apple's iOS, the company says now its IPO leaflet.
"Farm Heroes," in favor of exemplar, which queen launched now the Apple app save now January, has been surrounded by the top 10 highest grossing apps in favor of the iPhone surrounded by U.S. Users each date since primitive February, according to App Annie. But "Papa Pear," which launched having the status of a cellular phone app survive November, has fallen inedible from the top 30 highest-grossing iPhone apps now January to the top 40 now protest rally, App Annie data showed.
And now the survive three months of 2013, "Candy Crush" accounted in favor of 78% of King's nasty bookings, a economic metric like to revenue, according to its leaflet.
J.P. Morgan hunt JPM -0.23% & Co. Is leading the deal with believe Suisse troupe AG CSGN.VX +0.70% and pile of America BAC -0.92% Merrill mob.
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