Sour market debut for Candy Crush maker

Shares of King Digital Entertainment, maker of the wildly popular Candy Crush Saga game, fell as much as 15 per cent in their trading debut on Wednesday, underscoring concerns about the company’s reliance on a single hit game.  

King’s shares fell to a low of $19.08 from their IPO price of $22.50, valuing the company at about $6 billion.  

“With King Digital, there is a lot of concern about its ability to keep coming up with popular games,” said Jay Ritter, a professor and IPO expert at the University of Florida.  

“The offer price was set at the middle of the filed price range, indicating that there was neither exceptionally strong nor exceptionally weak demand,” Ritter said.  

The two-year-old Candy Crush game, in which users move candies to line up at least three in the same colour, has a seemingly endless supply of new levels and features to keep its nearly 100 million users occupied every day.  

Its success has spawned reports of Candy Crush addiction with a Facebook page dedicated to addicts of the game, in which users get daily bonuses and new levels every few weeks. The free game has been downloaded more than 500 million times since its launch on mobile devices.

Using the “freemium” model, King makes money by selling players extra lives, lucky candy and other add-ons. King sold 15.5 million shares of the 22.2 million offered, with the rest coming from stakeholders including private equity firm Apax Partners, which remains the biggest shareholder.

London-based King raised about $500 million in its IPO. In February, King said an average 144 million daily active users played its games more than 1.4 billion times per day. King’s IPO is the largest by a mobile gaming company since Zynga Inc went public in 2011, valuing the maker of “Farmville” at $7 billion.