Editor’s note: This article was first published in February 2014, when King had just filed for its US IPO; the user, profit and revenue figures come from that filing. King went public in March 2014 and was acquired by Activision Blizzard in 2016.
The company behind the popular and addictive game Candy Crush, King Digital Entertainment, which is based in Dublin and has offices across Europe and in San Francisco, has said it intends to file for an IPO in the United States, according to the New York Times.
The company, which has real momentum with more than 128 million daily users hooked on its games, hopes investors will be keen to buy its shares and that it will reach a market value of several billion dollars.
The company has had the backing of many analysts and potential investors who are impatiently waiting for an initial public offering. They think the time is right because its profits have risen more than 7,000% in just one year and its revenue has grown tenfold, to 1.9 billion.
Candy Crush is the second “top-grossing” app on Apple’s App Store, and the company says its revenue keeps growing because many of its players spend large amounts of money buying extra lives or special boosters.
Of course, companies like this are not free from high risks, and it is impossible to value them over the long term. We cannot foresee whether users will get tired of lining up virtual fruit or pieces, whether they will stay interested in these games, or whether another similar game could appear tomorrow and end up dethroning these European companies that have, at times, captured enormous revenues worldwide.
Nothing prevents King Digital Entertainment from going through a situation similar to, or worse than, the one suffered by Zynga and the steep fall in its share price.
For my part, I think that, as with so many other companies, going public is only a way for the early investors to strike gold at the expense of the IPO.
Whatever valuation or short-term run this company may have, I personally would not invest a single euro in this kind of company except purely to speculate. Of course, that is just my personal opinion.
The IPO will be underwritten by JPMorgan Chase, Credit Suisse and Bank of America Merrill Lynch.
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Featured image: Susanne Nilsson, CC BY-SA 2.0, via Wikimedia Commons.
