Candy Crush King plans IPO valuing it at $7.6 BEEELLION European mobile gaming firm King has updated its plans for an initial public offering in the US, telling the Securities and Exchange Commission that it wants to sell its shares for between $21 and $24 each, valuing itself at around $7.6bn. The Candy Crush Saga-maker is hoping to sell 22.2 million stocks and raise around $533m …
I think a new dot-com crash is coming...
Ohh! And here I was thinking "THE FUNDAMENTALS ARE STRONK!"
No, wait...
Addicted to Asset Bubbles: Helicopter Ben Runs Out of Ideas for Creating Money -- January 15, 2013
Ben Bernanke confided on January 14 that he is unaware of any new method of stimulating economic growth. Bernanke said: “As far as I’m aware, there’s no completely new method that we haven’t [already tapped].” So Helicopter Ben has run out of innovative and unconventional ways to create new money. Lest you be tempted to breathe a bit easier, however, rest assured that the now conventional method of quantitative easing, involving the Fed’s monthly purchase of $85 billion worth of mortgage-backed and U.S. government securities, seems to be working just fine according to Bernanke and he foresees its continuation. Noting the stubbornly high unemployment rate combined with the low inflation rate in the U.S. economy, Bernanke stated, “That is the case for being aggressive, which we are trying to do.” Although he is “cautiously optimistic,” he does promise to closely monitor the risks, efficacy, costs, and benefits of this inflationary policy.
I guess the rapid asset price run-up in stock and commodities markets, which are nearly back to financial bubble levels, and booming farmland prices do not count in Bernanke’s benefit-cost calculus. More likely, Bernanke accounts them as a benefit, which, via the “wealth effect,” will induce another debt-driven consumption spree on the part of the American public that will stimulate economic growth, i.e., create another bubble economy.
"I think your bang on there, some stupid mugs are going to be left holding worthless bits of paper in 12 months."
Probably the same mugs who are already holding a bunch of worthless Zynga stock. Some people will never learn.
Having had a smash hit in the volatile mobile games market does not qualify you as a sound investment. Past experience indicates success isn't repeatable. Even if King somehow have found the magic formula to creating a stable business out of mobile games, wouldn't you want to see them demonstrate that before the IPO?
Facebook and Twitter were massively overvalued, but at least they provided a faint glimmer of a massive user base that might be able to be turned into paying customers at some point in the future. King will be close to extracting all possible revenue from their customers already.
Or does King have some way of enslaving their players and making them do whatever they want? Cue evil laugh and plans for world domination.
What on earth are you talking about? Are Sony and MS close to extracting all the money from their customers on consoles? Are EA close to extracting all the revenue from people who want to play football games?
People play new games when they get bored of old ones, they don't give up on games. King could develop 1000 new games from their profits from a single year, they don't need to always have THE biggest game to stay profitable - they just need to have multiple popular games.
>the firm made $567.6m last year on revenue of $1.88bn
>Are Sony and MS close to extracting all the money from their customers on consoles?
Wrong model here.
Candy Crush is a hit, sure. Will their NEXT game be a hit? That is the question.
Regular games companies, like our "beloved" EA have oodles of games to milk. Many are flops, but the occasional hits are intended to make that up. In addition, with complex games you can always revisit NHL 2014, Call of Duty VIII and other not-very-inventive re-warmed stalwarts that will sell.
Can you do resell the V2 of a simple game? In an apps context where users expect to have free updates? You can, but my guess it'd better be a massive improvement.
The model that wannabee _stockholders_* should look at are established game companies or movie studios** that have an arms length, mostly financial, relationship with the companies creating the actual product.
Not buying potentially one-two-hit wonders like Zynga or King. Or at least not at those valuations.
8B$ indeed.
* Wannabee emitters of IPOs on the other hand will see nothing wrong whatsoever with your assessment.
**It's taken the EAs, Sonys and Lions Gate of this world decades to fine-tune that type of risk management and they still mess it up on occasion.
Neither F***book, nor Tw*tter have a successful addiction model. I have no idea which slime has come up with the idea of "micropayment to skip a mandatory wait between games", but that is real moneyspinner. I was watching someone playing it (rather cluelessly too). They were a mark for the taking. I suspect that King has patented every single means of implementing this.
All he needs now is to come up with one or more games every few years that fit into this monetisation model. If he does he will continue staying at ~ 50%+ margin (where he is now) and multimillion revenues.
"$567.6m last year on revenue of $1.88bn"
wtf have they managed to spend $1.2 billion on?
Only thing I can think of is the Tv advertising (was quite shocked to hear the Candy Crush music coming out of my TV). Maybe they developed CC originally as a AAAA FPS, on a console they designed themself, made entirely on quantums - before they ported it back to iOS...
Presumably they paid some tax.
They might have paid their top bods massive salaries.
Have they bought any other companies?
Then they had to pay all their developers and regular employees. If they've any sense they will be developing LOTS of new games in the hope a couple hit it big
Maybe they commissioned a fancy new headquarters somewhere expensive?
Just make a game that would get the average IT student a B+. Add levels that are impossible to complete, then add some bonusses that you have to pay for to complete the level, so that you don't feel like a complete loser and there you have it.... : payed addiction..
The masses would probably be better off buying real drugs.. Its cheaper, and probably less addictive.
My wife has been playing Candy Crush for months and hasn't given them a penny or bugged the hell out of her FB friends.
She is determined to get as far as she can without paying, and if forced will ditch it.
All their games are just a variation on a theme. Remember Rovio who did exactly the same thing not long ago ..... and nobody talks about angry Birds any more!
Another dot com flash in the pan that will end in tears.
"... determined to get as far as she can without paying"!?
Methinks this is a huuuuuuge, untapped market there folks! Let's set up a revolutionary business, total like, free model like. And since it's got this huuuuuge potential, we should value this idea at around... let's say, 150 billion. Nah, scrap that, make it a round figure, say, 1 trillion some something. O Come, All Ye Faithful Investors, huuuuge rewards ahoy!!!
for now, that is. And this is the sad part. Politicians are washing their hands off responsibility and - de facto - forcing privatization of our retirement funds that pump "free" money into stock market (be responsible citizen, save up for your retirement). As long as you cash in before crash (retire or or have access to insider info) you'll be good. For majority of us this may not be fun. This really makes me resent contributing to the plan (despite the company matching my part) - I really hate making WS sharks rich (and all plans benefit the most the middle man).
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