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Candy Crushed - IPO Drops 15%

Tyler Durden's picture




 

Having IPO'd at $22.50, King Digital Entertainment - the maker of Candy Crush - opened disappointingly this morning at $20.50 and is trading down tro $19.20!... just keep repeating the mantra that KING is not ZNGA and we are sure the levitation will resume. Of course, this would have nothing to do with the record-setting levels of earnings-less IPOs that are occurring.

 

(h/t @pdacosta)

Oops - trading down to $19.20...

 

oh, and of course, it's different this time...

 

Nope, no bubble here...

 

 

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Wed, 03/26/2014 - 09:59 | 4593442 Dr. Engali
Dr. Engali's picture

It's about $20.00 too high. Now if Twitter would just fall another $5.00 I would be a happy camper.

Wed, 03/26/2014 - 10:10 | 4593488 BaBaBouy
BaBaBouy's picture

Im Starting A New IPO, Hamburger And Candy Blender... Investors Will Go Nutts For THis !!!

Wed, 03/26/2014 - 11:24 | 4593878 Spitzer
Spitzer's picture

I'm starting a No Earnings ETF.

Wed, 03/26/2014 - 11:36 | 4593936 BaBaBouy
BaBaBouy's picture

Im Starting An All-Loser ETF.

Wed, 03/26/2014 - 12:37 | 4594205 Zerozen
Zerozen's picture

I'm going to buy the rights to all those websites with funny pics of cats and IPO that shit. Private island, here I come!

Wed, 03/26/2014 - 15:06 | 4594963 Boris Alatovkrap
Boris Alatovkrap's picture

Boris is maybe consider start of ETF for shallow deposit reclaimed copper.

Wed, 03/26/2014 - 10:40 | 4593637 Drachma
Drachma's picture

For some reason I read your comment as "...happy cramer." Is something wrong with me?

Wed, 03/26/2014 - 10:52 | 4593692 Dr. Engali
Dr. Engali's picture

There is something wrong with all of us.

Wed, 03/26/2014 - 09:56 | 4593446 Aknownymouse
Aknownymouse's picture

So it might get into its own bear market tday. Bullish!

Wed, 03/26/2014 - 09:56 | 4593448 order66
order66's picture

Slap Chop inevitable.

You're gonna love my nuts.

Wed, 03/26/2014 - 10:02 | 4593466 NoDebt
NoDebt's picture

I don't even know what that means and I gave you an up-vote.

Wed, 03/26/2014 - 10:08 | 4593481 NoDebt
NoDebt's picture

Got it.  My instincts were correct- your comment kicks ass.

Wed, 03/26/2014 - 10:19 | 4593518 1stepcloser
1stepcloser's picture

I have to confess, I watched the whole thing... he had me at "you're gonna love my nuts"  He should of played the wolf of wall street.

Wed, 03/26/2014 - 10:47 | 4593662 playnstocks
Wed, 03/26/2014 - 09:57 | 4593451 pods
pods's picture

Is their mascot a sock puppet?  
And no, I am not talking about Cramer.

pods 

Wed, 03/26/2014 - 11:02 | 4593750 0b1knob
0b1knob's picture

Mascot is a crushed velvet Muppet.

Wed, 03/26/2014 - 09:57 | 4593452 Dr. Richard Head
Dr. Richard Head's picture

Candy Crush IPO?!?!?!?!   Are you f'in kidding me?  All of this social media horse pucky and game distraction nonsense is just that - nonsense.  After dipping my toes into twitter, instagram, and facebook I became nauseated by the social masturbation of people on these platforms.  I deleted all of my accounts and convinced my wife to do the same.  The break room of our office is filled with people yet they all interact with their phone and not each other.  What a freaking weird world we live in.

Wed, 03/26/2014 - 10:01 | 4593462 PlusTic
PlusTic's picture

The next Ice Age will clean up this earth surface problem...

Wed, 03/26/2014 - 10:09 | 4593485 WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture

Wow, I thought Candy Crush was a porn star with big tits.

Wed, 03/26/2014 - 10:18 | 4593517 Cursive
Cursive's picture

@WhyDoesItHurt

Exactly.  I feel much better about myself knowing that I was clueless about who or what "candy crush" is/was.

Wed, 03/26/2014 - 10:49 | 4593669 camaro68ss
camaro68ss's picture

they dont give her the stage name candy "crush" for nothen.....

Wed, 03/26/2014 - 11:09 | 4593793 Agent P
Agent P's picture

You're thinking of the version that actually makes money. 

Wed, 03/26/2014 - 10:25 | 4593546 intotheblack
intotheblack's picture

I find your lack of faith disturbning. Wish chart man would show you how social media penetration and the rise of the Potemkin economy because Fed and Treasury policy correlate in a glorious arc of complete and utter despair.

Wed, 03/26/2014 - 09:59 | 4593456 Aknownymouse
Aknownymouse's picture

OT. Watching Bama along with the EU clows on the podium, I feel like throwing up. Combined they all have less balls than one player on the Canadian hockey women team.

Wed, 03/26/2014 - 10:03 | 4593467 youngman
youngman's picture

A 7 billion dollar game company....yeah right..this is the new America.....boy are we going to have a great century....I really feel sorry for a kid being born now....not much future here...unless you can IPO....

Wed, 03/26/2014 - 10:16 | 4593508 astoriajoe
astoriajoe's picture

Human IPOs, I'm sure its coming too. It makes slavery sound palatable.

Wed, 03/26/2014 - 10:30 | 4593581 you can't fix stupid
you can't fix stupid's picture

Already happening..

"Invest in Stock Linked to the Income of a Pro Athlete Brand"

fantex.com

Wed, 03/26/2014 - 10:03 | 4593471 Debt Slave
Debt Slave's picture

This is the new America. Prosperity through production and thrift is so old 20th century. In the New Era, we will prosper through entertainment, diversity, and debt finance!

$17 trillion in debt and counting... DOWN.

Wed, 03/26/2014 - 10:04 | 4593475 Cacete de Ouro
Cacete de Ouro's picture

Burger King is up...

There can be only one winner in "The Battle of the Kings'

Wed, 03/26/2014 - 10:10 | 4593487 Cacete de Ouro
Cacete de Ouro's picture

Who's lead managing this POS?

Answer: JP Morgan, BofA Merrill Lynch and Credit Suisse

They really need to get their price stabilization operation underway in the next hour. This King Thing is not getting traction

Wed, 03/26/2014 - 10:33 | 4593602 disabledvet
disabledvet's picture

"they're managing the exit."

without a parachute apparently.

Wed, 03/26/2014 - 10:12 | 4593493 Rising Sun
Rising Sun's picture

The IPO dogshit train rolls forward!!!!!

 

WE NEED MOAR FUCKING SHIT TO IPO!!!!!!

Wed, 03/26/2014 - 10:59 | 4593732 SheepDog-One
SheepDog-One's picture

Next multi-billion$ IPO- Bags of dogshit.com.

I can't fucking believe we're going thru this shit again, this time way dumber than the last 'eyeballs' .com bubble.

Wed, 03/26/2014 - 10:15 | 4593505 roadhazard
roadhazard's picture

This IPO is the most stupid thing since yesterday.

Wed, 03/26/2014 - 10:17 | 4593509 Agent P
Agent P's picture

My idea of the road show:

Q: What's your business model?

A: Well, we invented a wildly popular game for mobile devices.

Q: Do these games have long-term staying power for predictable revenue and profit generation?

A: No, they're very trendy and are usually replaced by the next hot game after a year or so.  However, the games are rarely deleted from the user's third page of apps on their device, so we continue to include them in our user count and consider them to be potential future revenue sources.

Q: And how much do you charge for this game?

A: It's free.

Wed, 03/26/2014 - 10:28 | 4593570 Dr. Engali
Dr. Engali's picture

+1 Lol. Can you believe we are going through this again?

Wed, 03/26/2014 - 10:36 | 4593618 NoDebt
NoDebt's picture

And they'll still cry "nobody could have seen this coming!"

Wed, 03/26/2014 - 11:13 | 4593811 Dr. Engali
Dr. Engali's picture

True dat!

Wed, 03/26/2014 - 10:36 | 4593625 disabledvet
disabledvet's picture

can you believe they call it winning?

bwhahahahaha. I would imagine the people whose trillions they are losing right now might be getting a might p/o'ed at this point.

Wed, 03/26/2014 - 12:11 | 4594105 sdmodiano
sdmodiano's picture

Dear Agent P,

 

Q: Do you know anything about the current game business?

A: Obviously not.

Q: How long has the Angry Birds franchise been a strong presence in the mobile gaming space?

A: For over 4 years.  Cut the Rope and others have a similar narrative.

Q: How much revenue does this free game generate?

A: Last year King reported revenue of $1.9 billion. Candy Crush was certainly the bulk of that revenue.

Q: The fact that an app has not been deleted from your device has no bearing on its measured success in the market.  This is based on daily activity and use of the game. So here is the question, when you see a hole in the ground, do you have the urge to wipe it?

A: exercise left to the reader...

 

BTW, I think King is not a good buy. I find it a bit incestuous in here when it comes to bashing the emerging businesses and innovations.  There was so much glee about Faceplant and its IPO performance.  That thread has gone stone dead.  It turns out that FB is a friggin juggernaut of humanity and is figuring out how to monetize.  Of course, that is not convenient to acknowledge in here, so the herd runs over to punch the next Bozo Bag it can find.  I think this site is one of the more intellectually stimulating sites on the web, but it gets tone deaf at times.

Wed, 03/26/2014 - 12:44 | 4594240 Zerozen
Zerozen's picture

You lost me at "juggernaut of humanity"...

Facebook isn't monetizing so much as buying up lots of often questionable businesses with the billions it pilfered in its IPO.

Wed, 03/26/2014 - 13:23 | 4594406 sdmodiano
sdmodiano's picture

1.23 billion active users per month, and growing.  That is 17% of the people on the planet.  If I lost you, then you lost reality.

It made $1.5 billion in profit last year, so it is not merely betting the cash it raised on acquisitions and praying.  For the record, $1.5B qualifies for monetizing in my book.

The quality of its purchases is an open question at this point.  I am skeptical though, especially about the value.

My apologies for engaging in a fact based discussion.  It is far easier to simply spew opinion vapor.

Thu, 03/27/2014 - 09:46 | 4597401 Agent P
Agent P's picture

Wow, a whole four years?  That's almost long enough to start putting out 5yr CAGR numbers!  

Rovio did a good job of monetizing Angry Birds by licensing the shit out of the brand while it had the hot hand.  I give them credit for that.  But gaming (especially free mobile gaming) is a trendy faddish business, which is a dangerous thing for equity investments. Candy Crush is the new Angry Birds, and in a few months, something else will be the new Candy Crush, and the $1.9 Billion in revenue you tout will go poof...just like the stock.

Thu, 03/27/2014 - 10:30 | 4598358 sdmodiano
sdmodiano's picture

The games biz is a hit driven business.  This is why we agree that King is not a good buy.  Having said that, the smartphone game biz has been around about as long as Angry Birds.  The same is true for Cut the Rope.  So in truth, AB has been a dominant franchise for nearly the entire history of the mass audience era of the smartphone game.  Shrugging off the tenure as only 4 years foolishly ignores this fact.  You also completely ignore the revenue generated by these products.  They make a LOT of money.  

Candy Crush has already demonstrated staying power, so it will probably not go POOF in months. I will qualify that with this fact.  CC doubled the cost of buying extra moves to beat a level.  This was done in near perfect sync with the IPO timing.  This naked greed will not go unnoticed, or unpunished.  Based on other titles with a similar trajectory it looks like CC is beginning a long downward slide.  It has a lot of mass now, so it will take some time to shed it back into the middle of the pack.

We agree about King, but I objected to your simplistic free faddy game argument.  Most of the comments in here made the same error. The game business makes a LOT of money for a very small percentage of players.  That makes it risky, not the free to play model, or the faddish fallacy espoused by those that are not paying attention to detail.

Fri, 03/28/2014 - 12:16 | 4602767 Agent P
Agent P's picture

How many mobile games are out there?  How many are hits?  This is a flooded market with ZERO barriers to entry and ZERO switching costs to users.  That is a disastrous recipe for an equity investment.  Wall Street knows this and so do these companies bringing multi-billion dollar IPOs to cash out before it's too late.  It's the greater fool stupidity of the late 90s all over again.  This is the reason I mock it.  Sorry if that's too simplistic a view for you. 

Wed, 03/26/2014 - 10:16 | 4593512 ipud
ipud's picture

Candy crash

Wed, 03/26/2014 - 10:19 | 4593519 Spastica Rex
Spastica Rex's picture

I bet King Digital Entertainment has some swank office stuff that'll get get auctioned off during liquidation.

Wed, 03/26/2014 - 10:24 | 4593542 Kilgore Trout
Kilgore Trout's picture

Ping-Pong tables and nerf weaponry.

Wed, 03/26/2014 - 11:01 | 4593743 0b1knob
0b1knob's picture

Nothing compared to the San Onofre Edison auction.

http://www.mriauctions.com/auction-nuclear-generating-station/

The deals are so hot you could say they are .... RADIOACTIVE!

Wed, 03/26/2014 - 10:19 | 4593521 Fix It Again Timmy
Fix It Again Timmy's picture

This is an epic sign, a 500 lb. canary in the coal mine - that all is not well!...

Wed, 03/26/2014 - 10:25 | 4593525 RevRex
RevRex's picture

Candy Crush? Is she a porn star??????? I'm one ignorant son of a bitch I guess...

 

 

Oh I see, mindless entertainment for idiots who own "smart" phones..... what kind of moron buys stocks like that?

 

So how many shares did you buy, Fonestar????

Wed, 03/26/2014 - 10:23 | 4593532 Agent P
Agent P's picture

Large colorful fruit/candy mascots running around on the floor of the stock exchange doesn't exactly instill confidence in our financial system, does it? 

Wed, 03/26/2014 - 10:30 | 4593586 Dr. Engali
Dr. Engali's picture

The whole world has become a surreal joke.

Wed, 03/26/2014 - 10:36 | 4593624 Spastica Rex
Wed, 03/26/2014 - 10:45 | 4593626 pods
pods's picture

Better than some kids shows though. One character I swear was a French Tickler.

pods

Wed, 03/26/2014 - 10:31 | 4593596 kw2012
kw2012's picture

It's different this time.

Wed, 03/26/2014 - 10:38 | 4593633 disabledvet
disabledvet's picture

actually it's worse.

Wed, 03/26/2014 - 10:34 | 4593609 Scoobywan
Scoobywan's picture

Lady at work plays this crap all the time on her Lenovo whatever tablet.

How fun it must be to click on colored shapes....over and over and over..

Read a fucking book or something.

Wed, 03/26/2014 - 10:35 | 4593613 Itchy and Scratchy
Itchy and Scratchy's picture

Candy Crash!

Wed, 03/26/2014 - 10:54 | 4593628 Palladin
Palladin's picture

 

 

I think the concept is stupid, but has anybody bothered to look at the financials of this IPO?

Here's the link:

http://www.sec.gov/Archives/edgar/data/1580732/000119312514056089/d56443...

Scroll down to page 10, and last year's revenue was $1.8 billion, with a "B" and the net profit was $567 million. It's about a 10 fold increase from the prior year.

Just sayin.

 

Wed, 03/26/2014 - 11:06 | 4593769 ThroxxOfVron
ThroxxOfVron's picture

Ever heard of 'Enron Accounting'?

Sure they made a profit of $567Million.

That's why they are in a huge fucking hurry to cut YOU in on their cash cow and make YOU as rich as them out of the goodness of their candy-coated hearts...

Wed, 03/26/2014 - 12:49 | 4594263 Zerozen
Zerozen's picture

Makes me wonder, If they're doing that well then what do they need the public's money for?

Wed, 03/26/2014 - 10:45 | 4593649 Billy Sol Estes
Billy Sol Estes's picture

Just in time for the opening of the new Muppets Most Wanted movie.

You can only have the washed up un-funny cast of SNL in your movies so many times.

Much like these IPO's, King Digital Entertainment is, wait for it, Muppets Most Wanted!!!

 

I'll show myself the door...

Wed, 03/26/2014 - 10:44 | 4593652 Ghostdog
Ghostdog's picture

The fact that this inane game is actually even considered for an IPO tells so much about our society.

Wed, 03/26/2014 - 10:52 | 4593688 SheepDog-One
SheepDog-One's picture

Used to be an IPO would be a new technology or manufacturing or life saving drug.....now multi-billion$ IPO's are 'Beanie Baby' nonsense. Then when it all implodes and everyone loses, they all say they've sure learned their lesson, but yet jump right on the next ridiculous even dumber nonsense with all their money. There's something very wrong with the human species, it's clearly de-volving....'Idiocracy'

Wed, 03/26/2014 - 10:47 | 4593664 SheepDog-One
SheepDog-One's picture

Gee I certainly hope this won't churn out moar bankster suicides.

sark>off

Wed, 03/26/2014 - 10:49 | 4593673 FJ
FJ's picture

Got a crush on these IPO. In two weeks it will double or triple like Twitter.

Wed, 03/26/2014 - 11:09 | 4593789 buzzsaw99
buzzsaw99's picture

Well at least candy crush is a productive enterprise as are all the dot scam stocks. [/SARCASM]

Wed, 03/26/2014 - 11:10 | 4593798 starman
starman's picture

Great I gotta go see my psychologist again!

Wed, 03/26/2014 - 11:19 | 4593845 gmckae
gmckae's picture

When the Hot IPO cracks, all indications for fliippers are cancelled and IPO's are re-evaluated at Syndicate Desks.  We now have the signal of an impending correction in the stock market

 

Wed, 03/26/2014 - 11:30 | 4593902 El Vaquero
El Vaquero's picture

But it's not just called Candy Crush, it's called Candy Crush Saga.  You see that, it's a fucking saga!

 

 

It looks like a simple enough game too. In fact, too simple for a multi billion dollar company, even with all of the BS marketing that goes with it.

 

So, what is the story behind swapping digital candies around on little boxes on a screen?  Because, you know, saga implies some sort of fucking story. 

Wed, 03/26/2014 - 11:36 | 4593934 Hobbleknee
Hobbleknee's picture

fake economy is fake

Wed, 03/26/2014 - 12:10 | 4594102 Rockfish
Rockfish's picture

And here i thought today was going to be void of good news. ;)

ASS wipes you get just what you deserve. 

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