King Digital Entertainment (KING), the maker of Candy Crush began trading today on the New York Stock Exchange. King priced its initial public offering in the middle of its expected price range at $22.50 yesterday after the close of trading. The company says it sold 22.2 million shares that will give it a market value of about $7 billion.
In the associated video, Yahoo Finance Editor-in-Chief Aaron Task spoke with Lauren Lyster about the hot IPO market. In terms of filings and capital raised, the first quarter of 2014 has been the best for IPOs since 2011. Average deal sizes are 24% higher than last year. There are 47% more deals than this time last year. And 82% more money has been raised than last year at this time.
Task said there are definitely crazy valuations out there. What’s more, he said that 70% of the companies that have gone public in the last six months haven’t made a profit. While that’s a concern, he said that King is a profitable company. “At $22.50, they’re trading at less than 13 times P/E,” Task said. “So, it’s hard to say this is a crazy, ridiculous valuation.”
Task adds that the future will be important for King. “If they are able to come up with another game or two that can generate revenue, and if Candy Crush can maintain its current levels, this is an attractively valued stock.”
“I don’t think they’re another Zynga,” he said.
In other video game news, there is some backlash over Facebook’s (FB) purchase of Oculus VR. The maker of the popular game Minecraft said he is scrapping a deal to bring the game to the virtual reality headset, the Oculus Rift. Markus Persson tweeted that he cancelled the deal because, “Facebook creeps me out.”
Yahoo Finance's Task said Facebook is looked at as a double-edged sword in the start-up technology community. He said the company has had a lot of issues with privacy and what they do with users’ information, but they also have “deep pockets" making it attractive to some start-ups.
In our poll today, we want to know if you share Persson's feeling that Facebook “creeps” him out. Does it creep you out? Cast your vote and post your comments below as well.