After a disappointing earnings report, King Digital, the parent company of Candy Crush, is getting destroyed this morning.
The stock is down ~25% this morning. King reported lighter than expected revenue, and lowered its outlook for the year. It also reported a sequential drop in users.
At the same time, it announced plans for a $US150 million dividend to shareholders. This is pretty unusual for a company that just went public in May. King has plenty of money in the bank so it can afford it.
But, the dividend, which is normally supposed to make investors happy seems to have had the opposite impact. It’s like King is waving the white flag and saying, “We don’t have good ideas for a new game, so we’re just going to return a little money to shareholders.”
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