Another day, another rough session for King, the parent company of Candy Crush.
The stock is down 3% this morning. Yesterday it was off 15%, making it the worst IPO debut of the year.
The stock was priced at $US22.50 for its IPO, and now it’s trading at $US18.45. That’s an 18% decline.
The reason the stock is falling is that investors are skittish about the long term viability of King.
It gets 78% of its revenue from Candy Crush Saga. Mobile games are fickle. Not have really proven to be a long term winner.
When King filed to go public, we saw that its revenue was already dropping on a sequential basis. There’s no reason to believe this is going to change.
The question we have after seeing the stock drop is, who bought the IPO in the first place? The company had warning signs galore. Whoever bought in is now underwater on the investment.