King Digital: A $7.6 Billion Company?

Yes, that's right. King Digital Entertainment PLC, the famed producers of the ridiculously popular Candy Crush game are seeking to raise $500 million  to $533 million with an IPO later this month. The company is planning on offering 22.2 million shares (with 6.7 million shares for top executives and pre-IPO investors) with a price range set from $21 to $24 per share.

What does this mean?

Let's take a moment to absorb that for a moment. The company that basically  revamped Bejeweled is valuing itself at a similar level as Electronic Arts Inc ($EA) which is trading at around $29.98 dollars per share and has made games such as Madden, FIFA, The Sims, Need for Speed,  and other classics. They also value themselves above Activision Blizzard Inc ($ATVI), the makers of the highly popular World of WarCraft, who are trading at around $20.60 per share. To me, King isn't similar to EA or Activision at all, they resemble Zynga ($ZNGA) who is currently trading at $5.80, or almost at 42% of its IPO price of $10. Both companies specialized in small, simple mobile games, Zynga with Farmville and King with Candy Crush whereas King has many more daily active users and more revenue with an average 144 million daily active users having played its mobile games more than 1.4 billion times a day in February. An interesting thing to note is that King is really focusing on mobile games as opposed to its rivals and currently has three games among the top five highest-grossing in terms of revenue in the U.S. according to AppAnnie, an app download tracking company.  Clearly, the company has great success in making mobile games, but will it able to sustain that level of success? Regardless, it will be a very interesting IPO and one that's definitely worth tracking. Look out starting around March 26th for $KING on Sprinklebit. Let us know your opinions in the comments and be sure to check our analysis when the IPO was first announced.