King Digital Entertainment PLC (NYSE:KING)’s not so impressive debut on the NYSE with a decline of 16% was severely criticized by the British press, says a report from the Wall Street Journal by Amir Mizroch. Owing to a dismal stock opening that pulled down other tech shares, the press raised concerns that a new tech bubble is about to burst.
King failed to woo investors with promises
Morning business free-sheet City A.M., a business newspaper, ran a front page headline “King Crushed,” and called the debut as “dismal.” The paper’s Oliver Smith wrote that the British game developer, which is the maker of the popular title Candy Crush Saga, “was bloodied yesterday” on its debut, with “nearly $1bn (600m pounds) wiped off its market valuation,”
Quoting Sterne Agee analyst Arvind Bhatia, the article said that investors have not warmed to the promise from King of coming out with more hit games like Candy Crush. Bhatia also said that the decline in shares on debut reflects that investors are also considering fundamentals.
In the same paper, commentator Marc Sidwell said “nothing suggests the triumph of image over substance like sending giant, candy-colored cartoon figures to stand behind your executives for a NYSE debut. Investors refused to be charmed.”
Costumes on NYSE floor mocked
James MacKintosh of Financial Times wrote that one (King) should not expect a welcome if one fills the New York Stock Exchange floor with people dressed as large pieces of fruit. “King Digital, maker of Candy Crush Saga, was itself crushed.”
Referring the IPO as “inauspicious,” the Times said that the decline has also impacted the hopes of a tech boom. The Times’ technology editor Nic Fides wrote that NYSE traders were “bemused at the actors dressed as a cartoon carrot and a purple lolly.”
The Daily Telegraph, ran a story on the debut, with a headline “King finds debut rather crushing.”
King Digital Entertainment PLC (NYSE:KING) has a large presence in the UK with an administrative and game development studio in London. The move from the game maker to list on NYSE instead of London Stock Exchange (LSE) is viewed by many as evidence that the local stock market is for big players while other believe that the decision also reflects that the local sentiments towards the tech stocks are still not mature.
At the end of its first trading day, King Digital Entertainment PLC (NYSE:KING) shares were down $3.50 at $19.