How many Candy Crush games can you churn out?
King Media Entertainment, German-based maker of wildly addictive and wildly popular Candy Crush game, submitted a confidential filing with the Securities and Exchange Commission (SEC). If that term sounds foreign, confidential filing is becoming the more well-liked option for small companies looking to list their stocks on the stock-exchange. Even if you’re not at all times into IPO, the recent Twitter IPO should still be fresh in the back of our heads.
With many Twitter investors dumping the shares after a fresh disappointing figures, I can’t understand what these people are thinking when they are attempting to apply for their IPO. A number of stock exchange analysts are already issuing strong notice and the tech bubble is getting too large that could burst anytime soon. Very much similar to the dot com bubble we saw in the nineties.
My simple advice for anybody who is considering jumping into the bandwagon is: 1. Think. 2. Think; and 3. Think again! Have you heard about Zynga? I think you almost certainly have not. But when asked about such games as Zynga Poker, I am sure the answer will be totally different.
Of all the IPOs that I am aware of, Zynga IPO is among the worst. Sure they were on the exponential growth trajectory when they chose to apply for IPO. The exact same story is what the Candy Crush makers are attempting to sell to you today. After reporting a $29M revenue in the first quarter of 2012, the figure shot up to $632 millions in the fourth quarter of 2013. By any account, that type of growth is incredible! That’s more than 2000percent growth in just over one year.
No one but the idiots will believe in such stories as this. If you think about any of it, what is the possibility that there’ll be another Candy Crush success? Remember Angry Birds? Following the highly successful games, did Rovio (maker of Angry Birds) find a way to create another hit? I’ve not seen one up to now. Have you?
Exponential revenue growth like this always seems tempting to anyone who is looking to grow their money in the stock market. But I would like to remind you that if you have invested a $15 in Zynga investment after they went IPO, it had been trading as little as $2.50 just recently. I’m not predicting that’ll be the same for King IPO. But for now, I do believe this is an IPO stock that is ‘too hot’ to touch!
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