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Candy Crush brings IPO market back to earth

29
Mar
2014

By Nicola Leske NEW YORK (Reuters) – In the weeks leading up to the IPO of King Digital Entertainment, the companys bankers scrambled to persuade investors that the maker of popular online game Candy Crush Saga was more than a one-trick pony, according to a source familiar with the situation. On Tuesday, Facebook Inc said it would pay $2 billion for Oculus VR, a two-year-old virtual reality startup that has yet to put a product on the market. Facebook CEO Mark Zuckerberg described the deal as the social media giants desire to bet on the platforms of tomorrow. But for some investors, the deal brought back memories of the Internet boom and bust in 1998-2001, where profitability and other financial fundamentals of companies took the back seat to a raging fad about anything with a dotcom identity, according to the source. Bankers underwriting King Digitals offering had to call in favors with investors who had received large allocations in previous successful IPOs, the source said.

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