The maker of popular smartphone game “Candy Crush Saga” played it safe in pricing its IPO Wednesday amid growing concerns that too sweet of an offering could make investors sick.
King Digital Entertainment, the Dublin-based maker of “Candy Crush,” said it plans to sell 22.2 million shares priced at between $21 and $24 a share in its initial public offering.
That range values King Digital at up to $7.6 billion — slightly below the $9 billion valuation mobile gaming company Zynga sought when it went public in 2011.
Since announcing its IPO plans last month, King has been unable to shake comparisons to Zynga, which has watched its shares tumble close to 50 percent since going public — leaving its valuation at $4.7 billion.
King’s conservative valuation suggests the company and its bankers are worried about turning the stomachs of already wary investors.
“Candy Crush” was the most downloaded free app on Apple’s iTunes store last year. But Zynga’s “FarmVille” was all the rage at the time of its IPO.
Meanwhile, King said revenues in the fourth quarter dropped to $601.7 million from $621.1 million the previous quarter, which has some watchers worried that the “Candy Crush” fad is already fading.
“Candy Crush” accounted for 78 percent of King’s fourth-quarter revenue.
“The games business is no different than the movie business. One great hit doesn’t ensure that the next movie will be a hit,” said Doug Kass, founder of investment shop Seabreeze Partners Management.