NOTHING suggests the triumph of image over substance like sending giant, candy-coloured cartoon figures to stand behind your executives for a New York Stock Exchange debut.
Investors refused to be charmed by King Digital’s big-eyed mascots, and instead sent their spirits plummeting as soon as chief exec Riccardo Zacconi declared the US market open. The game-maker’s shares fell by 15.6 per cent in its first day of trading.
It’s tough, but it might well be fair. King is a firm overwhelmingly dependent on one hit game – Candy Crush Saga accounted for more than three quarters of the firm’s revenue in the last quarter of 2013. Pet Rescue Saga does show it is more than a one-hit wonder. That’s no mean feat in the turbulent app store popularity contest. But King’s claim that it knows how to become a reliable hit machine is still a lot of uncertainty to take on trust.
Zynga is the most notorious case of a gaming superstar that fell to earth. It went public in 2011 with a market cap of $7bn (£4.2bn). Today, now the Farmville fad has ran its course on Facebook, Zynga’s market cap is down to $4bn. That’s the not-so-cuddly monster yesterday’s sellers will have had lurking in their minds.