Thanks to the popularity of the blockbuster game "Candy Crush
Saga" across the globe, the maker of the game - King Digital
Entertainment - plans to go public by the end of this month. The
company will likely price its IPO between $21 and $24 per share. At
the high end of the price range, King is expected to raise $533
million and will be valued at $7.6 billion.
Candy Crush Maker in Focus
King's revenue jumped sharply to nearly $1.8 billion in 2013 from
$164 million in 2012 thanks to Candy Crush, which was the most
downloaded free app on iPhone and iPad in 2013 and has crushed
), Google (
) Maps and YouTube in popularity (read:
Facebook to Buy WhatsApp, 3 ETFs to Watch
King Digital is largely dependent on Candy Crush Saga for its
revenues with 78% of fourth quarter 2013 total revenue coming from
the game. Further, Candy Crush has 97 million in average daily
users as of February.
Other two games - Farm Heroes Saga and Pet Rescue Saga - are not as
popular as Candy Crush but still have respectively 20 million and
15 million in daily users. The dependence raises major concern on
the company's growth story, as it might be difficult for the maker
of Candy Crush to sustain the momentum for long.
This is especially true when we think of Zynga (
), which was once a profitable company due to its successful
"ville" series game. Now, the company is struggling to translate
this hit game to mobile devices and is incurring losses. Zynga is
performing poorly and is currently trading at 42% below its IPO
However, King will likely benefit from continued growth in the
mobile usage and mobile gaming. In addition, the booming U.S. IPO
market and the surging stock prices for many new listings would
provide a boost to this new comer. The shares of the newly debuted
digital coupon provider, Coupons.com (
), doubled in their first day of trading from its IPO price.
Further, Twitter's (
) successful IPO in November and rising FB shares have spread
optimism into the broad IPO space.
King Digital is expected to make its debut on the New York Stock
Exchange under the symbol 'KING' on March 26 following the final
offering on March 25 (read:
2 Rising ETFs With Double-Digit Yields
ETFs in Focus
With the hype created on the first public appearance of Candy
Crush, the following ETFs are seeing busy trading and will continue
to do so in the weeks ahead. Though the following ETFs have not yet
disclosed holding King's stock in their roster, any of these could
be worthwhile for investors seeking to take advantage of the
Global X Social Media Index ETF (
This ETF offers pure play in the global social media space by
tracking the Solactive Social Media Index. Holding 27 securities in
its basket, FB, Tencent Holdings (
) and Linkedin (
) occupy the top three positions in the basket with a combined 11%
all the Technology ETFs here
In terms of country exposure, U.S. firms take half of the
portfolio, closely followed by China and Japan with double-digit
exposure each. SOCL has so far amassed $165.7 million in its asset
base. The ETF charges 0.65% in fees and expenses and sees good
volumes of roughly 226,000 shares a day.
Similar to Facebook and
s, King Digital is expected to be included in SOCL holdings at the
close of the fifth trading session following the IPO. The ETF
currently has a Zacks ETF Rank of 2 or 'Buy' rating with a 'High'
First Trust US IPO Index Fund (
This ETF targets the U.S. IPO market and follows the IPOX-100 U.S.
Index. It has accumulated $519.1 million in AUM and charges 60 bps
in fees a year. Volume is good as it exchanges more than 143,000
shares in hand on average.
In total, the fund holds 100 securities in its basket with the
largest allocation going to Facebook, AbbVie (
) and General Motors (
) that collectively make up for about 26% share. The product has a
nice mix of sectors, with the top four being consumer
discretionary, information technology, energy and healthcare.
Since the ETF focuses on 100 largest and most liquid U.S. IPOs, new
companies can find entry into the fund's holding after trading for
a minimum of 100 days (read:
Can IPO ETFs Remain Hot in 2014?
Renaissance IPO ETF (
This new fund also provides exposure to the largest and most liquid
newly listed companies by tracking the Renaissance IPO Index. New
companies seek inclusion on a 'fast entry basis' on the fifth day
of trading. The fund holds 61 stocks and has attracted $25.4
million in AUM since its debut five months ago.
Currently, FB and Zoetis (
) are the top two firms making up for nearly 10% share each. From a
sector look, technology stocks make up for more than one-fourth
share while financials, oil & gas and healthcare take the next
three spots. The ETF trades in light volume of less than 44,000
shares, probably ensuring additional cost beyond the expense ratio
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