King Digital Entertainment officially began life as a publicly traded company on Wednesday, but plunged below its initial pricing levels on the New York Stock Exchange, after weeks of breathless publicity.
On Tuesday, the maker of the addictive mobile game "Candy Crush" priced its shares at $22.50 after the U.S. markets closed. The gaming company, listed as "KING" on the Big Board, issued 22.2 million shares, giving the initial public offering (IPO) an initial value of just under $500 million.
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Yet just hours after pricing, investors appeared to lose their sweet tooth. The game maker, which first rose to prominence as a Facebook application, saw its stock open on the NYSE at $20.50—but quickly swan-dived by nearly 16 percent as buzz over the hotly awaited IPO began to fade. In heavy trading volume, the stock tumbled as low as $19 per share.
Ricardo Zacconi, King's co-founder and CEO, put the best face on the stock's damp debut. He told CNBC's "Squawk on the Street" the IPO was "the start of a marathon, and I think the opportunity is great." The growing emphasis on mobile technology gives his company an edge, he said: "I'm very excited."
Others, however, were far less impressed.
"It's a Stephen King horror story," quipped CNBC's Jim Cramer, referencing the master of the horror genre and some of his most famous books. "It might be 'Misery,' it could be even 'Cujo.' "
One of a flood of IPOs that have come to market since the start of 2014, King's offering was helped by the runaway success of its "Candy Crush" game, which accounted for nearly 80 percent of the company's revenues in the fourth quarter of 2013. The fizzled IPO made King the year's worst performing initial offering, and one of only 13 with a negative debut.
The stock's bloody debut suggested the bloom might be coming off the digital gaming rose: King competitor Zynga—which makes the "Farmville" digital game—saw its shares tumble four percent in sympathy. Since its IPO in 2011, Zynga's shares has plunged by more than half.
"Obviously this is the kind of thing where people got scared off," Cramer added.
With 97 million players every day, "Candy Crush" was a top three game last year on the iPhone app. In his CNBC interview, Zacconi said the company was looking to be known for more than just the application on which it bases its popularity.
"What we want to achieve is not to find another Candy Crush. That's not what we are here for," the CEO said. "What we are here for is to build a portfolio of games. We want to build a network of players, of loyal players, who play our portfolio of games."
—By CNBC's Javier E. David. Drew Sandholm contributed to this story.