The Dublin-based firm priced its IPO at $22.50 a share after market close on Tuesday, although the shares opened significantly lower at $20.50 shortly before 10 a.m. EDT on Wednesday.
King Digital's shares traded below their opening price all day, at one point slipping to a low of $18.90. The stock closed at $19.03, 15.42% below the offering price.
The closely-watched offering came in a busy week for IPOs, with Aerohive Networks and CBS Outdoor Americas also on deck to take the public plunge. Despite plenty of buzz surrounding the King Digital IPO, however, the company's ability to repeat the phenomenal success of Candy Crush Saga has been questioned.
King Digital's primary revenue driver is the sale of "virtual items" to users, such as extra lives, skill-enhancing boosters and the ability to unlock additional content. Between the first quarter of 2012 and the fourth-quarter of 2013, King Digital's revenue grew from $22 million to $602 million, according to a recent F-1 filing with the Securities and Exchange Commission.
Over the same period, its gross bookings climbed from $29 million to $632 million. King Digital defines gross bookings as the amount paid by gamers for virtual items and access to "skill tournaments." The number also includes payments for advertising space. During the fourth-quarter of 2013, 73% of the company's gross bookings came from its mobile audience.
Candy Crush Saga tops the monthly active user leaderboard for Facebook (FB) apps, according to app analytics specialist AppData. The company's Farm Heroes Saga and Pet Rescue Saga hold second and third place, respectively, with Google's (GOOG) YouTube in fourth position. King Digital is the top Facebook app developer by monthly average user, ahead of Zynga (ZNGA), Microsoft (MSFT), and YouTube, AppData said.
Following the disappointing debut in King Digital, Zynga shares fell in sympathy, losing 4.13% to finish at $4.64.
--Written by James Rogers in New York.
>Contact by Email.