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King Digital Entertainment in Worse Shape Than Earnings Suggest

Cash at King Digital rose more than four-fold to $832 million, allowing the company to pay a special dividend of $150 million. Some bargain-hunting investors on Wall Street think King Digital will be able to move beyond Candy Crush and turn itself around. However, trends are presently worsening.

Analysts, who have pumped King Digital since its IPO, are also just beginning to cut their estimates. TheStreet was decidedly skeptical of the sell-side’s bullishness on King Digital when analysts began initiating coverage in May.

Bottom Line: At a market capitalization of about $4.5 billion, King Digital remains a risky bet in spite of its significant profits, cash generation and dividend payments.

Read More: Analysts Still Courting King Digital After Candy Crush Peaks

Read More: Is King Digital's IPO Too Good to Be True 

-- Written by Antoine Gara in New York

Follow @AntoineGara

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