NEW YORK (TheStreet) -- Investors didn't want any IPO candy Wednesday.
Shares of King Digital (KING), maker of the game Candy Crush, plummeted more than 11% by 11 a.m. and 15.6% at close on the first day of trading. The shares ended the day Wednesday at $19.
Cashtaggers on StockTwits.com worried that the firm, which has one blockbuster game, didn't warrant the $7 billion valuation implied by its $22.50 initial share price.
(KING) there have been a couple IPOs last week that were good future companies. This is not 1. Whoever is doing the valuing, not serving Company-- Terry Sutton (@Terry67) Mar. 26 at 11:02 AM
With 22.2 million shares released at $22.50, Candy Crush was valued higher than game-maker Take-Two Interactive (TTWO) and about 20% less than game giant EA Games (EA). King raised about $500 million in the offering.
The IPO was hotly anticipated by many investors. King's Candy Crush Saga was the top downloaded app in 2013. The game is free to start but charges players for extra lives.
King brought in $632 Million in revenues, largely from Candy Crush, last year, according to an SEC filing. The company had a 44% profit margin and 324 million monthly users as of the end of last year.
Some cashtaggers said profits alone made King worth the money. The company grew from a $1 million loss at the beginning of 2012 to a $159 million profit in the fourth quarter of 2013. Other highly valued companies, such as Twitter (TWTR) with its $26.18 billion market cap, are not yet profitable on an annual basis.
(KING) makes money and Wall Street and media hate it, of course they do. PE 4.5 EPS 4.38-- BigDaddytrader (@BigDaddytrader) Mar. 26 at 11:03 AM
But many cashtaggers argued Wednesday that neither King nor other recent IPOs warranted the hype. They said investors are weary of IPO insanity. Renaissance Capital says 2014 is on track to have more IPOs than in more than a decade.
(KING) this ipo stupidity has to stop... it's just for the insiders to make fortunes... slam it down, and the game will stop-- c (@roadkingtrdr) Mar. 26 at 11:06 AM
(KING) tech bubble in the making, inflated valuations are rampant.... it's not an if, it's a when... it will all fall down-- Ian (@theMarlin) Mar. 26 at 11:22 AM
At the time of publication, the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.