As Candy Crush Saga makes its way to Wall Street there are a few things we can learn from this IPO (Initial Public Offering). First of all, should you invest in an IPO company? The answer is no. Matson Money chooses to stay away from stocks when they first go through their IPO due to extreme volatility and many bad endings. Warren Buffett agrees as we see from this quote.
“Buffett… told Berkshire Hathaway shareholders that initial public offerings are almost always bad investments. He says there is so much hype involved that IPOs won’t be the most-attractive value.”
Here is more information on this IPO and more reasoning as to why you should stay away from IPO’s until they stabilize in the market.
“”Candy Crush Saga” fans know that it’s not always easy to find the right match, but that’s not stopping its developer King Digital Entertainment from hoping that it’s the right match for investors.
The mobile game-maker’s IPO finally hits the market Wednesday, and it’s easy to see why there isn’t a lot of consensus as to where King’s stock will go after its Wall Street debut.
Bears can point to Zynga (ZNGA), the game giant behind “FarmVille,” “Words with Friends” and “Draw Something” that went public with a market cap of $8.9 billion three years ago. It fell out of favor once its hottest games began fading in popularity, leaving Zynga with cascading revenue and bookings as its new releases failed to captivate players.
If Zynga stumbled with so many hit franchises, what can investors expect out of King, which is really riding on the success of a single game that wasn’t even around two years ago?”
“Buffett: IPOs Are Almost Always Bad Investments.” CBSNews. CBS Interactive, 7 May 2012. Web. 25 Mar. 2014. .
Munarriz, Rick A. “Watch Out, Investors: ‘Candy Crush’ IPO May Rot Your Teeth.” DailyFinance.com. AOL, 25 Mar. 2014. Web. 25 Mar. 2014. .